Medicaid cut proposals incite fierce resistance

Modern Healthcare – Wednesday, March 26, 2025
By Michael McAuliff

The prospect of Congress slashing Medicaid to help pay for tax cuts has sparked a swift and thorough response from the healthcare sector and its allies. The campaign appears to be having an impact.

To see it, just look at how the dollar figures and rhetoric have changed on Capitol Hill since February.

When House Republicans first launched their bid to extend tax cuts from President Donald Trump’s first term, they circulated a document that proposes more than $2 trillion in cuts to the joint federal-state health program for low-income families, people with disabilities and older adults.

The House budget resolution that passed last month includes fiscal targets committees must meet, including the Energy and Commerce Committee, which is in charge of Medicaid and Medicare legislation. That panel is tasked with erasing $880 billion in federal spending over 10 years. That almost certainly means Medicaid cuts since Trump and congressional GOP leaders took Medicare off the table, according to a Congressional Budget Office analysis.

Yet top Republicans including Trump and House Speaker Mike Johnson (La.) have lately been insisting no harm will come to Medicaid, despite what the numbers say. This may reflect the public’s antipathy toward Medicaid cuts. Just 17% of Americans, and just 36% of Trump voters, favor taking money out of the program, the health policy research institution KFF found in a survey last month.

The GOP’s defensiveness on the issue is not lost on opponents of Medicaid cuts.

“The ambiguity you get from the speaker and some of the leaders, I think, reflects the fact that they know how sensitive this issue is,” said Chip Kahn, president and CEO of the Federation of American Hospitals, which represents investor-owned health systems such as Nashville, Tennessee-based HCA Healthcare, Dallas-based Tenet Health and King of Prussia, Pennsylvania-based Universal Health Services.

Such sensitivity in politicians doesn’t tend to manifest spontaneously. A broad coalition of providers, insurers, labor unions and Democratic politicians began mobilizing against Medicaid cuts almost as soon as House Republicans produced their memo in January that includes that eye-popping menu of cuts. That mobilization has accelerated in recent weeks.

Last Tuesday, House Democrats staged a “day of action” in numerous districts to motivate constituents to get involved. For instance, Minority Leader Hakeem Jeffries (D-N.Y.) visited the nonprofit Interfaith Medical Center in his Brooklyn district to deliver the message he wants heard everywhere.

“We’re going to do everything we have to do to stop these cuts from ever taking effect,” Jeffries said. “Medicaid is healthcare. It’s healthcare for the people in this community, in this city, in this country. And it is not simply a privilege to have healthcare in the United States of America. It is a right. And we’re gonna fight to make sure that that right is alive and well and save Medicaid.”

Republicans control the White House and Congress and are not much inclined these days to listen to Democrats, so the minority party’s campaign committee has also gotten involved, running advertisements highlighting Medicaid in 23 swing districts represented by Republicans.

They are not alone in the ad blitz. The left-leaning advocacy group Protect Our Care launched a $10 million campaign focused on many of the same districts in January. On top of that, health systems, nursing homes and others united under the Coalition to Strengthen America’s Healthcare launched their own, seven-figure ad campaign in some of the same areas.

Unions have also been active. For instance, the American Federation of State, County and Municipal Employees, which represents government workers, had its own “Protect Medicaid Day of Action” last Wednesday featuring an online phone-banking operation that targeted key legislators.

Still, it’s probably hospitals, which are the largest recipients of federal healthcare spending, that can have the greatest impact, since many are influential back home and often are the leading employers in House districts.

And they are trying.

“We’ve been clear that these proposed cuts would be devastating for patients and communities and that there’s a difference between making healthcare work better and simply cutting services that vulnerable people depend on,” Megan Cundari, senior director of federal relations at the American Hospital Association, said in a statement.

“We’ve been meeting regularly with congressional members to provide clear guidance on what these cuts would mean in real terms for patients, communities and for the hospitals they depend on for care,” Cundari said.

A crucial aspect of the AHA’s efforts, and as well as the Federation’s, has been direct appeals. Cundari said more than 150 leaders from hospitals and health systems visited the Capitol to meet with members of Congress two weeks ago.

Representatives from community health centers made a similar pilgrimage the week before.

Perhaps their biggest challenge is simply piercing the rhetoric Republicans use about waste, fraud and abuse in the healthcare system. Two frequent claims include charges that “able-bodied” adults take advantage of the system, and that states game the federal funding system with provider taxes and state-directed payments that reduce state spending and increase federal outlays.

In the case of “able-bodied” adults, KFF reports that 62% of Americans believe such people should be required to work to get Medicaid. But that fell to 32% when pollsters told respondents that nearly two-thirds of Medicaid recipients already work, and that most who don’t are students, are looking for work or are caring for relatives.

When those beneficiaries lose coverage, they still need healthcare, Kahn said, and wind up getting more expensive care in hospital emergency departments.

“There’s some assumption here that if they weren’t covered by Medicaid, there would be alternatives. But at those levels of income, if their employer doesn’t provide coverage, they’re not going to find any insurance,” Kahn said.

When it comes to the many ways states and hospitals use provider taxes and other budgetary mechanisms to maximize federal Medicaid funding, Kahn said there may be better ways for states to fund their share of program expenses, but it still boils down to hospitals needing the money.

“Without that, the Medicaid payments would be so below cost that access would be threatened,” Kahn said. “Frankly, even with the assistance of all the different payments within the complexity of Medicaid, it still comes in at 85%-89% of cost.”

Such points are made in visits to Capitol Hill, and by inviting lawmakers to hospitals to see things firsthand.

There’s also attention paid to specific Republicans in swing districts such as Rep. Juan Ciscomani (Ariz.) and Rep. David Valadao (Calif.) who voted for the GOP budget resolution, but only after they said they secured promises from Johnson to be careful about Medicaid.

Republicans hold 218 House seats to the Democrats’ 213, so GOP leaders can only afford to have two of their members vote against the tax and spending cuts package. The margins are just as tight in the Senate, which is in the early stages of assembling its version of the bill, where the GOP has a 53-47 advantage.

“It makes basically every Republican on the House side a Joe Manchin, potentially,” Kahn said, referring to the recently retired West Virginia senator who often used his deciding vote in the narrowly divided Senate to force the Democratic majority to moderate legislation. “Hopefully, we can persuade enough of them that for this, at least for this particular issue, they need to really hold the line.”

Rep. Danny Davis (D-Ill.), a member of the House Ways and Means Committee’s Health Subcommittee, agreed with healthcare advocates that deep Medicaid cuts would be damaging, but said in an interview after meeting with community health center leaders this month that the math of the GOP’s budget resolution may simply be too hard for Republicans to avoid such damage and deliver for Trump.

“Everybody knows that unless they do something, they can’t reach the goals that they’ve set for themselves unless they do something to Medicaid,” Davis said. Many community health centers trace up to 40% of their funding to Medicaid, one way or another, he said. “And if they do that, then that totally disrupts healthcare delivery throughout the nation. And I don’t know how the healthcare system can really take that.”

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