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Medicaid Threats in the Upcoming Congress
December 13, 2024 @ 12:00 pm
Deeply damaging health coverage proposals recently advanced by Republican congressional leaders and conservative think tanks could gain traction in Congress next year.[1] Cutting Medicaid would harm enrollees — including the millions of children, people with disabilities, and elderly people with low incomes who are covered by Medicaid — and increase health inequities.Medicaid helps children develop into healthy adults and helps adults stay healthy. And it’s an overwhelmingly popular program.
About 72 million people receive health coverage through Medicaid.[2] It pays for 2 in 5 births in the U.S.[3] and is the nation’s largest payer both of behavioral health services, which include mental health and substance use disorder treatment,[4] and long-term care services, either at home or in nursing facilities.[5] (See Figure 1, and more details in the Appendix.) Medicaid helps children develop into healthy adults and helps adults stay healthy. And it’s an overwhelmingly popular program.[6]
Despite this, various Republican legislative proposals seek to cut Medicaid by eliminating or severely underfunding the Affordable Care Act (ACA) Medicaid expansion, by restructuring and cutting federal funding for the program as a whole, or by weakening long-standing program protections for enrollees.[7] Republicans often use improving program efficiency and program integrity as a rationale for their proposed cuts, but the real common thread in the proposals is that they would lead to widespread cuts in eligibility, benefits, and provider payment rates, potentially leaving millions without health care coverage and access to care they need.
For example, the proposed Medicaid cuts would jeopardize people’s ability to access and afford life-saving medications, treatment to manage chronic conditions, and care for acute illnesses. People with cancer would be diagnosed at later stages and face higher risks of mortality. People with chronic conditions such as cardiovascular disease, obesity, and liver disease would go untreated and have worse health outcomes. People under serious psychological distress would delay or forgo the care they need. And families would have more medical debt and less financial security. A large body of evidence bears this out: Medicaid improves health, prevents premature deaths, and reduces medical debt and the likelihood of catastrophic out-of-pocket medical costs.[8]
To be sure, there also is plenty of damage the incoming Trump Administration could inflict on Medicaid through administrative actions, as we saw during the first Trump Administration.[9] This paper, however, focuses on harmful legislative Medicaid proposals that Republicans have floated in the past[10] and that Congress should continue to resist.
Reducing Funding for Expansion Coverage for Low-Income Adults
The ACA expanded Medicaid to adults with household incomes up to 138 percent of the poverty level ($20,783 a year for an individual), with the federal government picking up most of the cost. The Supreme Court later made the expansion optional for states, but 40 states plus the District of Columbia have adopted it and now cover more than 20 million adults aged 19 to 64.[11]
Recent GOP budget plans have proposed reducing the 90 percent federal matching rate for Medicaid expansion to each state’s regular Medicaid matching rate.[12] Cutting the federal government’s commitment to funding 90 percent of the Medicaid expansion would reduce federal spending by $561 billion over nine years, beginning in fiscal year 2026, the Congressional Budget Office (CBO) estimates. [13] CBO’s estimate assumes that in response to the cutting the Medicaid matching rate, no states would newly opt to expand and some states would drop the expansion. Other proposals, in addition to reducing the expansion group matching rate, would explicitly limit the Medicaid expansion group to those with incomes up to 100 percent of the poverty level, leaving individuals over that income level to either find other coverage with higher out-of-pocket costs or become uninsured.[14]
States would face huge added costs if they wanted to maintain the Medicaid expansion at the lower matching rate. (See Table 1.) In a number of states, the cost of expansion would rise by more than $1 billion a year. Taking this much money away from states would make it likely that many states would drop the entire Medicaid expansion, which would result in millions of people losing coverage.
Indeed, 12 states have enacted “poison pill laws” that would end their expansion, automatically or nearly automatically, if the federal government’s contribution drops.[15] While some states might find a way to pay for providing coverage for some or all expansion enrollees, others likely would simply drop the expansion (as CBO expects), leading to an unprecedented increase in the uninsured rate.
