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One of the most important games being played in Washington right now is the struggle by congressional Republicans to make Medicaid cuts to pay for Donald Trump’s legislative agenda while pretending they aren’t really Medicaid cuts. The arithmetic and politics of the “big, beautiful” budget-reconciliation bill that will deliver Trump’s tax cuts and his defense and border-security spending have led to Medicaid bearing a lot of the brunt of generating money for other purposes. But Medicaid is popular, and morally compelling, and except on the far right of the Republican Party there’s no real constituency for stripping people who otherwise can’t get or afford health-insurance coverage.
Like a rancid onion, there are several layers of lies and half-truths being told mostly by the House Republicans who will soon unveil the reconciliation bill that will squeeze somewhere between $600 billion and $900 billion in “savings” out of Medicaid (the upper end of this range would represent about 16 percent of federal Medicaid spending). The first, and most easily exploded, myth is that they are simply getting rid of “waste, fraud, and abuse” in Medicaid without affecting the health-care benefits of any actual human beings. The “efficiency” measure being bounced around most consistently is a requirement that states do much more frequent eligibility determinations. What this means in English is that they hope a significant number of Medicaid beneficiaries get tripped up by a new blizzard of bureaucratic paperwork and get kicked out of the program, at least temporarily.
Beyond this stratagem, Republicans are trying to argue that only worthy beneficiaries should continue to receive Medicaid coverage. So one definite “reform” will be the imposition of some sort of work requirement for “able-bodied” adults receiving benefits. Sounds reasonable, right? But there are lots of devils in the details. According to the Kaiser Family Foundation (KFF), we’re not talking about many people who could just start punching a clock at will:
Among adults under age 65 with Medicaid who do not receive benefits from the Social Security disability programs, Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI), and who are not also covered by Medicare, 92% were working full or part time (64%), or not working due to caregiving responsibilities (12%), illness or disability (10%), or school attendance (7%). The remaining 8% of Medicaid adults reported that they are retired, unable to find work, or were not working for another reason.
States that have imposed work requirements under federal waivers have shown that people who can no longer qualify for Medicaid aren’t getting jobs but are just losing health insurance, which means when they get sick they’ll show up in emergency rooms for the most expensive care of all. It may make Republicans feel self-righteous, but it doesn’t save money. Denying people health insurance is generally a bad and costly idea.
The main thrust of the Republican effort to cut Medicaid while pretending it’s not happening, however, is to introduce the rather novel idea that traditional Medicaid beneficiaries won’t be affected. Here’s House Speaker Mike Johnson introducing this idea in mid-April, per The Hill:
“We have to root out fraud, waste, and abuse, we have to eliminate on, for example, on Medicaid who are not actually eligible to be there. Able-bodied workers, for example, young men, who are — who should never be on the program at all” … [emphasis added]
“And … when you have people on the program that are draining the resources, it takes it away from the people that are actually needing it the most and are intended to receive it. You’re talking about young single mothers down on their fortunes at the moment, the people with the real disabilities, the elderly.”
This is code for reversing the optional expansion of Medicaid that Congress enacted in 2009 in the Affordable Care Act, which 41 states have accepted. It was very much intended to let “young men” and adults generally who are poor or medically needy obtain Medicaid coverage. There’s a weird sort of Medicaid originalism at play in some of the GOP rhetoric: The idea is that Medicaid beneficiaries who wouldn’t have qualified when LBJ signed the original Medicare and Medicaid Act of 1965 are not worthy of coverage now. The deceptive thing, of course, is that the votes aren’t there to repeal the Medicaid expansion (Republicans tried and failed at that in 2017). So Republicans are almost certainly going to try to “save” federal dollars by shifting costs and the frightful duty of stripping people of coverage to the states, as Slate’s Jim Newell explains:
[H]ow do Republicans target the Medicaid expansion? Right now, they’re looking at a couple of different approaches to get the big savings they would need.
The first would be to do away with the expansion’s 90 percent federal match rate and offer expansion states the same federal match rate they get under traditional Medicaid. That would reduce the deficit by $561 billion over ten years, getting the committee most of the way to its $880 billion target. Their argument for this is that it’s unfair for states to get a better deal covering “able-bodied” people who are simply poor than for their most vulnerable populations. …
But “picking up” more of the cost was not part of the deal. States took up the expansion only because of the 90 percent match rate — indeed, that’s why the match rate was set up at 90 percent: to give states an offer they couldn’t refuse to help achieve Obamacare’s goal of near-universal health coverage. At this moment, in fact, 12 states have trigger laws that would end or amend the expansion were the federal share to dip below 90 percent. …
It’s partially because of these laws that negotiators are now reportedly leaning toward the second approach: per capita caps for the expansion population.
“Per capita caps,” which is Washington-ese for arbitrarily limiting federal responsibility, was the Medicaid-cut strategy deployed in the failed 2017 “Obamacare repeal” legislation. Either way, it’s a cost shift to the states that will almost certainly mean millions of people losing Medicaid benefits. And sorry, Mike Johnson, that’s a Medicaid cut not matter how you slice it.
