Michigan Medicaid has ballooned. Cuts are likely. Here’s what to know By Robin Erb - May 1, 2025
* In just over three decades, Medicaid has more than doubled its coverage in Michigan — now paying for more than 2 in 5 newborns and 2 in 3 nursing home residents * Advocates say cuts will shred Michigan’s safety net for the state’s most vulnerable * But where some see ‘cuts,’ others see a need for ‘efficiencies’ in the billions of tax dollars each year that pay for the growing program
MAPLE CITY— Medicaid in Michigan can be measured by lots of big numbers — from the nearly 2.7 residents it covered last year to its $7.5 billion chunk of the state budget.
It can be sized up by its growth, too: It now covers 1 in 4 state residents, up from 1 in 8 in 1991, and costs the federal government $584 billion, up from $52.5 billion in 1991.
The numbers likely will play center stage next week as Congress weighs whether to pass deep cuts to Medicaid as part of President Donald Trump’s budget that includes big tax cuts and increases in border security.
Gwenne Allgaier views the Medicaid debate in four words.
“It keeps her alive.”
She’s referring to her daughter, Amber Hartley. In 2023, she had a heart attack. Now, the former waitress and mother of two has about a third of her heart’s function, but only because of the drugs that Medicaid covers for her, the two women said.
It’s a struggle to climb the steps to the second floor or carry groceries. Hartley can’t work, so she instead babysits for the family.
Pills, if she runs out, are $60 each, Hartley, 49, and her mother said.
“I’d be dead without Medicaid,” Hartley agreed from their timber-frame cabin in this tiny northern Michigan town.
For her part, Allgaier — a Democrat and Leelanau County commissioner — said she also used Medicaid for 2 ½ years in the 1970s. She was a single mom taking night classes to eventually work as a therapist. Medicaid paid for doctor’s visits for her little girls — one of them Amber — who had the normal run of ear infections and sore throats and childhood immunizations.
These days, granddaughter, Piper, 22, a Northwestern Michigan College student, uses Medicaid for routine checks and her eyeglasses.
Congress is considering ways to trim $880 billion over 10 years from federal health programs, with Medicaid expected to account for pretty much all of that.
States like Michigan, where the vast majority of Medicaid funds come from the federal government, would have to figure out how to reduce services, trim people from the program or backfill the cuts with millions of dollars from other programs — public safety and infrastructure, for example.
Proponents of the cuts say the program has grown too fast, particularly under the Affordable Care Act, and that the federal government needs right-sizing: Federal debt has ballooned to $36 trillion and now, annual interest payments on that debt cost $881 billion. That’s about as much as the proposed Medicaid cut and more than the government spends on veterans or children.
That debt, critics say, could lead to an economic crisis.
People like Allgaier, as well as national and state groups representing doctors and patient advocates, hospitals and social services, worry what those cuts will mean for them or the patients they serve.
“The magnitude is hard to wrap your head around, because we just don't have the resources at the state level to backfill a cut of this nature,” said Jen Flood, the state’s budget director.
Cuts in Michigan could go as deep as $2 billion a year, Flood said during a sit-down interview with Bridge Wednesday alongside Elizabeth Hertel, the director of the Michigan Department of Health and Human Services.
The loss of that much federal funding would carve a hole in the state’s $83.5 billion budget that could only be backfilled by moving general fund dollars from other services — public safety and education, for example.
Flood and Hertel say such cuts would not only hurt patients and providers’ ability to serve them, they would hobble the state’s very economy.
“Health care is one of our largest sectors in the state,” Flood said.
There’s little room for compromise, Hertel said. Medicaid improves health care for new moms and babies, for example, and for people who previously had not been able to address substance abuse or chronic conditions.
“How do you compromise on that?” she said. “How much do you want to compromise on the economy?
In Cadillac in northern Michigan last month, Hertel joined leaders from Traverse City-based Munson Healthcare and the Michigan Health and Hospital Association to defend Medicaid against potential cuts.
Pulling Medicaid funds from hospitals has a domino effect for all residents — whatever their insurer, they said.