* “Poison pills,” which some states have in their legislation authorizing Medicaid expansion, either trigger immediate termination of the expansion if the expansion group federal match rate decreases or require the state to evaluate the future of the expansion and, in some cases, ensure that state costs do not increase.
** Estimates for South Dakota and North Carolina, which expanded in 2023, are not shown given data limitations. North Carolina also has a “poison pill” provision.
*** Montana’s expansion will terminate on June 30, 2025 unless it is reauthorized.
Note: The current enrollment column displays actual data; the subsequent columns are estimates.
Source: CBPP estimates using data from the Medicaid Budget Expenditure System (MBES), Department of Health and Human Services federal match rates for 2025, and June 2024 Congressional Budget Office baseline projections.
If their states drop expansion, some Medicaid expansion enrollees with incomes modestly over the poverty level might be able to obtain marketplace coverage, but it has higher cost sharing than Medicaid — making care harder to afford — and the coverage itself would be unaffordable for many if enhanced premium tax credits are not extended.[16] And enrollees with incomes under the poverty level would have no alternative source of affordable coverage. CBO previously concluded that if Congress reduces the expansion matching rate, individuals could increase their own medical spending, which would prompt a “significant increase in medical debt and bankruptcies.”[17]
Ending the Medicaid expansion would also harm children, older adults, and people with disabilities who are covered by Medicaid but not through the expansion.[18] For example, studies have found that extending Medicaid coverage to parents has a “welcome mat” effect on children’s coverage because parents are likelier to sign up their eligible children when the whole family can get coverage.[19] And the rise in the number of uninsured people would lead to more uncompensated care, hurting health care providers[20] as well as state and local budgets.[21]
Reducing the Federal Matching Rate
Reducing the regular Medicaid matching rate for some or all states would significantly cut federal funding to states, leaving a large hole in state budgets that they would have to fill either by increasing state funding, cutting back on who is eligible for Medicaid and the health care services provided, or both. The federal reduction would be hard for states to absorb because Medicaid is the largest federal source of funds in state budgets.[22] Today, the federal government pays between 50 percent and 77 percent of the cost of providing most health services to most Medicaid enrollees.[23] The federal share is generally set higher in states with lower per capita income because higher-income states can afford to pay a larger share of Medicaid costs.
Various Republican proposals have included[24] reductions in the matching rate for some[25] or all[26] states. One proposal that CBO modeled — to remove the current “floor” on matching rates, which ensures that no state is below 50 percent — would significantly cut the federal government’s share of Medicaid spending and would cut overall federal spending by $530 billion in the impacted states over nine years.[27]
Table 2 shows that ten states and the District of Columbia would face significant losses from such a proposal in fiscal year 2025. To replace the loss of federal funding that year, these states combined would need to pay an additional $43 billion. If the floor were lowered to 40 percent rather than removed completely, these states would need to pay an additional $30 billion in fiscal year 2025.
Faced with cuts in federal funding of this size, states would likely reduce “optional” benefits — those that federal law does not require them to cover, such as home- and community-based services for seniors and people with disabilities or prescription drugs — or provider payment rates, according to CBO.[28] States could also scale back eligibility to reduce enrollment.
FMAP = Federal Medical Assistance Percentage
Note: Estimates show the increase in state expenditures that states would face in fiscal year 2025 under two alternatives: 1) the FMAP floor of 50 percent is removed and not replaced with an alternate floor; and 2) the FMAP floor is lowered from 50 to 40 percent. Resulting FMAPs would range from 0 to 47 percent if the 50 percent floor is removed, and 40 to 47 percent if the 50 percent floor is lowered. The District of Columbia currently has a 70 percent FMAP, which is established by federal law. The current enrollment column displays actual data; the subsequent columns are estimates.
Source: CBPP estimates using data from the Medicaid Budget Expenditure System (MBES), Department of Health and Human Services federal match rates for 2025, and June 2024 Congressional Budget Office baseline projections.
Capping Federal Spending
Since Medicaid’s inception, its funding model has been one where states put up a share of the cost of covered health care services and the federal government matches that state spending. This framework enables states to cover all individuals who meet program requirements. Various Republican proposals[29] would turn Medicaid into a block grant, meaning states would receive a fixed dollar amount from the federal government each year regardless of their costs,[30] or impose a per capita cap on federal funding.[31] Both proposals would dramatically change Medicaid’s funding structure, shifting costs to states and resulting in people losing coverage.
