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Demonstrators calling for preservation of Medicaid funding are removed from the House Energy and Commerce Committee markup of the FY2025 budget resolution, May 13, 2025, on Capitol Hill.
Under the guise of strengthening Medicaid, Republicans on the House Energy and Commerce Committee ended a 26-hour markup session last week with a party-line vote to gut the program. The sweeping cuts, which would slash federal funding for Medicaid by at least $625 billion over the next decade, comprise a significant portion of the reconciliation package Republicans are trying to pass before the upcoming Memorial Day recess.
The bill is designed to strip away much of the system of health care provision for the poor and working class in this country. The provisions weave a web of red tape around Medicaid, creating hurdles to access and making it harder to navigate. Republicans would force recipients whose incomes sit at or above the federal poverty line to pay higher out-of-pocket expenses for coverage, repeal Biden-era eligibility and enrollment rules, shift more of the bureaucratic responsibility for determining eligibility to states, and impose work requirements on childless adult enrollees.
The Republican plan also takes aim at a tax loophole states have used to secure additional Medicaid funding from the federal government, seeks to penalize states for using their own funds to cover undocumented immigrants by reducing Medicaid expansion rates, and rolls back the Biden administration’s “safe staffing” rule for nursing home employees.
The purpose of all this, of course, is to free up budgetary headroom for tax cuts for the rich. Unlike the original Trump tax cuts, which overwhelmingly benefited the wealthy but gave almost everyone at least a little something, this time they would take from the poor to give to the rich. As economist Paul Krugman points out, the bottom fifth of Americans would see their after-tax income decline by about 11 percent, while the top one-thousandth would see theirs rise by about 3 percent.
Rep. Frank Pallone Jr. (D-NJ), ranking member of the committee, has been one of the most prominent dissenting voices on the Democratic side. He bitterly condemned his Republican colleagues for prioritizing billionaires and corporate interests over vulnerable Americans who rely on Medicaid for health insurance. “This is not trimming fat from around the edges, it’s cutting to the bone. The overwhelming majority of the savings in this bill will come from taking health care away from millions of Americans,” he said.
Medicaid is the largest health insurance program in the country. More than 71 million people are enrolled in the program. According to estimates from the Congressional Budget Office (CBO), the cuts would kick 10.3 million Americans off Medicaid, 1.4 million off state-funded programs, and ultimately leave 7.6 million without insurance altogether. Sources previously told the Prospect such cuts do not seem to reach the $880 billion over ten years required in the committee’s budget reconciliation instructions. As millions of Americans’ access to health care hangs in the balance, Rep. Brett Guthrie (R-KY), chair of the committee, will need to get hard-line Republicans calling for deeper cuts to the program on board, as well as moderates who oppose the current scale of such cuts.
Democrats have been sounding the alarm on Medicaid cuts for the past year. During last week’s markup, they fought long and hard against the justifications for slashing the program. House Republicans defended the sweeping cuts, often hurling accusations at Democrats for fear-mongering and supposedly distorting the bill’s true intentions. In the end, Republicans on the committee rejected every Democratic amendment, including one that would have required the Department of Health and Human Services (HHS) to certify that the health care portions of the reconciliation package would not come at the expense of Medicaid benefits offered by states.
“House Republicans seek to obscure the impact of their health care cuts through complicated proposals, like limiting the ways states can fund Medicaid and adding lots of red tape and paperwork that makes it harder for people to get and keep health coverage,” said Sharon Parrott, president of the Center on Budget and Policy Priorities (CBPP). “But here, too, there’s no hiding the outcome: Millions of people, including children, will lose coverage and access to care for life-threatening and chronic illnesses as well as preventive care.”
ALTHOUGH REPUBLICANS INSIST their health care reforms are designed to root out “waste, fraud, and abuse,” imposing work requirements and increasing the frequency of eligibility verification would not strengthen or preserve the program for those who need it most. Such changes amount to onerous paperwork requirements, which appear to be designed to bureaucratically boot people off Medicaid.
For instance, the Republican plan would mandate states to require childless adults to prove that they work, volunteer, or are enrolled in an educational program for at least 80 hours per month on a monthly basis; it would also potentially deny coverage to newly unemployed individuals who are fired or laid off. Caregivers of dependent children, pregnant or postpartum individuals, and people with certain disabilities would be exempt from work requirements, but such people could still lose their coverage through bureaucratic snafus.
