Congressional Republicans signal on Medicaid cuts
GOP moderates are key votes in a closely divided Congress.
Various groups of Republicans have signaled what Medicaid cuts would — and would not — be acceptable to them, as major legislation advances.
Twelve Republican House moderates wrote an April 14 letter to Speaker Mike Johnson to say they support Medicaid and “cannot and will not support a final reconciliation bill that includes any reduction in Medicaid coverage for vulnerable populations.”
The congressmen — mostly from blue states — said they support “targeted reforms” that include:
- Improving program integrity
- Reducing improper payments
- Modernizing delivery systems to fix flaws in the program that divert resources
They wrote that cuts to Medicaid threaten the viability of hospitals and other providers.
“Many hospitals — particularly in rural and underserved areas — rely heavily on Medicaid funding, with some receiving over half their revenue from the program alone,” they wrote.
“Providers in these areas are especially at risk of closure, with many unable to recover,” they added. When hospitals close, it affects all constituents, regardless of healthcare coverage.”
The Republican members of Congress did not identify what specific policy changes they would support to meet the savings goals they identified. But one of the signatories, Rep. Nick LaLota (R-N.Y,) wrote on social media site X that specific Medicaid changes he supports are:
- Work requirements for able-bodied adults
- Six-month re-registration
- Restricting Medicaid to legal U.S. residents only
LaLota wrote those changes would save almost $400B over 10 years.
Relevant policy changes
Congress could target improper payments by implementing any of a range of previous proposals. For instance, a Government Accountability Office report said the $50 billion in Medicaid improper payments it found in 2023 could be cut by CMS better ensuring Medicaid demonstrations do not increase federal spending. Demonstrations are required to be budget neutral.
Additionally, Medicaid advocates said the letter from GOP moderates could indicate an openness to cuts among Medicaid enrollees made eligible by the Affordable Care Act’s eligibility expansion to non-disabled adults.
One way to obtain savings from the ACA expansion population, and one advocated by some conservatives and Republican members of Congress, would reduce the 90% federal funding match for ACA-eligible enrollees to the same match rate for previously eligible enrollees (50% to 77%).
Estimates by KFF projected that reducing the match would cut 10-year federal spending by $626 billion, if all states made up the difference. If all states instead opted to drop their expanded ACA coverage it would cut federal spending by $1.7 trillion.
Instituting work requirements have garnered support among Republican members of Congress and in public opinion polls, which has led some health policy observers to see it as the most likely Medicaid policy change.
Previous estimates by the Congressional Budget Office (CBO) projected $109 billion in 10-year savings from national Medicaid requirements for able-bodied adult enrollees to work, get training or volunteer.
In February, Rep. Eric Burlison (R-Mo.) introduced legislation with such requirements.
Additionally, Republicans in Congress may target the Biden administration’s 2024 Medicaid managed care rule changes, which bar states from limiting the 90-day “reasonable opportunity period” for Medicaid applicants to prove their citizenship. Conservatives say that change has resulted in many illegal immigrants getting coverage through the program, which is otherwise barred by federal law. That’s because the programs can indefinitely extend the enrollment period for people who cannot prove their legal status.
Congress also may target state-funded Medicaid coverage for non-citizens, like California’s coverage expansion to undocumented immigrants, on which it spends $4 billion annually. Conservative policy advocates say that funding source actually is federal taxpayers because provider taxes are matched and exceeded by a federal match.
Congress also may target eligibility determination requirements changed in the 2024 Medicaid rule. Those changes included prohibiting states from conducting eligibility reviews more frequently than every 12 months, requiring in-person interviews with disabled or elderly individuals, and barring the use of processing delays as a reason to terminate coverage.
Congress could roll back some of those rule changes on eligibility determinations to obtain an unknown amount of the federal savings. CMS said in the rule that, overall, its provisions would cost $45.2 billion over five years, including $22 billion for the federal government and $23.2 billion for states.
Other GOP views
In a closely divided Congress, Republican leaders cannot afford more than a few dissents from their own caucus in order to pass the budget reconciliation, which is the vehicle for extending tax cuts that are about to expire. The authorizing legislation, called a blueprint, was passed in early April and directed the Energy and Commerce (E&C) Committee to come up with $880 billion in 10-year cuts. Most of those cuts were expected to come from Medicaid.
However, during the push to pass that blueprint, Sen. Josh Hawley (R-Mo.) joined Sen. Ron Wyden (D-Ore.) to offer an amendment to strip the instructions to the E&C Committee for $880 billion in savings from the blueprint. The amendment failed but drew the support of two other Republicans: Sens. Susan Collins (Maine) and Lisa Murkowski (Alaska). However, all three Republicans have said they support work requirements in Medicaid.