That’s because Medicaid is part of the “payer mix” that, alongside reimbursements from Medicare and commercial insurance, are the lifeblood of health care. If the payer mix is upset, rural hospitals and units that operate on the slimmest margins are most at risk, said Peter Marinoff, president of Cadillac Hospital and of Munson Healthcare's South Region.
Consider the Family Birthing Center within Munson’s Cadillac hospital.
Babies don’t schedule when they will arrive. There is no part-time option here. And that tenuous payer mix that includes Medicaid allows the hospital to operate the round-the-clock unit — whether there are 10 babies born in a week or two.
“When we close intensive care for newborns, when we close labor and delivery units, they are closing for everyone,” Laura Appel, senior vice president and chief innovation officer at the Michigan Health & Hospital Association, said at the gathering.
When birthing centers and other crucial services disappear, so does the ability to grow the economy, she said.
“Keeping our rural communities attractive for people to come here, stay here, work here — it's very difficult when you don't have the appropriate services that folks expect,” Appel said.
Too big, too costly? Others argue, though, that Medicaid has simply grown too big, too complicated and too costly for American taxpayers.
Where some decry possible “cuts,” Michigan Sen. Jim Runestad, R-White Lake, and others see “efficiencies” and the need to shore up the integrity of the program for far fewer beneficiaries
And the growth in Medicaid has been significant in Michigan. In 1991, about 1.1 million Michiganders — or about 1 in 8 residents — was covered by Medicaid, according to US Centers for Medicare & Medicaid Services data. By the end of last year, that number had increased to 2.8 million, or more than one in four residents, according to state data.
The expansion of Medicaid eligibility under the Affordable Care Act and signed by Republican Gov. Rick Snyder in 2013 with bipartisan support, significantly grew the state’s Medicaid program. Still, the state also has added benefits over time, such as coverage for those affected by the Flint water crisis and bolstered coverage for people with behavioral health needs and substance use disorders.
There is excess to trim that — in addition to saving taxpayers money — will make the program stronger in the long run, Runestad and others say.
Among the first changes, some argue, is that able-bodied people, especially those without dependents, should work for Medicaid, or at least prove that they’re trying to find work.
While government should take care of those with disabilities and others who cannot work, Medicaid has grown too big and too costly for taxpayers, argues Michigan Sen. Jim Runestad and James Hohman of the Mackinac Center for Public Policy.
Nationwide, about 92% of those under 65 who receive Medicaid are working full-time.
“Obviously you can't have somebody work with a mental or physical infirmity where they cannot do (the work), or if they have young children, but if you're an able-bodied male or female, let's take a look at it,” he said.
That’s a first step of a broader effort, Runestad said, of tackling “waste, fraud and abuse” in the system.
The US Government Accountability Office last year estimated more than more than $100 billion in “improper payments” in Medicaid and in Medicare — the latter of which does not appear to be a target for cuts.
Another analysis — one that others have criticized — has put that improper spending even higher.
Critics argue Medicaid has become a “cash cow” for states that use their own money to draw down even more matching federal dollars, as well as for hospitals and doctors that are paid by Medicaid to provide care for the states’ low-income residents and those in nursing homes.
Medicare, contrary to wide belief, generally pays only for short-term, rehabilitative care in nursing homes.
The very structure of Medicaid is flawed in that it is based on states spending dollars to draw down even more federal dollars, said James Hohman, director of fiscal policy at the Midland-based Mackinac Center for Public Policy. For example, the federal government now picks up about 90% of benefits for those in the Healthy Michigan Plan, the expanded Medicaid program that covers adults whose household income is up to 133% of the federal poverty level.
Medicaid in Michigan has grown over time, covering more than 2 of 5 births and 2 in 3 nursing home residents. Opponents of Medicaid cuts say they would endanger some delivery units, like the Family Birthing Center at Cadillac’s Munson hospital.
While it sounds like a great deal — spend 10 cents and draw down 90 more in the expanded Medicaid program, for example — it’s all taxpayer money. Moreover, now it’s packaged with complicated federal bureaucracy and rules, Hohman said.
