Medicaid Funding Cuts Loom as House Republicans Aim for $1.5T in Savings

House Republicans face the challenge of reducing federal spending by $1.5 trillion to offset tax cuts, with significant Medicaid cuts likely. Medicaid, covering over 70 million low-income individuals, is a key focus since Medicare cuts are off-limits. The Congressional Budget Office states that targeted savings of $880 billion over 10 years by the House Energy and Commerce Committee are unlikely without Medicaid reductions.

Republican leadership stresses protecting legally entitled Medicaid benefits while proposing to eliminate waste, fraud, and abuse, and consider Medicaid work requirements. Some GOP members suggest removing ineligible recipients could save $160 billion. However, experts warn that these savings targets cannot be met without reducing essential Medicaid services to vulnerable populations, including seniors and disabled individuals.

Another approach under consideration is transferring more Medicaid expansion costs to the 40 states that adopted it. States currently cover about 10% of expansion costs, with the federal government covering 90%. Reducing this federal match to traditional Medicaid levels could save $626 billion federally over a decade but risks elimination of coverage for over 20 million low-income adults if states cannot afford the full cost.

Concerns have been raised by Republican representatives from battleground districts about the impact on hospitals, nursing homes, and safety-net providers heavily reliant on Medicaid funding, especially in rural and underserved areas. They warn that cuts could jeopardize healthcare access by causing provider closures.

The House Energy and Commerce Committee is set to mark up its reconciliation package which includes these spending changes on May 7, making Medicaid's future funding a critical issue in the legislative process over the coming weeks.