Mar 28, 2024 - Health

GOP plans for Medicaid cuts could face backlash

Illustration of two elephants facing a caduceus between them

Illustration: Natalie Peeples/Axios

Former President Trump's recent promise not to cut entitlement programs is notably silent on Medicaid — but GOP ambitions for shrinking the safety-net health care program could risk backlash similar to the party's Obamacare repeal debacle.

Why it matters: Republicans who argue Medicaid has grown far too large are eyeing steep cuts to the program should the party win full control of Washington in November.

  • While Medicaid was long seen as less "untouchable" than Medicare and Social Security, that began to shift with the Affordable Care Act's expansion of Medicaid to low-income adults.

Context: The Republican Study Committee, an influential group of House conservatives, released a budget last week that calls for converting Medicaid from an open-ended entitlement into block grants.

  • Block grants, a long-favored GOP idea, would mean far less funding for Medicaid programs and would likely result in cuts to enrollment, benefits and already low reimbursements to providers.
  • The RSC argued that Medicaid, which now covers 1 in 5 Americans, is on an unsustainable path, and it criticized ACA's expansion to "healthy, able-bodied adults."
  • The Project 2025 plan from the Heritage Foundation also calls for caps on Medicaid spending.

The big picture: Strong resistance from the health industry — and even some Republican governors worried about the impact in their states — helped sink a Republican proposal to cap Medicaid funding during the failed 2017 ACA repeal effort.

  • The ACA and its Medicaid expansion has only grown more ingrained since then, and there are signs that GOP opposition in the 10 holdout states is starting to soften.
  • President Biden, meanwhile, has boasted about Medicaid expansion enrollment as he makes health care a big focus of his reelection effort.

Yes, but: Today's GOP is further right than than the one that abandoned ACA repeal in 2017.

  • Medicaid spending swelled to record levels during the pandemic, costing the federal government and states roughly $800 billion in 2022, as states were temporarily barred from removing enrollees.
  • Trump has repeatedly expressed vague interest in revisiting the ACA, which could mean changes to the Medicaid expansion. Trump's campaign did not respond to requests for comment.
  • "I think there's every reason to believe that Trump would look to cut Medicaid substantially if elected again," said Larry Levitt, executive vice president for health policy at KFF.

Zoom in: Republicans are pushing for other changes short of spending caps that could significantly reshape Medicaid.

  • Former Trump administration health official Brian Blase, now president of the Paragon Health Institute, is calling for reducing the federal government's 90% share of Medicaid expansion costs, which is much higher than its usual match rate.
  • Blase said that would ensure "the federal government's not paying more for the able-bodied expansion population than pregnant moms, kids and people with disabilities."
  • It would also push more costs onto states, which ACA supporters argue could discourage the remaining holdout states from expanding or even prompt some expansion states to drop coverage.
  • Blase said that change, along with ensuring that rich states compared with poor states aren't getting more generous federal support for Medicaid, "should be and would be on the table" in a second Trump term.

Some Republican states are also looking to revive rules tying Medicaid enrollment to employment, which could result in enrollment cuts.

  • Work rules approved by the Trump administration got bogged down in legal challenges.

The bottom line: "There will be a lot of pressure under Republican control to cut spending and taxes," said KFF's Levitt. "And if Medicare and Social Security are off the table, Medicaid is the obvious place to look."

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