As recent calls to block-grant[32] or cap[33] Medicaid spending make clear, both approaches would be designed to cut federal funding to states by setting the block grant funding level or per capita cap to grow more slowly than would be needed to keep pace with rising enrollment or health care costs. As Figure 2 shows, even small initial cuts would grow over time, resulting in massive cumulative cuts. States could be forced to make even deeper cuts if enrollment or health costs are higher than expected due to a recession, pandemic, new drugs and other high-cost technologies, or cost growth across the public and private health care system.
To stay within capped funding, states would likely be empowered to take steps such as capping overall enrollment, cutting coverage for people in certain eligibility groups (such as “optional” groups, which include some children, some people with disabilities, and many adults), increasing cost sharing, reducing health benefits (either broad reductions or those more narrowly tailored to “optional” services), lowering payments to health care providers, or some combination of these. All of these changes would hurt enrollees.
CBO estimated various scenarios by which Congress could cap Medicaid spending, overall or by enrollee. For the scenarios CBO analyzed, capping overall spending would cut Medicaid dramatically and result in federal savings of between $459 billion and $742 billion over nine years, depending on the annual rate at which federal funding would be permitted to grow under the caps.[34] CBO also found that various options for capping per-enrollee spending would cut net federal spending by between $588 billion and $893 billion over nine years, again depending on how the policy is structured.[35] CBO also estimates that about half of the people losing Medicaid coverage would become uninsured. In a previous analysis, CBO noted that medical debt and bankruptcies would increase.[36] The cuts to Medicaid spending would only grow in the future.
Making It Harder for States to Draw Down Federal Support
States have flexibility in how they finance the non-federal share of Medicaid matching funds as long as they follow Medicaid law and regulations designed to ensure that they contribute a minimum amount of support to the program, do not use federal Medicaid dollars as the source of the non-federal share, and use federal funds to serve Medicaid enrollees. Republican proposals would destabilize Medicaid financing by eliminating some of this financing flexibility.
For example, Republican proposals would restrict — or, in the words of the Republican Study Committee budget, “effectively eliminate”[37] — health care taxes on providers, which all states except Alaska use to finance part of the state Medicaid share.[38] In recent years, states have used new or increased provider taxes to help raise additional state funds; they have used the money to help pay for adjusting provider reimbursements to keep pace with increased health costs, for averting Medicaid benefit cuts, and for expanding Medicaid benefits, including supporting the ACA Medicaid expansion.[39]
Restricting or ending states’ ability to use these revenues would open a hole in state budgets and have serious consequences for Medicaid enrollees, as states would likely respond by cutting benefits or eligibility, cutting provider rates, or otherwise limiting health care access for Medicaid beneficiaries.[40] Any of these responses mean that people will lose coverage, face higher out-of-pocket costs, or have reduced access to providers, including in rural communities where it can already be difficult for people to access care. CBO recently estimated the impact of various kinds of limits on provider taxes and found that the most significant would cut Medicaid deeply, with a net reduction in federal spending of $612 billion over nine years (fiscal years 2026-2034).[41] The total cut in Medicaid services to patients would be significantly larger because of the loss in state funding that the provider tax generates.
That’s not all: some Republican proposals would eliminate other approaches that states use to help pay for Medicaid, including the use of public funds transferred from or certified by entities such as local governments and public hospitals.
Taking Coverage Away From People Who Do Not Meet Work Requirements
Several recent Republican proposals would take Medicaid away from people who don’t meet burdensome work requirements.[42] Such proposals are based on the false assumption that adult Medicaid enrollees do not work.[43] In reality, nearly 2 in 3 non-elderly adult Medicaid enrollees work, according to 2023 data, and most of the rest have a disability, are caring for family members, or are attending school.[44] (See Figure 3.)