“The problem is that it is a game that is rigged against us, against local taxpayers,” he said.
He and others would like to see safety-net health care coverage shifted to the states.
As it stands now, states are more focused on drawing down money rather than quality care, agreed Joshua Archambault, a senior fellow at the Texas-based conservative-leaning Cicero Institute.
If federal policies pull back Medicaid growth, he said, it will shift the responsibility on states to decide how best to care for residents.
“To remain in Medicaid is to remain poor,” he said. “Is that really success?” he asked. “The incentives have been such for so long that the focus is on the wrong place.”
Lower costs than most states
Back in Lansing, Hertel also was talking about “efficiency” this week.
She defended Medicaid’s growth over the years. It has been thoughtful and precise, she said.
It’s also been largely driven by Michigan’s rapidly aging population; more people are leaning on Medicaid for nursing home care and long-term services at home, she noted.
Moreover, she said, Michigan has some of the lowest costs per beneficiary among states. That’s backed up by an analysis by the San Francisco-based health research nonprofit, KFF, which found Michigan spent $5,835 per enrollee in 2021, compared to a national average of $7,593.
“From a perspective in Michigan, we've been incredibly effective at how much we pay for Medicaid and how much that has increased over the past 25 years.”
Some excellent graphics worth your attention at the original Bridge Michigan article hyperlinked at the top.
Michigan spent $5,835 per enrollee in 2021, compared to a national average of $7,593.
So... is that administrative spending, or spending on care?
Most likely the latter, which begs the question of administrative costs. The MDHHS budget currently stands at $38 Billion. Whatever portion of that goes to Medicaid administration, Michigan could virtually eliminate by transitioning to spending accounts for the truly needy. Banks and the IRS already oversee HSA use.
To answer the post's title question: YES. Michigan has no real choice but to prioritize Medicaid spending, as opposed to endlessly expanding this broken program.
Speaker of the House Mike Johnsonsaid Tuesday that states will have to figure out on their own how to adjust to proposed reforms to food stamps and health care programs in the congressional Republicans’ “big, beautiful” budget bill.
“We’re going to be good stewards of thetaxpayers’ resources,” Johnson, R-La., said to The Daily Signal at a Capitol Hill press conference. “The states will adjust to all of these things.”
The trickiest piece of the House of Representatives’ budget plan is a proposed$880 billion cutover 10 years to the Energy and Commerce Committee, which handles Medicare and Medicaid.
Republican House leadership has argued that much of those cuts can be found in eliminating waste, fraud, and abuse, but others have acknowledged the need to restructure programs and shift some responsibilities to the states.
Energy and Commerce Chairman Brett Guthrie, R-Ky., for example, is currently trying to figure out how to deal with states that have expanded Medicaid access to more people under theAffordable Care Act.
Asked Monday about the possibility of “capping or reducing federal Medicaid payments to those states,” Guthrie replied, “That is an issue we have to negotiate through.”
When it comes to food stamps, it’s possible states will also have to alter their responsibilities. PoliticoreportedTuesday that Ways and Means Committee Republicans would meet Tuesday to discuss pushing Supplemental Nutrition Assistance Program “benefit costs onto states for the first time.”
The potential for a radical restructuring of the funding for these programs will likely complicate the job of governors in formulating their states’ budget plans, as they can no longer take the old status quo for granted.
Hochul has accused congressional Republicans of attacking the program, but she has not accounted for what the final federal budget might look like.
Top New York Democrats haveacknowledgedthey might have to readjust their budget in a special session when more information comes out.
When The Daily Signal asked Johnson on Tuesday if he would advise governors such as Hochul on how to prepare for the federal budget’s changes, he jokingly replied, “Yeah, I’m not sure Kathy Hochul and I are going to sit down and talk aboutNew York’sbudget.”
Johnson criticized Democrats’assertionsthat Republicans would cut Medicaid as lies and suggested that states would be able to adjust.
“We’re going topreserve the program,not cut it,” he said. “It’s exactly the opposite of what the Democrats are saying. So, the states will adjust to all of these things, and we will make sure that the people who need these benefits and rely upon them are protected.”
