House sets up potential Medicaid cuts with budget bill passage

Modern Healthcare – Tuesday, February 25, 2025
By Michael McAuliff

Republicans in the House took the first step Tuesday toward steep potential healthcare cuts, passing a budget resolution that aims to trim spending by at least $1.5 trillion while also adding trillions to the debt to fund tax cuts.

The House voted 217-215 on nearly party lines to begin what is known as budget reconciliation, passing a budget resolution that instructs committees to come up with cuts or extend tax cuts that largely benefit the wealthy.
The bill mandates the House Energy and Commerce Committee, which oversees Medicaid and Medicare, come up with the majority of the savings, and cut $880 billion.

That figure has prompted Democrats and advocates — including the major hospital associations — to oppose the plan, saying it would lead to deep Medicaid cuts and harm patients and providers.

“You would actually cut programs, cut the social safety net, cut the things that matter to working class Americans, middle class Americans, young people, seniors and others, including up to, if not more, $880 billion of cuts to Medicaid,” House Minority Leader Hakeem Jeffries (D-N.Y.) said during floor debate. “That’s the largest cut to Medicaid in American history.”

Republicans, however, have insisted Democrats are exaggerating to scare people, and no harm would be done to the federal health program that helps the poor.

“Everybody’s going to be thrown, according to Democrats, into all these horrible situations,” said House Majority Leader Steve Scalise (R-La.) in a news conference. “There’s only one problem. The word Medicaid is not even in this bill. This bill doesn’t even mention the word Medicaid a single time, and yet all Democrats are doing is lying about what’s in the budget.”

Asked if cuts to Medicaid were unequivocally off the table, House Speaker Mike Johnson (R-La.) declined to say that was the case. He told reporters Republicans would target waste and fraud in the program.

“Medicaid is hugely problematic because it has a lot of fraud, waste and abuse. Everybody knows that,” Johnson told reporters, citing a figure from the Government Accountability Office estimate that Medicaid makes about $50 billion in improper payments a year.

“Those are precious taxpayer dollars,” Johnson said. “Everybody is committed to preserving Medicaid benefits for those who desperately need it, who deserve it and qualify for it.”

Republicans have said they would target provider fraud and toughen eligibility rules, including through work requirements.

Rep. Brendan Boyle (D-Pa.), the ranking Democrat on the House Budget Committee, said there is no way for the Energy and Commerce Committee to hit its $880 billion target without recommending deep Medicaid cuts.

“There is only one place that can come from,” Boyle said. “Literally, if they cut 100% else of everything that Energy and Commerce has purview over, it would leave them hundreds of billions short. It has to come from Medicaid and the [Affordable Care Act marketplace] premiums.”

Some Republicans acknowledged Medicaid was at risk, but still voted to pass the resolution to get the budget reconciliation process started.

Rep. Juan Ciscomani (R-Ariz.) told reporters Tuesday he’s spoken twice to Johnson about shielding Medicaid and some other priorities.

“I’m still making my point all the way to the end about the need to protect the services that are important to my district,” Ciscomani said. “This is only the beginning, so this is where the real fight actually begins to protect the services that I’ve been fighting for protecting, and also while delivering on the promise of slashing down the size of government.”

Ciscomani and other Republicans in swing districts are acutely aware of the political pushback from previous attempts to cut healthcare spending, and the resistance from providers and patients.

Rep. Buddy Carter (R-Ga.) the chair of the Energy and Commerce Subcommittee on Health, who will have a major role in determining the cuts, simply answered, “Yes,” when asked by reporters if hospitals and patients would be spared from harm. Asked if he had figured out where the cuts would come from and how much would be from Medicaid, he answered, “No.”

Johnson said committees would go about their work over several weeks, with the goal of finishing next month. If the House can pass a bill, the reconciliation process allows the measure to move in the Senate on expedited procedures so it cannot be filibustered.

Republicans main aim is to extend the Tax Cuts and Jobs Act of 2017, which expires this year. The Congressional Budget Office estimates that doing so would add $4.6 trillion to the deficit over 10 years. The cuts being sought would offset only $1.5 trillion to $2 trillion of that cost.

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