All Medicaid enrollees would be forced to navigate complex work-reporting and verification systems every month to retain coverage.
When Arkansas implemented work-reporting requirements for Medicaid recipients during the first Trump administration, the state did not automatically exempt vulnerable groups from work requirements, leading approximately 18,000 people to lose their coverage in the seven months the temporary policy was in effect. The vast majority of enrollees who lost coverage “should have been eligible to retain coverage but did not reapply,” according to CBPP, and a separate report published in The New England Journal of Medicine determined that “nearly everyone who was targeted by the policy already met the requirements.”
All Medicaid enrollees, including the 61 percent of U.S. adults enrolled in the program who already work, would be forced to navigate complex work-reporting and verification systems every month to retain coverage. A recent analysis from CBPP observed that states could opt to implement the mandate more stringently. Furthermore, applicants would be required to comply with work requirements for at least one month before enrolling in the program, and states would have the discretion to require prospective enrollees to be in compliance for “any number of months or even years before they’re allowed to enroll.”
Similarly, increasing the frequency of eligibility verification would also make it more difficult to access the program by halving the Medicaid redetermination period to once every six months and shortening the retroactive eligibility window to 30 days from the current 90-day period. Taken together, these measures would raise the bar for retaining coverage and, in the case of retroactive eligibility, giving states less time to provide coverage for people in complex eligibility situations.
THE CUTS DON’T STOP with Kafkaesque paperwork rules. Republicans would also impose cost-sharing requirements on Medicaid beneficiaries at or above the federal poverty level, and codify the Trump administration’s proposed reductions of Affordable Care Act (ACA) marketplace subsidies.
Medicaid recipients with incomes at or above the federal poverty line, which is $15,650 for individuals and $21,150 for two-person households, would be forced to pay more out of pocket for coverage though premiums, co-pays, and other fees, effectively saddling them with a greater portion of the program’s expenses. Medicaid currently allows states to impose out-of-pocket spending, but some premiums and enrollment fees are limited to beneficiaries above 150 percent of the federal poverty line. Republicans would reduce this threshold to 100 percent.
Another way states have boosted Medicaid funding, as my colleague David Dayen writes, is through the “provider tax loophole,” where states tax their hospitals and spend the money on Medicaid payments to hospitals, triggering additional federal assistance. Republicans would mostly close that loophole too by capping it at 5 percent, even though red states exploit it most aggressively.
Now, capping fees for certain services at $35 per visit and limiting cost-sharing to 5 percent of the income of an individual or household enrolled in Medicaid are perhaps the only commonsense provisions of the bill. But even this small benefit is more than canceled out by yet more proposed cuts to the ACA.
In March, President Trump proposed a rule reducing enhanced premium tax credits on ACA marketplaces, which would make coverage worse and more expensive. That rule might get tied up in court, but congressional Republicans want to codify it into law, rendering legal challenges moot. According to a CBPP analysis, people with chronic conditions will be hit especially hard if the rule goes into effect, as it would raise health care costs “by hundreds of dollars for most of the 20 million people who get coverage through the ACA marketplace.” The House Ways and Means Committee, which focuses on tax policy, will not be extending the tax credits. CBO estimates that 4.2 million Americans will go uninsured as a direct result of those credits expiring, while another 1.8 million will experience coverage losses if the ACA marketplace rule is codified.
“These cuts, even if not specifically directed at community-based disability services, will squeeze a system already in crisis, harming people with disabilities and the workers supporting them,” said Barbara Merrill, chief executive officer at ANCOR. “Despite the insistence by many members of Congress that they don’t want to cut benefits for people with disabilities, drastic funding cuts of any kind will reverberate across states, thereby endangering community-based disability services—the kinds of services that are often first to go when states experience funding shortfalls.”
The fear and anger stemming from the health care portion of the bill reached a boiling point last week. Following a series of demonstrations both within and outside the House Committee on Energy and Commerce markup, the Capitol Police arrested 26 protesters, removing several individuals in wheelchairs from the chamber. Among them was an attendee who rebuked Rep. Gary Palmer (R-AL) for suggesting people with disabilities would not be impacted by the cuts.