Viewpoint: Cutting Medicaid would devastate Michigan health care, economy By Brian Peters
Proposed cuts to Medicaid funding threaten healthcare access for millions of Michiganders, including children, seniors, and working families.
The Protect MI Care coalition, comprising healthcare providers and community organizations, urges Congress to reject Medicaid cuts to safeguard healthcare access for all Michiganders.
Medicaid is more than just a government program — it’s a lifeline for millions of Michigan families and a cornerstone of our health care system. Right now, there are proposals in Washington that would cut or cap Medicaid funding or change how the program works. If those changes go through, it will put the health and financial stability of all Michigan providers and the patients they serve at risk — including children, seniors, people with disabilities and working families.
That’s why, on behalf of Protect MI Care, a coalition of health care providers, advocates and community organizations, we’re urging our elected leaders to stand up for the people of Michigan and protect Medicaid.
We recently launched the Protect MI Care coalition alongside more than 100 organizations from across Michigan, representing health care, education, community and social service groups. Together, we sent a clear message to Congress: do not cut or cap Medicaid benefits or funding. Our coalition stands united in protecting access to care for every Michigander who relies on Medicaid to maintain their health and independence.
Medicaid is the backbone of Michigan’s health care system. More than 2.6 million people in our state depend on Medicaid for essential care — including more than 1 million children, seniors who need long-term services, people with disabilities seeking independence and working families struggling to afford private insurance.
Medicaid covers a wide range of services, from basic checkups to cancer treatments and lifesaving medications. In fact, nearly half of all children in Michigan are covered by Medicaid, and in 2024, 45% of all babies born here relied on the program. In many rural counties, Medicaid covers the majority of births, making it crucial for keeping birthing services open in those communities.
Beyond basic health care, Medicaid also plays a critical role in behavioral health and substance use treatment, especially in rural and underserved areas. And while the personal health benefits are obvious, Medicaid is also a powerful economic engine. The program supports more than $24 billion in annual health care services in Michigan, with more than three-quarters of funding coming from the federal government. Medicaid expansion alone has brought more than $1 billion in federal funds to our state and supports more than 10,000 jobs in our communities.
The threat in Washington is real. Proposals to cut Medicaid by $880 billion over the next decade would have devastating consequences for Michigan. In just one year —2026— our state could lose $2.2 billion in federal funding, see $4.9 billion in lost economic activity and take a $2.9 billion hit to our state’s GDP. These aren’t just numbers — they represent fewer doctors and nurses, closed clinics and hospitals, and longer waits for care.
If these cuts happen, impossible choices must be made. Access to care would shrink, costs would shift onto state budgets and local providers, and coverage for seniors, children, veterans, people with disabilities and working families would be at risk.
The effects would ripple far beyond those who rely on Medicaid — every hospital, mental health clinic and nursing home that depends on Medicaid funding would feel the impact. When facilities close, it’s not just Medicaid patients who lose out — it’s everyone in the community, regardless of what kind of insurance they have.
That includes you. We simply cannot afford these losses.
To our leaders in Congress: we urge you to listen to the voices of Michigan’s families, health care workers and community organizations. Say no to any budget proposal that includes cuts to Medicaid. Protect Michigan families. Protect our healthcare system. Protect MI Care.
In light of extreme Medicaid fraud and accumulated financial chaos, "cuts" is the wrong word to describe the course corrections Medicaid desperately needs.
Bottom line: the money is not getting to the people who need it. The ones the program was designed for.
Much of this is speculative since there are many proposals and goals, but not actual bills, at the Federal level. Gov. Whitmer is attempting to drive the federal budgeting process by instilling panic in Medicaid recipients:
Whitmer releases key findings as DHHS preps final report on impacts of federal Medicaid cuts By: Kyle Davidson - May 7, 2025
Michigan Gov. Gretchen Whitmer highlighted the many ways Michiganders benefit from Medicaid while speaking out against looming cuts to funding for the program during an April 17, 2025 press conference in Royal Oak, Mich. | Kyle Davidson
After signing an executive directive in April requesting the Michigan Department of Health and Human Services examine how the state would be impacted by federal cuts to Medicaid, Michigan Gov. Gretchen Whitmer has released the department’s key findings, with the full report to follow in the coming days.
