GOP eyes substantial healthcare cuts

Republican lawmakers have outlined significant healthcare budget cuts, amounting to more than $3 trillion in savings, as part of broader efforts to extend expiring tax cuts and finance other priorities such as border security, according to Politico. The proposed reductions would see major changes to Medicaid, Medicare and the Affordable Care Act.

Six things to know:

1. The proposed Medicaid changes could save $2.3 trillion, with 86% of savings from a per capita cap, reducing the ACA expansion match rate, and lowering the Federal Medical Assistance Percentage floor below 50%, according to KFF.  The per capita cap would transition Medicaid payments away from open-ended entitlement to a population-based model. 

2. The Congressional Budget Office’s recent report outlines major savings opportunities through significant healthcare spending reforms. For Medicaid, transitioning to per capita caps could save up to $893 billion over 10 years. 

3. Republican lawmakers are also targeting Medicare cuts, which include implementing site-neutral payments, eliminating funding for hospital bad debts, and reducing uncompensated care funding. Hospitals' access to special Medicare payment classifications could also be restricted to limit costs. Eliminating nonprofit hospital status and banning facility and telehealth fees are also being considered. 

4. Equalizing payment rates for nondisabled adults would add $690 billion in savings, while work requirements could save more than $100 billion, according to the report. Cutting enhanced federal payments for ACA Medicaid expansion would reduce costs by $561 billion, and limiting states’ use of provider taxes could save $200 billion.

5. Further savings may come from limiting provider taxes, imposing work requirements and repealing new expansion incentives from the American Rescue Plan Act. These changes would overhaul Medicaid financing but could potentially lead to reduced coverage, fewer services or lower provider payments. 

6. The proposed cuts are expected to face significant opposition from Democrats and some Republicans, particularly those representing swing districts, according to Politico. Republicans aim to advance the proposals through budget reconciliation to bypass Senate filibusters, but internal divisions and narrow majorities could limit their scope.

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