The prospect of deep cuts to Medicaid, the United States government programme to provide healthcare to low-income people, has become a flashpoint in Congress as leaders of both parties accuse their counterparts of lying.
Hakeem Jeffries, the Democratic Party leader in the House of Representatives, said on February 27 that a Republican budget measure would “set in motion the largest cut to Medicaid in American history” and Republicans are hiding the consequences.
“The Republicans are lying to the American people about Medicaid,” Jeffries said. “I can’t say it any other way. Republicans are lying. Prove me wrong.”
Republicans said Democrats were distorting the Republican budget. Congressman Steve Scalise said: “The word Medicaid is not even in this bill.”
House Speaker Mike Johnson said on CNN that Republicans don’t want to cut Medicaid “and the Democrats have been lying about it.”
Republicans are looking for massive budget savings to meet their goal of fully extending President Donald Trump’s 2017 tax cuts. This is a separate process from Congress’s need to pass a continuing resolution to keep the government running by Friday or else face a federal government shutdown.
Here’s what we know so far about potential Medicaid cuts.
House Republican budget plan seeks $880bn in cuts
Medicaid serves about one in five Americans. The healthcare programme is paid for by the federal government and partly by states. Louisiana, home to Johnson and Scalise, has one of the highest state proportions of Medicaid enrollees.
The House Republican budget plan adopted on February 25 opens the door to slashing Medicaid even though it doesn’t name the programme.
The plan directs the House Energy and Commerce Committee to find ways to cut the deficit by at least $880bn over the next decade.
The committee has jurisdiction over Medicaid, Medicare and the Children’s Health Insurance Program (CHIP) in addition to much smaller programmes. CHIP offers low-cost health coverage to children in families that earn too much money to qualify for Medicaid.
Republicans ruled out cuts to Medicare, the health insurance programme for senior citizens, which leaders cut at their political peril. Medicare is about 15 percent of the federal budget, and Medicaid is about 8.6 percent.
When Medicare is set aside, Medicaid accounts for 93 percent of the funding under the committee’s jurisdiction, the nonpartisan Congressional Budget Office found in a March 5 analysis. That means it is impossible for the committee to find enough cuts that don’t affect Medicaid.
“It’s a fantasy to imply that federal Medicaid assistance won’t be cut very deeply,” said Allison Orris, an expert on Medicaid policy at the Center on Budget and Policy Priorities, a left-leaning think tank.
After Medicaid, the next largest programme under the committee’s jurisdiction is CHIP. Lawmakers don’t appear to be planning to wipe out CHIP, but even if they did, they would be only a “fraction of the way there”, said Joan Alker, an expert on Medicaid and CHIP at Georgetown University in Washington, DC.
If Medicare cuts are off the table, the only way to achieve $880bn in savings is through big Medicaid cuts, said Larry Levitt, executive vice president for health policy at KFF, a health policy organisation.
Andy Schneider, a professor at Georgetown who served in former President Barack Obama’s administration as a senior adviser at the Centers for Medicare & Medicaid Services, said even if the committee eliminated all other programmes entirely, it could achieve only $381bn in savings – about 43 percent of the target.
“In short, if they don’t want to cut Medicaid [or CHIP], and they don’t want to cut Medicare, the goal of cutting $880bn is impossible,” Schneider said.
The $880bn cut is not a done deal. House Republicans were able to pass their budget package, but Senate Republicans are taking a different approach and haven’t proposed such significant cuts.
Any finalised budget blueprint would need Senate Republicans’ buy-in. Senator Josh Hawley is among Republicans who have spoken against potential cuts. He told the HuffPost: “I would not do severe cuts to Medicaid.”
The numbers are starting points that may lead to negotiation among at least Republicans, Joe Antos, a healthcare expert at the conservative American Enterprise Institute, said. “We are a long way from final legislation, so it’s not possible to predict how much any programme will be cut,” he said.
“If the bill also includes extending the [Trump 2017] tax cuts, we are probably months away from seeing real language,” Antos said.
Once the House and Senate reach an agreement on language and the resolution passes both chambers, the committees would work on detailed cuts. To enact such cuts, both chambers would need to approve a separate bill and receive Trump’s signature.
Why eliminating fraud doesn’t solve the problem
Republican leaders have deflected concerns about Medicaid cuts by talking about a different target: Medicaid fraud.
“I’m not going to touch Social Security, Medicare, Medicaid. Now, we’re going to get fraud out of there,” Trump said in an interview on the Fox News channel on Sunday in keeping with his campaign rhetoric that he would protect those programmes.
At the same time, Trump praised the House resolution that would make cuts highly likely: “The House Resolution implements my FULL America First Agenda, EVERYTHING, not just parts of it!” he said in a social media post.
Would eliminating fraud solve the Medicaid problem? No.
On CNN, Johnson said cutting fraud, waste and abuse would result in “part of the savings to accomplish this mission”. He said the government loses $50bn a year in Medicaid payments “just in fraud alone”.
But Johnson conflated “fraud” with “improper payments”. The Government Accountability Office, the nonpartisan investigative arm that examines the use of public funds, found about $50bn in improper payments in Medicaid and the same amount in Medicare in 2023.
Those improper payments were made in an incorrect amount (overpayment or underpayment), should not have been made at all, or had missing or insufficient documentation. But that doesn’t mean there was $50bn in Medicaid fraud, which would involve obtaining something through wilful misrepresentation.
The system used to identify improper payments is not designed to measure fraud, so we don’t know what percentage of improper payments were losses due to fraud, Schneider said.
Plus, it’s a drop in the overall bucket of the potential $880bn in cuts.