While work requirement proposals typically include exemptions for some enrollees, past experience in Arkansas[45] shows that large numbers of enrollees who work or should qualify for an exemption nevertheless lose coverage because they are caught up by administrative burdens and red tape.[46] We are seeing the same thing today in Georgia, which requires adults with low incomes to report at least 80 hours of work or volunteer activities each month as a condition of getting and keeping their coverage. As of October 2024, active enrollment stands at about 5,000 people, far less than the 110,000 people who expressed initial interest in applying for the program, and well under the estimated 240,000 uninsured people estimated to be eligible for the program.[47]
Moreover, research shows that Medicaid work requirements do not increase employment.[48] CBO recently concluded that a proposed federal work requirement would lead to coverage loss with “no change in employment or hours worked.”[49]
Making It Harder for People to Enroll or Renew Coverage
Republican proponents of large Medicaid cuts often cite concerns about Medicaid’s spending levels or error rates to justify imposing more arduous eligibility verification and determination procedures that would make it harder for eligible people to enroll or to stay enrolled.[50] For example, House Budget Committee Chairman Jodey Arrington recently claimed that checking enrollees’ Medicaid eligibility more often than once per year, the current standard for most enrollees, would cut $160 billion from Medicaid.[51] Adding more paperwork and administrative steps would jeopardize coverage among eligible people, so any savings would come largely from keeping eligible people out of the program.
Some have even proposed measures that would increase errors and make enrolling more difficult for people clearly eligible, making clear that their goals are to reduce the number of people getting coverage, not cost savings. For example, Republican proposals to add more paperwork requirements, limit the use of ex parte renewals (in which the state renews coverage using data it already has instead of asking enrollees for redundant information), and banning the use of pre-populated forms would increase errors, as well as burdens and expenses for states and enrollees.
Research shows that improper payments in Medicaid typically result not from fraud or abuse but instead from paperwork problems such as the state’s failure to document the data sources it used to verify information on a Medicaid application; many times they don’t involve enrollment of ineligible people.[52] Program integrity efforts should therefore focus on improving how state systems function so that eligible people can get and stay enrolled — not on keeping eligible people out of Medicaid.[53]
Conclusion
Recent Republican legislative proposals would cause people to lose health coverage, increase enrollees’ costs, and destabilize health care providers. States, already struggling in a difficult budgetary environment, would be forced to make deep cuts to Medicaid. Members of Congress shouldn’t ignore the impact of these proposals on Medicaid enrollees, providers, or states as they prepare to debate Medicaid next year.
Appendix
* The District of Columbia, Illinois, and Missouri reported enrollment for the new adult group with a difference greater than 20 percent compared to another data source, the CMS-64 enrollment report.
Note: Enrollment categories by eligibility group are for fiscal year 2022, the latest data publicly available. Medicaid enrollment today is generally lower than shown here due to the expiration of the continuous coverage requirement. Expansion adults refer to adults who became newly eligible for Medicaid under the Affordable Care Act (ACA). Senior refers to adults aged 65 and older. Seniors who qualify for Medicaid on the basis of disability are included in the seniors category. Other adults and children who qualify on the basis of disability are included in the disability category. – Dash indicates zero.
Source: Medicaid and CHIP Payment and Access Commission enrollment estimates from T-MSIS data for fiscal year 2022, and Census population estimates as of July 1, 2022.
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End Notes
[1] Allison Orris and Claire Heyison, “Republican Health Coverage Proposals Would Increase Number of Uninsured, Raise People’s Costs,” CBPP, updated November 27, 2024, https://www.cbpp.org/research/health/republican-health-coverage-proposals-would-increase-number-of-uninsured-raise.
[2] Centers for Medicare & Medicaid Services (CMS), “August 2024 Medicaid & CHIP Enrollment Data Highlights,” https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html.
[3] KFF, “Births Financed by Medicaid,” 2022, https://www.kff.org/medicaid/state-indicator/births-financed-by-medicaid/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D.
[4] Medicaid and CHIP Payment and Access Commission, “Access in Brief: Behavioral Health and Beneficiary Satisfaction by Race and Ethnicity,” January 2024, https://www.macpac.gov/wp-content/uploads/2024/01/Access-in-Brief-Behavioral-Health-and-Beneficiary-Satisfaction-by-Race-and-Ethnicity.pdf.
