In a move that could reshape the future of Medicaid, House Republicans introduced a sweeping piece of legislation late Sunday that would significantly reduce federal Medicaid spending through a series of new restrictions and eligibility requirements. The proposal is a part of a larger push by Republicans to cut government spending by at least $1.5 trillion to offset domestic priorities, including a proposed extension of tax cuts from President Trump’s 2017 tax overhaul.
Despite its potential for far-reaching changes, the bill does not include some of the more controversial proposals that had been floated earlier, including per-beneficiary spending caps or cuts to the federal share of Medicaid funding to states—measures that were backed by more conservative factions of the party.
Medicaid Restrictions and Work Requirements
The legislation, which was unveiled by the House Energy and Commerce Committee, focuses heavily on imposing new work requirements and eligibility checks for Medicaid recipients, aiming to save approximately $900 billion over the next decade. It requires that Medicaid recipients aged 19-64, who are deemed "able-bodied" and do not have dependents, must engage in "community engagement" activities, such as volunteering or attending school for at least 80 hours per month. The bill provides exceptions for pregnant women, people with serious medical conditions, and tribal members.
One of the primary savings in the bill comes from restricting Medicaid to those who are deemed able to work, which Republicans argue will encourage self-sufficiency and reduce dependency on government programs. Work requirements have long been a Republican priority, with President Trump’s administration actively encouraging states to implement such policies. According to a 2023 Congressional Budget Office (CBO) report, work requirements for individuals aged 19-55 could save up to $109 billion over ten years, though the policy would also result in approximately 600,000 people losing their health insurance.
The bill also introduces new cost-sharing measures, requiring beneficiaries with incomes just above the federal poverty line (currently $15,650 for a single individual) to pay $35 per care service they receive. This would apply to individuals earning between the federal poverty level and 138% of it, with a cap of 5% of a person’s income in out-of-pocket costs. These new rules would mark a sharp contrast to current Medicaid policy, which imposes strict limits on out-of-pocket costs for enrollees.
Controversial Social Issues
Beyond fiscal concerns, the bill also touches on contentious social issues. Most notably, it would prohibit Medicaid from covering gender-affirming care for minors. Additionally, the proposal would block Medicaid funding for community health organizations like Planned Parenthood, which provides family planning and abortion services.
“These policies are part of a broader conservative agenda that targets vulnerable populations,” said Rep. Frank Pallone Jr. (D-N.J.), ranking member of the committee. “This bill is an attack on the most vulnerable Americans under the guise of fiscal responsibility.”
Impact on Medicaid Enrollment
According to a CBO analysis released by House Democrats late Sunday, the legislation would increase the number of uninsured Americans by at least 8.6 million by 2034. "This is not trimming fat from around the edges; it's cutting to the bone," said Pallone in response to the bill’s release. He argued that the majority of the savings would come from stripping health care away from millions of people, rather than from more efficient government spending.
The proposed changes come as Republicans have been tasked with finding $880 billion in savings as part of the broader goal to reduce the federal deficit. However, moderates and Republicans from swing states have voiced objections to cuts that would reduce Medicaid benefits, raising concerns about the political ramifications of such drastic changes.
Provider Taxes and State Concerns
One of the most significant provisions of the bill is a freeze on new provider taxes, which are used by states to generate additional federal funding for Medicaid. These taxes, which are currently implemented in all states except Alaska, have become an entrenched part of state Medicaid programs, but conservatives argue that they function as a form of "money laundering." States, however, have expressed concerns that freezing these taxes would negatively impact their ability to fund Medicaid programs adequately.
A Battle Within the GOP
The bill, which will be the subject of a marathon committee hearing on Tuesday, appears to cater more to the moderate wing of the Republican Party, with some provisions intended to balance the more radical proposals from conservative factions. The exclusion of per-beneficiary caps on federal Medicaid spending and cuts to the federal share of Medicaid funding to states has been seen as an attempt to appease moderates and swing-state Republicans, who have voiced concerns about the political fallout from such cuts.
Energy and Commerce Chairman Rep. Brett Guthrie (R-Ky.), in a Wall Street Journal opinion piece published ahead of the bill’s release, defended the legislation, claiming it would not be a “cut” to Medicaid. “Undoubtedly, Democrats will use this as an opportunity to engage in fear-mongering and misrepresent our bill as an attack on Medicaid,” he wrote. “In reality, it preserves and strengthens Medicaid for children, mothers, people with disabilities, and the elderly—for whom the program was designed.”
The Road Ahead
As the bill moves to committee and eventually heads to a vote, its fate remains uncertain. While Republicans are largely united in their goal of reducing government spending, the internal divides over Medicaid cuts suggest that securing broad support for this legislation may be difficult.
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