Bill Clark/CQ Roll Call via AP Images
House Minority Leader Hakeem Jeffries (D-NY) leaves the stage after the House Democrats’ news conference on Medicaid and SNAP cuts proposed by the Republicans’ reconciliation process, May 6, 2025, at the Capitol in Washington.
Medicaid recipients with earnings at or above the federal poverty line would have to pay significant out-of-pocket expenses for their health care coverage, and work requirements would be placed on the program, according to a menu of items in the emerging Republican budget reconciliation proposal seen by the Prospect.
The Medicaid cuts, part of the giant tax and spending package Republicans are readying using the reconciliation process to avoid a Senate filibuster, would also roll back Biden-era rules that improved staffing at nursing homes. And they would alter a number of eligibility and enrollment provisions that would make Medicaid harder to navigate for its 71 million-plus enrollees, a common tactic to reduce enrollment.
“A lot of these policies will add administrative costs for the states, burdens for people, the potential for more improper payments and errors in processing,” said Allison Orris, director of Medicaid policy at the Center on Budget and Policy Priorities (CBPP). “All of this shifting of the ball can result in people losing coverage.”
Sources told the Prospect that the list of Medicaid cuts in the menu do not appear to reach the $880 billion over ten years required in budget reconciliation instructions for the House Energy and Commerce Committee. Even with proposed changes to the Affordable Care Act that could increase health care costs for millions of recipients, as well as unspecified cuts to the remnants of the traditional welfare program, known as Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant (SSBG), the total estimate of savings is about $600 billion. That would lower the amount of tax cuts available under reconciliation instructions, which hard-line Republicans might reject as insufficient.
But even if it doesn’t reach the preferred level of cuts, many Medicaid beneficiaries, and the states that co-manage the program with the federal government, will feel a definitive and deep impact, experts said, particularly those earning above the poverty line, those with a sudden need for coverage, patients in nursing homes, and residents of Washington, D.C. And it would burden beneficiaries and cause drops in coverage, a red line for moderates claiming that they are only concerned with waste, fraud, and abuse.
The House Energy and Commerce Committee, led by Rep. Brett Guthrie (R-KY), did not respond to a request for comment.
Negotiations in the House are ongoing this week, and the markup in the Energy and Commerce Committee is not expected until next week at the earliest. But sources tell the Prospect that text of the Energy and Commerce section could be released Friday. Republicans are looking to hold all the most contentious markups—in the Energy and Commerce, Ways and Means (which handles the tax provisions) and Agriculture (which deals with the Supplemental Nutrition Assistance Program, or food stamps) committees—on the same day, to make it hard for the opposition to focus.
But Medicaid cuts have been a point of emphasis for Democrats all year, and now the details are dribbling out.
THE MOST POTENTIALLY EXPLOSIVE ITEM on the menu, politically speaking, reads, “Cost-sharing above 100% FPL.” This appears to mean that Medicaid recipients making at or above the federal poverty level, which is $15,650 for a single individual and $21,150 for a two-person household, would have to pay some money for coverage—either in premiums, co-payments for hospital visits and other treatment, or other fees.
Currently, Medicaid gives states the option to impose out-of-pocket spending on recipients, though some populations and services, like children under 18 or pregnancy care, are exempted. Some premiums and enrollment fees are limited to beneficiaries above 150 percent of the poverty line; this policy would take that number lower.
Making poor people pay more for health care is exactly the kind of effective cut to Medicaid that moderate Republicans have sworn they would not abide. While reducing the federal share of Obamacare’s Medicaid expansion, which provides federal funding to extend Medicaid to adults under age 65 up to 138 percent of the poverty level in 40 states and D.C., is not part of the menu, this is a backdoor way of achieving something like that reduction, on the backs of individuals who get Medicaid.
“Whether you call it a co-pay, a premium, a fee, or a tax, the net result is either a reduction in the disposable incomes of those subject to the cost-sharing or people forgoing health care,” said Matt Bruenig of the People’s Policy Project. “When I look out into the American income distribution for places where I’d like to cut things back, families with incomes between 100 percent and 138 percent of the poverty line is not where my eye tends to go.”
According to the Kaiser Family Foundation, 61 percent of U.S. adults on Medicaid already work, and a large fraction of those who don’t are either disabled or elderly.
By comparison, the item on the list that would create one of the largest cuts to Medicaid is work requirements, which a road map released by the Senate Finance Committee estimated would save $100 billion over ten years. These work requirements would likely be limited to “able-bodied adults without dependents.”
