What to do about Medicaid in Donald Trump's "Big, Beautiful, Bill" continues to bedevil the Republicans. Speaker Mike Johnson is trying to develop a formula that would please hard-line budget hawks, moderates, and members who represent swing districts, who are terrified that cuts to Medicaid will hand Democrats a potent election-year issue.
Conservative hardliners are demanding $2 trillion in cuts over 10 years. That's not going to happen because it would throw too many people off the program. The Congressional Budget Office (CBO) released some estimates of the impact that some of the GOP proposed cuts would have on Medicaid recipients, and the picture is grim.
Reducing the federal share of Medicaid payments to states is one of the most popular ideas proposed by Republicans. When Obamacare expanded Medicaid, it also dramatically increased the amount the federal government paid to states. This was a bribe to states, tempting them to expand Medicaid by paying 90% or more of the additional costs.
If the Republicans reduced those payments to pre-Obamacare levels, the CBO estimates that 5.5 million recipients will lose coverage. A large percentage of those losing coverage live in red states, making many members skittish about the plan.
According to the CBO, repealing a Biden-era rule that was supposed to lower barriers to Medicaid enrollment would result in 2.3 million people losing benefits.
The bottom line is that those Republicans who want an easy way out of cutting Medicaid or, at least, looking for Medicaid cuts that don't mean that millions of people will be thrown off Medicaid, are barking at the moon.
Republicans made it clear that the Democratic Party's "fear-mongering" about Medicaid misses the point. The House Energy and Commerce Committee, which is trying to find $880 billion in mostly Medicaid savings over the next ten years, points to the fact that the Medicaid program is one of the most abused federal programs in existence.
While Democrats fear monger, Republicans are planning to strengthen, sustain, and secure Medicaid for generations to come. @HouseCommerce Republicans are rooting out the waste, fraud, and abuse to ensure Medicaid funds go to those who truly need it—mothers, children, seniors, and…
— Energy and Commerce Committee (@HouseCommerce) May 7, 2025
If House Republicans could find the estimated 10% of the ineligible, fraudulent, and wasteful spending in the program, they could easily meet their goal of cutting $880 billion in ten years. However, identifying who is ineligible or fraudulently receiving benefits is a state job. And most of them are lax in verifying eligibility requirements.
For example, at one time, half of Medicaid enrollees in Illinois were found to be ineligible for coverage. The rush to grant Medicaid benefits to people due to COVID-19 also meant that millions of people were receiving benefits who probably weren't eligible for them. Did those people who lost their jobs temporarily during the pandemic tell the state they were back at work? Not likely.
Republicans have to face facts. Being a member of Congress means making hard choices. There's no way around them. And these choices confronting Republicans are the hardest that members are going to face in their careers.
The $4.5 trillion in Trump's 2017 tax cuts that will expire at the end of the year are on the line. Trimming Medicaid will result in millions of people losing insurance benefits. Most Republicans see both proposals as necessary.
A group of 32 hard-line budget hawks sent a letter to Johnson demanding $2 trillion in cuts over 10 years across the board.
Meanwhile, a group of 32 Republicans sent a letter to Johnson on Wednesday insisting that “the reconciliation bill must include at least $2 trillion in verifiable savings either through spending reductions or scaling back the size of the tax package” in order to win their votes.
“Critically, the deficit reduction target must be met with real, enforceable spending cuts — not budget gimmicks,” the GOP lawmakers wrote in the letter, led by Rep. Lloyd Smucker, R-Pa.
Ahead of the letter’s release, Rep. Scott Perry, R-Pa., a former chair of the far-right House Freedom Caucus, said in an interview he simply won’t vote for a bill that adds to the deficit.
“I’m not worried. I got a vote, and if somebody’s gonna ask me to vote to bankrupt the country — I don’t know what that coalition is, but I’m not going to be in it,” said Perry, a rare GOP hard-liner in a competitive district who narrowly won re-election last fall.
Reducing the tax cut is a no-go at this point, although I have a sneaking suspicion that they will revisit that idea at some point.
Is Trump's "Big, Beautiful Bill" even doable? The sausage-making on Medicaid is obscuring the fact that progress on the bill has been made on other fronts. Medicaid is the last big sticking point in the House, although the Senate has its own problems.
