The U.S. House of Representatives is considering a budget proposal that would impose the largest cuts to Medicaid in the program’s history, potentially affecting the health care of 79.3 million Americans.

In late February, the House Energy and Commerce Committee introduced a budget resolution aimed at reducing health care and nutrition program funding by at least $880 billion through 2034. The full House is expected to vote on this measure in late April.

In a media briefing on March 21, hosted by Ethnic Media Services, a panel of experts discusses the cuts beings made to Medicaid and how that is going to harm millions of Americans. 

Speakers

  • Joan Alker, Executive Director of the Center for Children and Families and Research Professor at the Georgetown McCourt School of Public Policy Foundation
  • Stan Dorn, Director of the Health Policy Project at UnidosUS
  • Joanne Preece, Director of Government and External Affairs, Community Clinic Association of Los Angeles County
  • Anthony Wright, Executive Director, Families USA

The cuts would impact one-quarter of Americans enrolled in Medicaid and the Children’s Health Insurance Program (CHIP), including low-income individuals, seniors, pregnant women, and people with disabilities. The proposal could result in the loss of coverage for 15.9 million people.

“The magnitude of the cuts is extraordinary. Nothing in American history has been remotely this size,” said Stan Dorn. He noted that the largest previous cuts, made during the Reagan administration, amounted to $3.9 billion — significantly less than what’s now proposed, and affecting fewer people.

In 2023, Medicaid spending totaled about $860 billion. If the proposed cuts go through, each congressional district would lose an average of $2 billion in federal funds over the next nine years.

The measure passed the House committee on a nearly unanimous party-line vote. Dorn pointed out that while most bills require bipartisan support to pass the Senate, this budget resolution could bypass that requirement using the “fast-track” budget reconciliation process, allowing it to pass with only Republican votes.

“There’s no way you can cut huge amounts like this from Medicaid without hurting millions of people,” Dorn warned. He explained that these cuts are partly intended to offset the nearly $5 trillion cost of extending the Trump-era tax cuts for large corporations and the wealthy, which are set to expire this year.

House Speaker Mike Johnson plans to vote on the full budget bill by April 20 and hopes to have it on the president’s desk by Memorial Day, May 26.

Some of the proposed strategies for Medicaid cuts include limiting states’ ability to raise funds for Medicaid through taxes on insurance companies and hospitals, capping federal payments per enrollee, and ending Medicaid for people who don’t meet work requirements.

“Medicaid is the largest source of federal funds coming into states,” said Joan Alker. She warned that states would be unable to make up for these cuts through tax increases alone, leading to widespread effects on state budgets.

“States will be faced with pitting very, very vulnerable populations against one another — an aging population who needs long-term care, children, people with disabilities, low-income families,” she said.

Currently, Medicaid covers 72.1 million Americans, while CHIP covers 7.2 million, including over 37 million children, 20 million Latinos, 13 million Black individuals, 4.8 million Asian Americans, and 700,000 Native Americans.

Alker also stressed that the debate around cutting fraud in Medicaid misses the point. “We are hearing a lot about cutting fraud. But if you want to address fraud, and you look at where fraud occurs, people who are enrolled in Medicaid are the victims, not the perpetrators,” she said. She advocated for addressing fraud through better law enforcement, rather than limiting access to the program.

Community health centers, which provide care to 32.5 million patients — many of whom are Medicaid enrollees or uninsured — would be hit hard by these cuts. Joanne Preece said health centers would likely need to cut services and reduce staffing.

Medicaid is the primary funding source for health centers, covering 43% of the total $46.7 billion in revenue. Preece noted that “with cuts, you’ll probably see health centers forced to reduce operating hours, cut key programs, not hire new staff.”

Medicaid expansion has already had a positive effect on health care access. In Los Angeles County, the percentage of health center patients who are uninsured dropped from 58% in 2011 to just 14% in 2023.

Preece warned that cuts would not only impact health centers but the entire system, increasing reliance on emergency rooms and ultimately raising healthcare costs for everyone.

A recent poll by KFF found that two-thirds of Americans have had someone close to them benefit from Medicaid, and majorities across party lines hold favorable views of the program. Despite this, cuts to Medicaid could leave millions without health coverage and shift even more costs to struggling families.

“Last November, people voted with their wallets, seeking greater affordability, including for health care,” said Anthony Wright. “But the cuts proposed would shred our safety net, forcing families to lose coverage and access to health care and shifting costs onto people who are already struggling with costs for everything else.”

“These Medicaid cuts will be felt by people in every state and every congressional district in the nation, regardless of our race, ethnicity, party, health provider or how we get covered,” Wright concluded.

 

All images provided by Ethnic Media Services