[5]Caitlin Murray et al., “Trends in Users and Expenditures for Home and Community-Based Services as a Share of Total Medicaid LTSS Users and Expenditures,” CMS, August 29, 2024,https://www.medicaid.gov/medicaid/long-term-services-supports/downloads/ltss-rebalancing-brief-2022.pdf; Priya Chidambaram and Alice Burns, “A Look at Nursing Facility Characteristics Between 2015 and 2023,” KFF, January 5, 2024, https://www.kff.org/medicaid/issue-brief/a-look-at-nursing-facility-characteristics/.
[6] KFF, “5 Charts About Public Opinion in Medicaid,” March 30, 2023, https://www.kff.org/medicaid/poll-finding/5-charts-about-public-opinion-on-medicaid/.
[7] Orris and Heyison, op. cit.
[8] Laura Harker and Breanna Sharer, “Medicaid Expansion: Frequently Asked Questions,” CBPP, updated June 14, 2024, https://www.cbpp.org/research/health/medicaid-expansion-frequently-asked-questions-0. Madeline Guth and Meghana Ammula, “Building on the Evidence Base: Studies on the Effects of Medicaid Expansion, February 2020 to March 2021,” KFF, May 6, 2021, https://www.kff.org/medicaid/report/building-on-the-evidence-base-studies-on-the-effects-of-medicaid-expansion-february-2020-to-march-2021/; Madeline Guth, Rachel Garfield, and Robin Rudowitz, “The Effects of Medicaid Expansion under the ACA: Studies from January 2014 to January 2020,” KFF, March 17, 2020, https://www.kff.org/medicaid/report/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review/.
[9] Sarah Lueck and Allison Orris, “Trump, Republican Congress Health Care Proposals Could Pose Risks to Access and Affordability,” CBPP, November 13, 2024, https://www.cbpp.org/blog/trump-republican-congress-health-care-proposals-could-pose-risks-to-access-and-affordability; CBPP, “The Trump Administration’s Health Care Sabotage,” January 15, 2021, https://www.cbpp.org/research/health/the-trump-administrations-health-care-sabotage; CBPP, “Sabotage Watch,” updated February 2, 2021, https://www.cbpp.org/sabotage-watch.
[10] Allison Orris and Sarah Lueck, “Congressional Republicans’ Budget Plans Are Likely to Cut Health Coverage,” CBPP, updated March 20, 2023, https://www.cbpp.org/research/health/congressional-republicans-budget-plans-are-likely-to-cut-health-coverage.
[11] CMS, “Quarterly Medicaid Enrollment Data – New Adult Group, January-March 2024, Medicaid MBES Enrollment,” November 2024, https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/medicaid-chip-enrollment-data/medicaid-enrollment-data-collected-through-mbes/index.html. The most recent data are from March 2024; enrollment in the new adult group has likely declined since then due to the unwinding of pandemic-era coverage protections.
[12] Orris and Heyison, op. cit.
[13] Congressional Budget Office (CBO), “Reduce Federal Matching Rates” from “Options for Reducing the Deficit, 2025-2034,” December 12, 2024, https://www.cbo.gov/publication/60557. These estimates account for offsetting increases in federal spending (such as premium tax credits for people who lose Medicaid and enroll in marketplace coverage) and any related revenue effects.
[14] Brian Blase and Drew Gonshorowski, “Medicaid Financing Reform: Stopping Discrimination Against the Most Vulnerable and Reducing Bias Favoring Wealthy States,” Paragon Health Institute, July 2024, https://paragoninstitute.org/medicaid/medicaid-financing-reform-stopping-discrimination-against-the-most-vulnerable-and-reducing-bias-favoring-wealthy-states/.
[15] Adam Searing, “Federal Funding Cuts to Medicaid May Trigger Automatic Loss of Health Coverage for Millions of Residents of Certain States,” Georgetown University Center for Children and Families (CCF), November 27, 2024, https://ccf.georgetown.edu/2024/11/27/federal-funding-cuts-to-medicaid-may-trigger-automatic-loss-of-health-coverage-for-millions-of-residents-of-certain-states/.
