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The potential for significant cuts to Medicaid, the U.S. government program that provides healthcare to low-income individuals, has become a contentious issue in Congress, with leaders from both major parties accusing each other of dishonesty.
On February 27, Hakeem Jeffries, the Democratic leader in the House of Representatives, claimed that a Republican budget proposal would initiate “the largest cut to Medicaid in American history,” while Republicans are concealing the consequences.
“The Republicans are lying to the American people about Medicaid,” Jeffries said. “I can’t say it any other way. Republicans are lying. Prove me wrong.”
Republicans, however, argued that Democrats are misrepresenting their budget. Congressman Steve Scalise stated, “The word Medicaid is not even in this bill.”
House Speaker Mike Johnson echoed this sentiment during a CNN appearance, asserting that Republicans have no intention of cutting Medicaid and accusing Democrats of spreading falsehoods.
Republicans are seeking substantial budget savings to extend the 2017 tax cuts enacted under former President Donald Trump. This effort is separate from Congress’s need to pass a continuing resolution to avoid a government shutdown by Friday.
Here’s what we know so far about the potential Medicaid cuts:
House Republican Budget Plan Proposes $880 Billion in Cuts
Medicaid serves approximately one in five Americans, with funding shared between the federal government and state governments. Louisiana, the home state of Johnson and Scalise, has one of the highest proportions of Medicaid enrollees.
The House Republican budget plan, adopted on February 25, paves the way for Medicaid cuts, even though it does not explicitly mention the program. The plan directs the House Energy and Commerce Committee to identify ways to reduce the deficit by at least $880 billion over the next decade.
This committee oversees Medicaid, Medicare, and the Children’s Health Insurance Program (CHIP), among other smaller initiatives. CHIP provides low-cost health coverage to children in families that earn too much to qualify for Medicaid.
Republicans have ruled out cuts to Medicare, the health insurance program for seniors, due to political risks. Medicare constitutes about 15% of the federal budget, while Medicaid accounts for 8.6%.
A March 5 analysis by the nonpartisan Congressional Budget Office found that Medicaid represents 93% of the funding under the committee’s jurisdiction if Medicare is excluded. This makes it impossible to achieve the $880 billion target without significantly cutting Medicaid.
“It’s a fantasy to imply that federal Medicaid assistance won’t be cut very deeply,” said Allison Orris, a Medicaid policy expert at the left-leaning Center on Budget and Policy Priorities.
CHIP, the next largest program under the committee’s jurisdiction, would not come close to covering the $880 billion target even if it were entirely eliminated, according to Joan Alker, a Medicaid and CHIP expert at Georgetown University.
Larry Levitt, executive vice president for health policy at KFF, a health policy organization, noted that if Medicare cuts are off the table, achieving $880 billion in savings would require substantial Medicaid reductions.
Andy Schneider, a Georgetown professor and former senior adviser at the Centers for Medicare & Medicaid Services under President Obama, pointed out that even if all other programs under the committee’s jurisdiction were eliminated, only $381 billion in savings—43% of the target—could be achieved.
“In short, if they don’t want to cut Medicaid [or CHIP], and they don’t want to cut Medicare, the goal of cutting $880 billion is impossible,” Schneider said.
The $880 billion cut is not finalized. While House Republicans passed their budget package, Senate Republicans have not proposed similar cuts, and their agreement would be necessary for any final budget plan.
Senator Josh Hawley is among Republicans who have opposed potential cuts, telling HuffPost, “I would not do severe cuts to Medicaid.”
Joe Antos, a healthcare expert at the conservative American Enterprise Institute, emphasized that the proposed figures are starting points for negotiations. “We are a long way from final legislation, so it’s not possible to predict how much any program will be cut,” he said.
Once the House and Senate agree on a resolution, committees would work on detailed cuts, which would require approval from both chambers and a signature from President Trump.
Why Eliminating Fraud Doesn’t Address the Problem
Republican leaders have sidestepped concerns about Medicaid cuts by focusing on eliminating fraud.
In a Fox News interview, Trump reiterated his campaign promise to protect Social Security, Medicare, and Medicaid, stating, “I’m not going to touch Social Security, Medicare, Medicaid. Now, we’re going to get fraud out of there.”
At the same time, Trump praised the House resolution, which would likely lead to significant cuts, calling it a full implementation of his “America First Agenda.”
Would eliminating fraud solve the Medicaid issue? No.
On CNN, Johnson claimed that cutting fraud, waste, and abuse would contribute to savings, citing $50 billion in annual Medicaid losses due to “fraud alone.”
However, Johnson conflated “fraud” with “improper payments.” The Government Accountability Office, a nonpartisan investigative body, identified $50 billion in improper Medicaid payments in 2023, the same amount as in Medicare.
Improper payments include overpayments, underpayments, payments that should not have been made, or those lacking sufficient documentation. This does not equate to $50 billion in fraud, which involves intentional misrepresentation.
The system used to identify improper payments is not designed to measure fraud, so the actual fraud-related losses remain unknown, Schneider explained.
Moreover, even if fraud were entirely eliminated, it would barely make a dent in the potential $880 billion in cuts.
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