The budget resolution does not specify how the committee must cut costs by $880 billion, but Medicare and Medicaid are by far the largest programs under its oversight. The $880 billion makes up more than half of the $1.5 trillion total cost reductions Republican lawmakers aim to achieve over the 10-year period.
In Early February, Elon Musk’s Department of Government Efficiency had gained access to CMS systems, which manage more than $1 trillion in annual payments. DOGE had been examining CMS spending data for potential fraud, abuse or waste but a federal judge on Feb. 8 blocked its access to the Treasury Department’s central payment system.
The Trump administration has said that it will not cut Medicare, but Medicaid and Affordable Care Act subsidies remain vulnerable, and it is difficult to see how the committee could meet its lofty cost-cutting target without significant cuts to federal healthcare programs.
“The House budget resolution calls for a reduction in mandatory spending of $2 trillion over a decade. Much of that could come from Medicaid cuts,” Larry Levitt, KFF executive vice president for health policy, wrote on X. “To put the $880 billion in Medicaid cuts Republicans are considering in perspective, consider these [Congressional Budget Office] estimates: A Medicaid work requirement saves $109 billion. Eliminating enhanced federal matching payments for the ACA Medicaid expansion saves $604 billion.”
Michael Tuffin, CEO of AHIP, the trade association representing health insurers, warned that disrupting Medicaid coverage would not cut healthcare costs; it would shift them and weaken efforts to fight against chronic disease.
“Medicaid is indispensable to low-income people and working families. If their Medicaid coverage is disrupted, these Americans will lose access to primary care and be unable to fill prescriptions for drugs to treat chronic illnesses,” Mr. Tuffin wrote in a Feb. 12 LinkedIn post. “Many will end up in the emergency room, the costliest site of care. Loss of Medicaid coverage means people will be less healthy and their care will ultimately cost more.”
Mr. Tuffin suggested that a more effective way to curb healthcare spending growth is to address underlying cost drivers, such as enacting site-neutral payment reforms and preventing abuse of the drug patent system, which stifles competition and keeps prices high.
National hospital groups swiftly opposed potential cuts to Medicare and Medicaid as the Senate and House budget committees began deliberations on their fiscal 2025 budget resolutions.
“The American Hospital Association urges Congress to take seriously the impact of reductions in healthcare programs, particularly Medicaid,” Rick Pollack, President and CEO, American Hospital Association, said in a Feb. 12 statement. “While some have suggested dramatic reductions in the Medicaid program as part of a reconciliation vehicle, we would urge Congress to reject that approach. Medicaid provides healthcare to many of our most vulnerable populations, including pregnant women, children, the elderly, disabled and many of our working class.”
America’s Essential Hospitals also strongly opposed House Republicans’ budget plan and condemned any cuts to Medicaid and Medicare that would result from the proposal.
“As the House works out the details of this budget order, we urge lawmakers to consider the devastating impact that Medicaid and Medicare cuts would have on the communities that rely on our essential hospitals,” Bruce Siegel, MD, AEH President and CEO, said. “As a nation, we cannot afford the resulting loss of life-saving safety net services that millions of Americans need to stay healthy.”
Chip Kahn, President and CEO, Federation of American Hospitals, stressed that policy to preserve health coverage must go the distance.
“Americans expect and deserve the health security Medicare, Medicaid and marketplace coverage ensure,” Mr. Khan said. “We must not forget the millions depending on Medicaid for care, including half of our nation’s kids, over 800,000 seniors in nursing homes and countless hardworking families.”
Medicaid and the Children’s Health Insurance Program provide health and long-term care coverage to nearly 82 million low-income people and those with disabilities. Medicaid is also a major source of funding for hospitals and other providers.