[16] Gideon Lukens and Elizabeth Zhang, “Premium Tax Credit Improvements Must Be Extended to Prevent Steep Rise in Health Care Costs,” CBPP, November 14, 2024, https://www.cbpp.org/sites/default/files/11-14-24health.pdf.
[17] CBO, “Options for Reducing the Deficit, 2023-2032 – Volume I: Larger Reductions,” December 7, 2022, https://www.cbo.gov/system/files/2022-12/58164-budget-options-large-effects.pdf.
[18] Laura Harker, “Medicaid Expansion Helps Newly Eligible Adults and Groups Traditionally Eligible for Medicaid,” CBPP, June 3, 2024, https://www.cbpp.org/research/health/medicaid-expansion-helps-newly-eligible-adults-and-groups-traditionally-eligible; Adam Searing and Aubrianna Osorio, “How Covering Adults Through Medicaid Expansion Helps Children,” Georgetown CCF, November 2024, https://ccf.georgetown.edu/wp-content/uploads/2024/11/Medicaid-expansion-v2-2.pdf.
[19] Liz Arjun and Jocelyn Guyer, “Putting Out the Welcome Mat: Implications of Coverage Expansions for Already-Eligible Children,” Georgetown CCF, September 2008, https://ccf.georgetown.edu/wp-content/uploads/2012/03/Strategy%20center_putting%20out%20the%20welcome%20mat.pdf. The “welcome mat” effect refers to enrollment increases among people who were previously eligible for coverage but not enrolled, following an eligibility expansion to a different group.
[20] Meghana Ammula and Madeline Guth, “What Does the Recent Literature Say about Medicaid Expansion?: Economic Impacts on Providers,” KFF, January 18, 2023, https://www.kff.org/medicaid/issue-brief/what-does-the-recent-literature-say-about-medicaid-expansion-economic-impacts-on-providers/; Rose C. Chu et al., “Medicaid: The Health and Economic Benefits of Expanding Eligibility,” HHS Office of the Assistance Secretary for Planning and Evaluation (ASPE), September 2024, https://aspe.hhs.gov/reports/benefits-expanding-medicaid-eligibility.
[21] Laura Harker and Breanna Sharer, “Medicaid Expansion: Frequently Asked Questions,” CBPP, updated June 14, 2024, https://www.cbpp.org/research/health/medicaid-expansion-frequently-asked-questions-0.
[22] National Association of State Budget Officers, “2023 State Expenditure Report,” https://www.nasbo.org/reports-data/state-expenditure-report.
[23] KFF, “Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier,” fiscal year 2025, https://www.kff.org/medicaid/state-indicator/federal-matching-rate-and-multiplier/?currentTimeframe=0&sortModel=%7B%22colId%22:%22FMAP%20Percentage%22,%22sort%22:%22desc%22%7D.
[24] Orris and Heyison, op cit.
[25] Blase and Gonshorowski, op cit. For a critique of the Paragon report, see Joan Alker and Edwin Park, “Another Sign that Trump 2 Will Target Medicaid for Deep, Damaging Cuts,” Georgetown CCF, July 24, 2024, https://ccf.georgetown.edu/2024/07/24/another-sign-that-trump-2-will-target-medicaid-for-deep-damaging-cuts/.
[26] Republican Study Committee, “Fiscal Sanity to Save America: Republican Study Committee FY 2025 Budget Proposal,” March 20, 2024, https://hern.house.gov/uploadedfiles/final_budget_including_letter_word_doc-final_as_of_march_25.pdf.
[27] CBO, 2024, op. cit. CBO’s estimated net federal savings include offsetting increases in federal spending.
[28] A previous CBO analysis noted that although impacted states might also seek savings by cutting eligibility, most states that would be affected by a reduction in the regular Medicaid matching rate have a history of expanding Medicaid coverage and may be less likely to reduce coverage even with a drop in their FMAP. CBO, 2022, op. cit.
[29] Orris and Heyison, op. cit.