But according to the Kaiser Family Foundation, 61 percent of U.S. adults on Medicaid already work, and a large fraction of those who don’t are either disabled or elderly. The requirement would primarily add red tape to the enrollment system and push people out of Medicaid bureaucratically—as we’ve seen with states like Arkansas that briefly experimented with work requirements during the first Trump administration—while being expensive to implement.
The change is one of several to the enrollment system for Medicaid, seemingly designed to create hurdles to access. Biden-era “eligibility and enrollment” rules would be repealed, which the Senate Finance road map claims would save $164 billion over ten years. These were designed mostly to simplify the system for so-called “dual eligibles” who get both Medicare and Medicaid coverage, and to roll back so-called “redeterminations” for elderly, disabled, and blind beneficiaries to test their eligibility from every six months to every year. Repealing these would make Medicaid harder to use and require more burdensome steps to retain coverage.
A separate provision would tighten the “retroactive eligibility” policy. Currently, many states pick up medical costs 90 days in advance of enrollment in Medicaid. This is primarily done to make sure someone is covered during complex eligibility situations, like when people seeking nursing home care must draw down savings to obtain nursing home coverage through Medicaid. “It has been helpful for trying to get into a nursing home, even if Medicaid is not fully activated,” said Orris, of CBPP. “It’s also important for car accident victims who might take a while getting out of a coma to apply.” The Republican proposal would cut the 90-day eligibility back to 30 days, which many argue is not enough of a cushion.
THOUGH OLDER BENEFICIARIES IN nursing home care may be spared from work requirements, they would feel the impact of a rollback of the Biden administration’s “safe staffing” rule, which required at least 3.48 hours of nursing care per resident per day and a registered nurse on site at all times. Repealing this rule would save a relatively paltry $22 billion over ten years, according to the Senate Finance road map, but would make nursing homes more dangerous for unsupervised residents.
The District of Columbia, already reeling from being shortchanged in the fiscal year 2025 budget, would take another hit. Currently, D.C. has a higher matching rate on its Medicaid program than other states; the federal government provides 70 percent of the costs, by statute. The reconciliation bill would change that to the standard formula used in other states, likely dropping D.C.’s match rate to 50 percent. This would be about an $800 million hit to the D.C. budget annually.
Other items on the menu include denying Medicaid to “immigrants,” where there are already pretty stringent requirements. The policy may make it difficult for providers to receive payment for emergency services for undocumented patients. A program passed in the American Rescue Plan to entice states to take the Medicaid expansion would be sunsetted, though only two states (South Dakota and North Carolina) took advantage of the opportunity. The benefits, a bigger federal match for Medicaid expansion for the first two years of activity, expires for South Dakota next month and at the end of the year for North Carolina.
Republicans also plan to end a loophole that made it easier for states to pay for Medicaid. If states tax their hospitals and then return that money to them in higher payments for Medicaid care, it looks like an increase in state Medicaid spending, triggering the federal match and more dollars coming from Washington. Every state now does this except for Alaska. The proposal in the bill would limit that provider tax to 5 percent. That would save $48 billion over a decade for the government, but states would have to pick up the burden. Red states, who use this loophole more aggressively, would actually be hit the hardest.
Overall, savings for the programs enumerated that have cost estimates would be close to $400 billion. That does not include the cost-sharing for people above the poverty line, which is hard to measure without details. It also does not include a measure that promises “No $ for gender affirming care” in Medicaid, though the impact on the budget would likely be microscopic. “There’s definitely a trillion dollars in that,” quipped Brendan Duke, a former Biden budget official with CBPP.
A plan to limit Medicaid “spread pricing” by pharmacy benefit managers would potentially lower drug prices, but the Congressional Budget Office only scores it at a $1.1 billion government savings over a decade. But the White House also asked for other changes to drug pricing in Medicaid, including a “most favored nation” status that would limit prices on prescriptions in Medicaid to what other countries pay. This kind of thing was proposed in Trump’s first term.
There are no Medicare changes in the bill, also at the request of the White House. But the Affordable Care Act would see some changes, including the codification of an ACA marketplace rule that the Trump administration proposed in March. This rule would increase premiums and raise out-of-pocket costs for millions of enrollees, according to a CBPP analysis. “The proposed changes would raise the cost of health coverage by hundreds of dollars for most of the 20 million people who get coverage through the ACA marketplace by reducing premium tax credits and letting insurers raise out-of-pocket charges,” the authors write.
Like the cost-sharing changes in Medicaid, this would create savings on the backs of people who need health care, and could lead to lower utilization and a sicker population. Similarly, cuts to the Social Services Block Grant and Temporary Assistance for Needy Families (which are not specified in the menu) save money for the government at the expense of vulnerable people. These savings are designed to generate offsets for tax cuts that Democrats insist will largely benefit the wealthy.
