GOP Seeks to Drastically Cut Medicaid Spending — How Are Healthcare Leaders Reacting?

House Republicans introduced a budget plan Wednesday that seeks to cut Medicaid spending by hundreds of billions of dollars. Leaders in the hospital world are sounding the alarm, highlighting that the plan would result in millions of vulnerable Americans losing healthcare coverage, as well as a surge in uncompensated care for providers.

The plan orders various congressional committees to find at least $1.5 trillion in spending cuts over the next decade. It directs the Energy and Commerce Committee, which oversees Medicare and Medicaid, to reduce its spending by $880 billion over 10 years.

The GOP’s budget blueprint doesn’t outline how the committee would achieve this target, but it’s clear that doing so would involve significant cuts to Medicaid. The nation’s Medicaid program, which provides health coverage for about 72 million Americans, accounts for one-sixth of all healthcare expenditures and is one of the largest programs under the Energy and Commerce Committee’s oversight.

One federal budget expert — Bobby Kogan, senior director of Federal Budget Policy at Center for American Progress and former adviser to the director of the Office of Management and Budget under the previous presidential administration — wrote on X that this plan would undoubtedly require major cuts to Medicaid.

“For Energy and Commerce, it’s mathematically impossible to achieve $880 billion in savings if you don’t cut Medicaid or Medicare. There’s not enough money they have jurisdiction over. Republicans say they’re not cutting Medicare, so that means they’re cutting Medicaid,” he wrote.

The House Budget Committee is set to approve the plan on Thursday. After that, the full House needs to advance the proposal in order for it to move on to Senate consideration and potential presidential approval.

It’s uncertain whether the budget plan will stay alive — House Energy and Commerce Chair Brett Guthrie (R-Kentucky) told Politico that he isn’t sure he will be successful in his efforts to build his member’s enthusiasm for Medicaid cuts.

Guthrie noted that it will be difficult to cultivate support for per-capita caps — a major cost cutting measure that would likely be necessary to achieve the savings goal proposed by the GOP plan. 

Medicaid per-capita caps seek to limit federal funding to states by providing a fixed amount per enrollee — differing from the current system, where the federal government matches a percentage of each state’s Medicaid spending. This change could reduce federal costs by hundreds of billions of dollars, but it would force states to restrict eligibility, make sweeping cuts to services, and potentially increase state spending to cover shortfalls.

“I’d personally love per-capita allotments for Medicaid,” Guthrie told Politico. “I’m not sure we’re going to be able to get 218 votes for that.”

Though the budget proposal’s future is still unsure, healthcare leaders are worried about it.

“To put the $880 billion in Medicaid cuts Republicans are considering in perspective, consider these [Congressional Budget Office] estimates: A Medicaid work requirement saves $109 billion. Eliminating enhanced federal matching payments for the ACA Medicaid expansion saves $604 billion,” Larry Levitt, KFF executive vice president for health policy, wrote on X.

Hours after the proposal was introduced, the American Hospital Association issued a statement urging Congress to “take seriously” the impact of Medicaid spending cuts.

“While some have suggested dramatic reductions in the Medicaid program as part of a reconciliation vehicle, we would urge Congress to reject that approach. Medicaid provides healthcare to many of our most vulnerable populations, including pregnant women, children, the elderly, disabled and many of our working class,” ” stated CEO and President Rick Pollack.

Photo: TimAbramowitz, Getty Images