[30] Edwin Park, “Medicaid Block Grant Would Slash Federal Funding, Shift Costs to States, and Leave Millions More Uninsured,” CBPP, November 30, 2016, https://www.cbpp.org/research/medicaid-block-grant-would-slash-federal-funding-shift-costs-to-states-and-leave-millions.
[31] Gideon Lukens and Allison Orris, “Changing Medicaid’s Funding Structure to a Per Capita Cap Would Shift Costs to States, Force Deep Cuts, and Leave Millions Uninsured,” CBPP, March 27, 2023, https://www.cbpp.org/research/health/changing-medicaids-funding-structure-to-a-per-capita-cap-would-shift-costs-to/.
[32] Robert King and Ben Leonard, “Cornyn, GOP eye Medicaid Reform,” Politico, November 14, 2024, https://subscriber.politicopro.com/article/2024/11/cornyn-gop-eye-medicaid-reform-00189689.
[33] A recent CATO Institute blog promises $300 billion in savings per year within a decade from capping Medicaid. Chris Edwards, “Ten Spending Cuts for President Trump,” CATO Institute, November 8, 2024, https://www.cato.org/blog/10-spending-cuts-president-trump.
[34] CBO, “Establish Caps on Federal Spending for Medicaid,” option from “Options for Reducing the Deficit, 2025-2034.” The estimates include a range of alternative caps on spending growth rates. Also, the estimates include only seven years in which either overall or per-enrollee caps are in place. However, CBO assumes small reductions in federal funding would begin two years prior to fiscal year 2028 implementation of the caps because the policies would deter some states that might otherwise adopt the ACA Medicaid expansion from doing so. CBO’s estimated net federal savings include offsetting increases in federal spending and any related revenue effects, including from the costs of marketplace premium tax credits.
[35] Ibid.
[36] CBO, 2022, op. cit.
[37] Republican Study Committee, “Fiscal Sanity to Save America: Republican Study Committee FY 2025 Budget Proposal,” March 20, 2024, https://hern.house.gov/uploadedfiles/final_budget_including_letter_word_doc-final_as_of_march_25.pdf.
[38] KFF, “States With At Least One Provider Tax in Place: SFY 2004 – SFY 2024,” https://www.kff.org/medicaid/state-indicator/states-with-at-least-one-provider-tax-in-place/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
[39] Critics argue that states use provider taxes to manipulate federal Medicaid financing: states levy a tax on providers, use the revenue to qualify for more federal matching funds, then return the revenue to the providers in the form of higher Medicaid reimbursements. Provider taxes used to be a source of some abuse, but federal laws enacted in 1991 and 2006, along with tougher federal regulations, have reined in manipulative state practices. See Edwin Park, “Limiting State Provider Taxes Would Shift Costs to States and Weaken Medicaid,” CBPP, updated March 16, 2016, https://www.cbpp.org/research/health/limiting-state-provider-taxes-would-shift-costs-to-states-and-weaken-medicaid.
[40] Ibid.
[41] CBO, “Limit State Taxes on Health Care Providers,” option from “Options for Reducing the Deficit, 2025-2034.” CBO also modeled the likely impact of other changes related to provider taxes.
[42] Orris and Heyison, op. cit.; Gideon Lukens, “McCarthy Medicaid Proposal Puts Millions of People in Expansion States at Risk of Losing Health Coverage,” CBPP, April 21, 2023, https://www.cbpp.org/research/health/mccarthy-medicaid-proposal-puts-millions-of-people-in-expansion-states-at-risk-of; Laura Harker, “Taking Medicaid Away for Not Meeting a Work-Reporting Requirement Would Keep People From Health Care,” CBPP, updated April 28, 2023, https://www.cbpp.org/research/health/taking-medicaid-away-for-not-meeting-a-work-reporting-requirement-would-keep-people.
[43] Ammula and Guth, op. cit.
[44] Gideon Lukens, “Research Note: Most Medicaid Enrollees Work, Refuting Proposals to Condition Medicaid on Unnecessary Work Requirements,” CBPP, November 12, 2024, https://www.cbpp.org/research/health/most-medicaid-enrollees-work-refuting-proposals-to-condition-medicaid-on.
