The full court press is on to pass the “One Big Beautiful Bill” with President Trump visiting the House Republican Caucus this morning to pressure competing factions to just say “yes” and pass the bill this week — before the Memorial Day recess and before anyone has time to untangle what is in the bill. New CBO estimates find that the bill reported out of the House Budget Committee on Sunday would institute $792 billion in gross Medicaid cuts over ten years (under Subtitle D, Part I of the House Energy and Commerce section of the bill). These are the deepest cuts to Medicaid in the program’s history. But these estimates do not take into account additional changes included in new bill language released by the House Rules Committee on Monday as well as other changes reportedly under discussion.
Medicaid has become a major bone of contention with members of the House Freedom Caucus pushing for deeper Medicaid cuts despite the bill’s cuts already leading to an increase in the uninsured of at least 7.6 million people when it emerged from the Energy and Commerce Committee last week.
78.5 million people rely on Medicaid and its sister program the Children’s Health Insurance Program (CHIP) for their health insurance for acute and long-term care. Its importance to our health care system – and particularly for many incredibly vulnerable Americans including children, seniors in nursing homes, women of child-bearing age, and people with disabilities and chronic conditions such as cancer or substance use disorders cannot be overstated
Medicaid is also well known for its complexity. Which brings us to the rash actions of the House Republican leadership – moving draconian Medicaid cuts literally in the middle of the night without taking the time to understand what they mean. Just on Monday new language dropped from the Rules Committee which makes the already steep Medicaid cuts worse. While CBO has now issued some updated preliminary estimates — finding gross Medicaid cuts of $792 billion, which is up by roughly $100 billion from last week’s incomplete analysis that did not estimate the impact of 10 provisions — CBO did not take into account these new Medicaid changes.
Moreover, they still need to estimate interactive effects of the many moving parts of the bill including between the health provisions of the Energy and Commerce Committee and Ways and Means sections of the bill. So we still do not know the bill’s combined impact on coverage and the uninsured. But considering that earlier CBO estimates find that the cuts to the Affordable Care Act’s marketplaces in the Energy and Commerce Committee section of the bill are expected to increase the number of uninsured by another 1 million people and the marketplace cuts in the Ways and Means section of the bill are expected to increase the number of uninsured by another 2.1 million people, the number of uninsured could easily increase by 10 million or more overall.
There are a small handful of provisions which have been well vetted and have bipartisan support such as drug pricing provisions related to Medicaid pharmacy reimbursement and pharmacy benefit managers. But the vast majority of this bill does not fall into this category and will have huge implications. Complex provisions changing the way states raise their share of the funding through provider taxes are not well understood and could have enormous negative implications.
We outline here our best understanding of several changes in the Rules Committee version below. But to be clear, much more time is required to truly understand the meaning of all of these changes and their interactive effects.
- Expanding the scope of federal Medicaid expansion funding cuts to states that cover lawfully residing children and pregnant women. Under the original section 44111 of the bill, the current 90 percent matching rate for the Medicaid expansion would be cut by 10 percentage points for the 14 states and the District of Columbia now providing coverage to undocumented children and some undocumented adults, even though the coverage is financed solely by state funds. The Rules Committee version would expand this provision, applying the expansion matching rate cut to states that also use an option enacted in the CHIP reauthorization of 2009 to provide federally funded Medicaid and CHIP coverage to certain lawfully residing children and pregnant women. That would affect an additional 19 expansion states. So more than 80 percent of all expansion states would face a painful choice: dramatically increase their own expansion spending to compensate for this cost shift or drop their coverage for immigrant children, pregnant women and others.
- Placing states at greater risk of large federal funding cuts for payment errors. Under current law, states with erroneous Medicaid payments associated with eligibility errors found under Medicaid Eligibility Quality Control (MEQC) reviews could face federal funding reductions related to those errors. But states are eligible for “good faith” waivers from the Secretary. The original section 44107 would effectively eliminate most of the Secretary’s authority to grant these waivers starting in 2030. The Rules Committee version goes further by including any errors found under the Payment Error Rate Measurement (PERM) program and other audits. Since PERM eligibility errors (like all PERM errors) are often due to missing documentation rather than an actual finding of ineligibility, this could lead states to be overly aggressive in using red tape to discourage enrollment among eligible individuals.
- Excluding some services from the mandatory cost-sharing imposed on expansion enrollees. Under section 44142, states are required to impose cost-sharing of as much as $35 for most services on expansion enrollees between 100 percent and 138 percent of the federal poverty line. The Rules Committee version would exempt some additional services — primary care, mental health and substance use disorder services —from these mandatory cost-sharing charges but the higher cost-sharing would still apply to services like specialty physician care, lab/x-ray services and therapy services.
Moreover, the Rules Committee version does not include other changes to the Medicaid cuts that are being actively discussed by House Republican leadership. That includes advancing the effective date of the bill’s onerous work requirements — which would apply to expansion enrollees and have harmful effects on parents and children— from 2029 to as early as 2027.
The Rules Committee announced its plan to move ahead at 1 a.m. Wednesday morning, with the goal of voting on the reconciliation bill on the House floor later this week. Could Congress be pursuing these policies in the dark of night because poll after poll has shown that voters of all political stripes oppose Medicaid cuts? The pattern of moving at night to avoid public scrutiny and accountability has been unmistakable here – the first iteration of the bill text was made public around 10:30 pm on Mother’s Day and less than two days later the Energy and Commerce Committee commenced its 26.5 hour debate on these Medicaid cuts at around 1 a.m. Yet the draconian Medicaid cuts included in the reconciliation bill would place at severe risk coverage and access for tens of millions of children, parents, seniors, people with disabilities and other adults who rely on the Medicaid program. They would also adversely affect the hospitals and other health care providers that serve them, placing vital health systems at risk including in rural communities. The cuts would create large shortfalls in state budgets, leaving governors and state legislatures no choice but to make painful cuts to their Medicaid programs. The nation deserves far better from Congressional Republican leaders.