Among the impacts, according to the report, would be nearly three-quarters of a million Michigan residents losing coverage, coupled with the loss of billions of dollars for the state’s hospitals and nursing homes.
“Medicaid provides a lifeline to 2.6 million Michiganders, and the huge, proposed cuts will terminate coverage for our neighbors, family, and friends who need it most,” Whitmer said in a statement.
With U.S. House Republicans adopting their budget resolution on April 10, the chamber has instructed members of the House Energy and Commerce Committee, which oversees Medicaid, to cut at least $880 billion, as they seek to free up funding for President Donald Trump’s plan to extend his 2017 tax cuts. A number of Democratic leaders and health advocacy groups have warned that cuts to Medicaid funding or programs could bring significant harm to low-income individuals who rely on the program for healthcare coverage.
“More than 700,000 Michiganders including people fighting cancer, seniors in nursing homes, new moms, veterans, kids, and those living with disabilities could lose their health care,” said Whitmer. “Michiganders will suffer because these proposed cuts go too far, too fast, and everyone, including those not on Medicaid, will end up paying more for their insurance. Republicans in Congress cannot let this happen.”
The DHHS report examines the impact of four proposals floated by members of Congress, and their impacts on Michiganders.
As Medicaid is jointly funded by both the state and the federal government, the report found that if Congress reduces the federal match rates for the program, more than 700,000 Michiganders — roughly 30% of the state’s Medicaid beneficiaries— would lose their coverage due to a loss of $1.1 billion in annual funding.
Michigan’s Medicaid budget for fiscal year 2025 is about $27.8 billion with roughly 70% coming from the federal government.
Imposing work requirements for Medicaid recipients to keep their coverage would cost taxpayers an additional $75 million to $155 million per year to institute a reporting program to ensure recipients meet these conditions.
Limiting the use of taxes on health care providers — which states use to pay into their health system through payments for Medicaid services — would lead to a $2.3 billion decrease in payments to Michigan hospitals and a decreased upwards of $325 million in payments to nursing homes.
Plans to convert federal Medicaid funding into a block grant or a per-capita cap system, where the federal government will cover costs up to a pre-set amount, would result in the loss of $4.1 billion to $13.4 billion over the next decade.
“These cuts will impact health care services for all Michigan families – whether they have Medicaid or commercial insurance – and small town and rural communities are likely to be disproportionally affected,” DHHS Director Elizabeth Hertel said in a statement.
“Medicaid patients make up an average of 22% of hospital patient volume and the loss of funding under these proposals will cause rural hospital closures and loss of providers. Studies show a lack of access to health care can lead to higher mortality rates, worse health outcomes, increased health disparities and strain the state’s emergency care system,” Hertel said.
Whitmer’s office also stressed the importance of Medicaid in supporting Michigan’s health care industry, which has a $77 billion annual economic impact. The state’s Medicaid expansion, which took effect in 2014, created more than 30,000 jobs. Should Republicans pass cuts to Medicaid, Whitmer’s office said the state could lose out on half a billion dollars in annual Medicaid funding, threatening thousands of jobs.
Medicaid is supposed to be a health care program for the indigent, not a jobs program for the elites. Its transformation into a jobs program for the elites explains why it performs so poorly as a medical program for the indigent.
the report found that if Congress reduces the federal match rates for the program, more than 700,000 Michiganders — roughly 30% of the state’s Medicaid beneficiaries— would lose their coverage due to a loss of $1.1 billion in annual funding.
I wonder if it's really simply a matter of x funding lost = x number of participants out.
Other sources have pegged the number as 750,000 who would be off Medicaid rolls if federal reform passed.
Let's not forget the previous Forum posts about Medicaid funds being spent on illegal aliens. What are the odds that disqualification is a major factor in 700-750K going off Michigan Medicaid?