[45] Laura Harker, “Pain But No Gain: Arkansas’ Failed Work-Reporting Requirements Should Not Be a Model,” CBPP, August 8, 2023, https://www.cbpp.org/sites/default/files/8-8-23health.pdf; Ian Hill and Emily Burroughs, “Lessons from Launching Medicaid Work Requirements in Arkansas,” Urban Institute, November 5, 2019, https://www.urban.org/sites/default/files/publication/101113/lessons_from_launching_medicaid_work_requirements_in_arkansas.pdf.
[46] Jennifer Wagner and Jessica Schubel, “States’ Experiences Confirm Harmful Effects of Medicaid Work Requirements,” CBPP, updated November 18, 2020, https://www.cbpp.org/health/states-experiences-confirming-harmful-effects-of-medicaid-work-requirements; Harker, “Taking Medicaid Away for Not Meeting a Work-Reporting Requirement,” op. cit.
[47] Leah Chan, “Georgia’s Pathways to Coverage Program: The First Year in Review,” Georgia Budget & Policy Institute, October 29, 2024, https://gbpi.org/wp-content/uploads/2024/10/PathwaystoCoverage_PolicyBrief_2024103.pdf.
[48] Benjamin D. Sommers et al., “Medicaid Work Requirements in Arkansas: Two-Year Impacts on Coverage, Employment, and Affordability of Care,” Health Affairs, September 2020, https://www.healthaffairs.org/doi/10.1377/hlthaff.2020.00538; Benjamin D. Sommers et al., “Medicaid Work Requirements – Results From the First Year in Arkansas,” New England Journal of Medicine, June 19, 2019, https://www.nejm.org/doi/full/10.1056/NEJMsr1901772?query=featured_home; Marybeth Musumeci, Robin Rudowitz, and Cornelia Hall, “An Early Look at Implementation of Medicaid Work Requirements in Arkansas,” KFF, October 8, 2018, https://www.kff.org/medicaid/issue-brief/an-early-look-at-implementation-of-medicaid-work-requirements-in-arkansas/.
[49] CBO, “Estimate of the Budgetary Effects of Medicaid Work Requirements Under H.R. 2811, the Limit, Save, Grow Act of 2023,” April 26, 2023, https://www.cbo.gov/publication/59109.
[50] Jackson Hammond, “Biden’s Medicaid Changes: High Costs, Misguided Policy,” Paragon Health Policy Institute, November 6, 2024, https://paragoninstitute.org/wp-content/uploads/2024/11/Bidens_Medicaid_Changes_Jackson-Hammond_FOR-RELEASE_V2.pdf.
[51] Jacob Bogage, Jeff Stein, and Dan Diamond, “Trump allies eye overhauling Medicaid, food stamps in tax legislation,” Washington Post, November 18, 2024, https://wapo.st/40SuTMR. Current federal regulations limit renewal frequency for the MAGI Medicaid population (children, parents, and expansion adults, whose eligibility is based on their modified adjusted gross income or MAGI) to no more than once every 12 months. Current regulations limit renewals for the non-MAGI Medicaid population (older adults and people with disabilities) to no more than once every six months, but renewal requirements for most of the non-MAGI population will match those for the MAGI population beginning in June 2027. See 42 CFR §435.916 (a), “Regularly scheduled renewals of Medicaid eligibility,” https://www.ecfr.gov/current/title-42/section-435.916 and CMS, “Medicaid Program: Streamlining the Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes,” Section B (1), April 2, 2024, https://www.federalregister.gov/d/2024-06566.
[52] Jessica Schubel, “Medicaid Improper Payment Rates Don’t Signal Fraud or Abuse,” CBPP, November 19, 2020, https://www.cbpp.org/blog/medicaid-improper-payment-rates-dont-signal-fraud-or-abuse.
[53] CBPP, “Medicaid: Compliance With Eligibility Requirements,” testimony of Senior Fellow Judith Solomon before the Senate Finance Subcommittee on Health Care, October, 30, 2019, https://www.cbpp.org/sites/default/files/atoms/files/js-testimony-10-30-19.pdf.
