Illustration: Lindsey Bailey/Axios
Congressional Republicans are beginning to discuss overhauling Medicaid as part of a reconciliation bill, according to GOP lawmakers.
Why it matters: Changes could significantly reshape the safety net program that covers more than 70 million people, saving money but also potentially leading to significant coverage losses.
Driving the news: Perhaps the most likely Medicaid change is imposing work requirements on recipients, according to GOP sources.
- That idea was already discussed as part of last year's debt ceiling talks and is familiar to GOP members.
- House Majority Leader Steve Scalise told Axios that Medicaid work requirements "potentially" could be included in reconciliation next year.
- Asked about other Medicaid spending changes, Scalise said members "have a lot of internal conversations to have about all the things that will be included."
Yes, but: It's not yet clear how much, if any, health policy will be packed into a reconciliation bill, since the overriding focus remains on extending the 2017 Trump tax cuts.
- There has been less recent enthusiasm for controversial health policy changes among Republicans, who'd prefer to focus on taxes, energy and immigration.
- But a health package could generate valuable savings to help pay for some of the tax cuts, and Medicaid is a large pot of money, costing over $800 billion per year.
- A previous CBO estimate of work requirements found they would save over $100 billion over 10 years and 600,000 people would become uninsured.
What they're saying: Rep. Brett Guthrie, one of two leading contenders for Energy and Commerce chair in the 119th, told Axios he is interested in reviving a proposal from the 2017 Affordable Care Act repeal-replace bill that would cap Medicaid spending on each enrollee, known as a "per capita cap" or allotment.
- "We offered Medicaid reform in reconciliation in the repeal-and-replace package, and it was per capita allotments, which didn't cut Medicaid but it does limit the growth," Guthrie said.
- "I do think it has to be discussed as part of the package [next year]," Guthrie said, adding that he hadn't yet discussed the idea with leadership.
Between the lines: Another potential change is reducing the federal share of spending on the Medicaid expansion population, currently at 90%, so that it matches the lower federal share for the traditional Medicaid population.
- "It makes no sense for federal policy to pay states more for able-bodied enrollees than for disabled people, children and pregnant women on the program," said Brian Blase, president of the Paragon Health Institute and a former Trump administration health official.
- The flip side is that a cash crunch in the states could lead some to drop the Medicaid expansion altogether. Forty states have expanded their programs.
The big picture: The first Trump administration approved Medicaid waivers for conservative-led states that imposed work and reporting requirements. But courts struck down many of the approvals.
- Republicans could be wary of political blowback from efforts to reshape the entitlement program this time around.
- Protests against Medicaid cuts, as well as possible resistance from some Republican governors, helped doom the repeal-replace effort in 2017.
- Democrats also are sure to portray any Medicaid cuts as penalizing the poor to help lower taxes on the wealthy.
Rep. Morgan Griffith, an Energy and Commerce member, acknowledged that "people get scared" when there is discussion of Medicaid work requirements, but he noted the possibility of exemptions for handicapped people or those in school.
- There have been "some private conversations," though "nothing formal" in the committee about Medicaid changes, he said.
The bottom line: "It's hard to make adjustments to reduce federal spending without touching people who rely on the program," said Robin Rudowitz, director of the Program on Medicaid and the Uninsured at KFF.
