May 12, 2025

TIME SENSITIVE:Our national partner Families USA is holding an online briefing this afternoon at 4:30 pm about proposals to cut Medicaid that were released by House GOP Majority leaders.  The zoom link is HERE: 
Date: Monday, May 12, 2025
Time: 4:30 PM ET
Zoom Link: Join here Also below are links to background documents on these new proposals that will be considered by the House Energy and Commerce Committee at its mark-up meeting tomorrow.

• Press Release: Families USA Statement on Republican Plan to Slash Medicaid and Rip Health Care Away from Nearly 14 Million Americans
• Bill Text: House E&C Health Section
• Bill Summary: House E&C Health Subtitle Bill Summary
• CBO Score: House Dems-requested CBO score that details significant coverage losses
• Statement: Senator Ron Wyden’s Statement on GOP Medicaid Cuts

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More on the House GOP Budget Reconciliation Process, and specifically regarding the House Energy and Commerce Committee plan to save $880B over 10 years.  

(From the NYTimes, 5/12) The House E&C proposed plan includes the following:

• Adds “work requirements to Medicaid for poor, childless adults, mandating that they prove they are working 80 hours every month to stay enrolled. That is a less flexible version of a work requirement briefly imposed in Arkansas in 2018 that caused 18,000 people to rapidly lose coverage.”
• Paperwork “by allowing states to check the income and residency of beneficiaries more often, and by permitting them to terminate coverage for people who do not respond promptly. The use of such strategies had been curtailed under a regulation published during the Biden administration.”
• Cost sharing – “Medicaid beneficiaries who earn more than the federal poverty limit — around $15,650 for a single person — to pay higher co-payments for doctor visits.” $35 for many services. 
• State Budgets – “a change to long standing rules that allow states to impose taxes on hospitals, nursing homes and other providers and to use various accounting maneuvers to use the taxes to obtain more federal funding. The bill would freeze all state taxes at their current rates, and prevent states from using special related payments to pay hospitals higher prices for Medicaid services than Medicare pays.”
• States Covering Undocumented Immigrants on Medicaid – “The bill also takes direct aim at a handful of states controlled by Democrats that fund health coverage for undocumented immigrants, who are barred under the law from enrolling in Medicaid. The legislation would reduce federal funding for all childless adults without disabilities to 80 percent from 90 percent if the state subsidized coverage for such people. The change would mean significant funding cuts to states including California, New York and Washington unless they eliminated their state programs that enroll undocumented people.”
• Provision to prevent owners of expensive homes from obtaining nursing home coverage
• Provision barring coverage of gender-affirming care for transgender minors  
• Several provisions intended to purge the program’s rolls of ineligible immigrants and people who have died.
• Prevent Medicaid from funding health providers that also offer abortion services

There are no broad changes to FMAP [federal matching rates to states] and no per capita caps. Instead Republicans are focused on work requirements, increased paperwork, adding [out-of-pocket] cost-sharing on to people, and shifting some costs to states. 

Democrats are out with an unofficial estimate from CBO stating that the overall estimated deficit reduction will be $912 billion over the decade with the NYTimes reporting it will cause 8.6 million people to become uninsured, and Punchbowl reporting that it will cause 13.7 million more Americans to be uninsured. Note:  One area of discrepancy is that the NYTimes is reporting that some 2.3 million more people who are dual enrolled in Medicare and Medicaid will lose their Medicare but technically not left uninsured though they may not be able to afford the cost-sharing (copays & out of pocket expenses) that Medicare requires. Medicaid fills that gap for many poor seniors and people with disabilities. 

Anticipated Impact on Beneficiaries

• Adds a work requirement to Medicaid for poor, childless adults, mandating that they prove they are working 80 hours every month to stay enrolled.
• Requires Medicaid beneficiaries who earn more than the federal poverty limit — around $15,650 for a single person — to pay higher copayments for doctor visits. Typically, Medicaid requires very limited cost sharing from its beneficiaries, given their low incomes.  Requires co-payments of $35 for many medical services, in contrast to the $15-25 cost per visit for those receiving private insurance.
• Ratchets up paperwork requirements across the program, by allowing states to check the income and residency of beneficiaries more often, and by permitting them to terminate coverage for people who do not respond promptly. 
• An analysis of the paperwork change published by the Congressional Budget Office last week suggested that it would:
  • cause 2.3 million people to lose Medicaid coverage, many poor older and disabled people who are also enrolled in Medicare but use Medicaid to cover co-payments they cannot afford.
  • cause only 600,000 more Americans to lose any form of health insurance, but it would cause many more to have trouble paying for medical care.

• Prevents owners of expensive homes from obtaining nursing home coverage,
• Bars coverage of gender-affirming care for transgender minors
• Prevents Medicaid from funding health providers that also offer abortion services (aims at Planned Parenthood)
• Reduces federal funding for all childless adults without disabilities to 80 percent from 90 percent in states that subsidize coverage for undocumented individuals.

Impact on States

• The provision most likely to affect state budgets is a change to longstanding rules that allow states to impose taxes on hospitals, nursing homes and other providers and to use various accounting maneuvers to use the taxes to obtain more federal funding. The bill would freeze all state taxes at their current rates, and prevent states from using special related payments to pay hospitals higher prices for Medicaid services than Medicare pays.
• The bill also takes direct aim at a handful of states controlled by Democrats that fund health coverage for undocumented immigrants, who are barred under the law from enrolling in Medicaid.

• The legislation would reduce federal funding for all childless adults without disabilities to 80 percent from 90 percent if the state subsidized coverage for such people. The change would mean significant funding cuts to states including California, New York and Washington unless they eliminated their state programs that enroll undocumented people.
• It also includes several provisions meant to purge the program’s rolls of ineligible immigrants and people who have died.

• The legislation ratchets up paperwork requirements across the Medicaid program, by allowing states to check the income and residency of beneficiaries more often, and by permitting them to terminate coverage for people who do not respond promptly. The use of such strategies had been curtailed under a regulation published during the Biden administration.

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‘PROVIDER TAXES’ UNDER FIRE
A word about ‘provider taxes’ used by states to maximize federal revenue  (think: NYS’s new MCO Tax):  Congressional Republicans are still focused on curtailing or ending these ‘schemes’ as one way to achieve the steep federal spending reductions proposed in the House budget. If they did, it would save the federal government about $600 billion over the next decade, a large chunk of the $880 billion in cuts that the House committee that oversees Medicaid has been charged with finding.  Proposals from the House GOP re:  provider taxes do not include provisions to replace any lost dollars with new funding sources, which would leave some states with big holes in their Medicaid budgets. In some places, more than a third of federal Medicaid spending would vanish. To adjust to less money coming in, some would probably cut Medicaid coverage for working-age adults. Others would reduce payments to hospitals and nursing homes, or look at other parts of the state budget for cuts, like public education. A few might raise taxes.
The federal government has repeatedly attempted and failed to roll back provider taxes, both under Democrats and Republicans. In 2006, federal officials tried to do it through regulation, and Congress largely blocked the effort in the face of lobbying from governors and hospitals. In the 2010s, President Obama issued two budgets that proposed limits on their use, but Congress declined to pursue the idea.  Nevertheless, NYS applied for and received approval to implement a new MCO Tax that it is counting on to raise billions of dollars for state expenses.  Last week’s state budget agreement appropriates funds from the anticipated MCO Tax to raise rates for hospitals, nursing homes, long term care providers and federally qualified health centers.  

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