“You will kill me,” they proclaimed. “I’m HIV-positive.”
GUTTING MEDICAID will have devastating knock-on effects around the country. That was the conclusion of a report released by the Economic Policy Institute (EPI) earlier this year. “These cuts will not just cause harm to individual families, they will cascade, leading to hospital closures in rural counties, higher medical debt, lower earnings from future workers who will suffer from poorer health decades from now, and could even put upward pressure on federal budget deficits in the long run. In the very near term, these cuts will make the [U.S.] economy far more vulnerable to any recessionary shock.”
Health care providers in poorer regions will feel an especially definitive impact. According to estimates from the Milken Institute School of Public Health at George Washington University, projected declines in revenue across the health care industry could lead providers to shed close to half a million jobs. Hospitals, particularly those operating in rural areas, could be driven out of business by lower revenues and elevated uncompensated care costs.
“The magnitude of the proposals contained in the Energy and Commerce reconciliation text represents a devastating blow to the health and well-being of our nation’s most vulnerable citizens and communities,” said Rick Pollack, president and chief executive officer at the American Hospital Association (AHA).
Declines in revenue across the health care industry could lead providers to shed close to half a million jobs.
Nursing homes would face similar challenges, largely due to a rollback of the Biden administration’s minimum-staffing mandate for nursing home employees. The Biden-era rules require at least 3.48 hours of nursing care per resident per day and a registered nurse on-site at all times. Congressional Republicans are eyeing a ten-year delay of the mandate, arguing that a “one size fits all” approach would lead nursing homes facing staffing shortages to close. The problem with this is that facilities with inadequate staff-to-resident ratios will not be able to provide quality care, jeopardizing resident safety and well-being.
Other health care providers would suffer as well, including Planned Parenthood. The Republican plan would prohibit reproductive health organizations from accessing Medicaid funding; one-third of Planned Parenthood’s revenue comes from the federal government.
“Lawmakers are making it plain: This provision is about punishing Planned Parenthood health centers for providing abortion care, and threatening access to affordable birth control, wellness checkups, and cancer screenings for millions of people across the country in the process,” said Alexis McGill Johnson, president and chief executive officer at Planned Parenthood. “It is indefensible how far abortion opponents, who claim to care about women and families, are willing to go to shut down health centers and line the pockets of billionaires and big corporations.
On top of all this, the health care portion of the GOP mega-bill deliberately targets vulnerable communities by restricting access to gender-affirming care and denying Medicaid to individuals who, politically speaking, are not of “satisfactory immigration status.” Congressional Republicans are prepared to punish states for using state-owned funds to provide coverage for undocumented immigrants by slashing the federal matching rate for the ACA’s Medicaid expansion to 80 percent from 90 percent. Once again, the financial burden would fall on the states, making it harder for emergency service providers to receive payments from undocumented patients, and siphoning money out of the Medicaid expansion group (whose participants are largely U.S. citizens). CBPP denounced the policy, describing it as an attempt to “coerce states into not spending state funds in particular ways.”
THE GOAL OF THE REPUBLICAN PLAN is supposedly to “strengthen Medicaid for those who need it most,” Rep. Guthrie said in his opening remarks during the House Energy and Commerce Committee markup last week. He and his GOP colleagues claimed that they were merely rooting out waste, fraud, and abuse, and accused Democrats of fear-mongering about their plan. The reality, as we have seen, couldn’t be more obvious. The point is to take resources from the poor and working class, in the form of health care spending, and redirect them to the rich.
Since Trump won the 2016 Republican primary promising never to touch Social Security, Medicare, or Medicaid, many speculated that the traditional Reaganite ideology of deregulation and tax and welfare cuts was dead in the GOP. Maybe he would even raise taxes on the rich. But now we are seeing Trump’s Republicans far outdo Reagan at his own game, despite the fact that conservative regions tend to have more Medicaid enrollees than liberal ones. FDR’s New Deal administrative state is being obliterated, and a core part of LBJ’s Great Society is being devastated. “More for themselves, and less for everybody else” is the only Republican tax policy idea in Washington.