Public Comment on MDHHS Medicaid Health Plan Common Formulary
The Michigan Department of Health and Human Services (MDHHS) is soliciting comments from the public on the Michigan Medicaid Health Plan Common Formulary. The Common Formulary applies to pharmacy claims paid by Medicaid Managed Care Organizations – it will not apply to claims paid through Fee-for-Service.
The public may submit comments on the drugs included or not included on the Common Formulary, new drug products, prior authorization criteria, step therapy criteria and other topics related to drug coverage under the Common Formulary.
The comments will be reviewed by MDHHS and the Michigan Medicaid Health Plan Common Formulary Workgroup. The next drug classes to be reviewed by the Workgroup include Diabetes, GI, P & T Miscellaneous, Non-Drug Products & Metabolic. Changes may be made to the Common Formulary based on comments received. Comments will be solicited once per calendar quarter.
DOGE is finding massive fraud in Medicare and Medicaid, but savings from eliminating fraud are being ignored by the Democrats, the lying media, and Congressional Committee budget development.
The money shot: Savings derived from reducing fraud aren’t counted as savings by Congressional Budget Office, whose analysis of a bill is a crucial factor in whether legislation can be passed using the so-called budget-reconciliation process.
Crooks steal billions from Medicare and Medicaid. Can stopping fraud pay for Trump’s tax cuts? The federal government may lose more than $500 billion per year to fraud, per GAO estimates By Chris Matthews - May 10, 2025
President Donald Trump wants to make his 2017 tax cuts permanent and add new breaks for tipped earnings, Social Security payments, overtime work and car-loan interest — a wish list that comes with a potential $11 trillion price tag, according to the Committee for a Responsible Federal Budget.
Trump says he can cover the entire cost — without raising taxes or cutting benefits from major safety-net programs — simply by eliminating “waste, fraud and abuse.” Trump’s critics have called this wishful thinking, and have refuted claims of widespread fraud in programs like Social Security.
But in the case of Medicare and Medicaid, which together make up roughly a quarter of total federal spending, the fraud is real and substantial.
Where the money is
Billions are improperly paid out each year through the federal healthcare programs, and rooting out those losses could yield significant savings. But Republicans have yet to propose attacking fraud in Medicare and Medicaid as a means of paying for their massive tax-cut legislation.
The reason? Savings derived from reducing fraud aren’t counted as savings by Congressional Budget Office, whose analysis of a bill is a crucial factor in whether legislation can be passed using the so-called budget-reconciliation process.
Budget reconciliation enables Republicans to avoid the filibuster in the Senate and to pass legislation without any support from Democrats. It has increasingly been used by both parties to avoid bipartisan compromise, but creates perverse incentives and prevents Congress from addressing actual fraud in the system.
Investigators at the Department of Health and Human Services, which administers Medicare and Medicaid, told MarketWatch that a lack of manpower has prevented them from tracking down legitimate leads on healthcare fraud schemes that have proliferated in recent years, as criminals leverage stolen data to fraudulently bill the American government for services they don’t provide or that patients don’t need.
Medicare and Medicaid beneficiary information is often stolen and sold on the internet — but even with the advanced computer programs investigators use to track fraud, there simply aren’t enough of them to track down every lead.
The HHS investigator general’s budget is a meager $450 million, compared to the $1.7 trillion the federal government spent on health-insurance programs last year. Only some of that is directed toward preventing fraud in total healthcare spending, and that budget has stayed roughly flat for the past five years.
Accurate estimates of fraud are notoriously difficult to generate. But the Trump administration has promoted a recent study by the U.S. Government Accountability Office that suggested that the federal government loses between $233 billion and $521 billion annually to fraud.
If one assumes that fraud is evenly distributed throughout federal programs, this estimate suggests there could be as much as $125 billion lost to fraud through the nation’s health-insurance programs each year, given that 24% of the federal budget is spent on Medicare and Medicaid.
The CBO estimated in 2011 that every $1 in spending on healthcare fraud prevention would produce $1.50 in savings, and the Medicaid Fraud Control Units’ annual report for 2024 showed that it recovered $3.35 for every $1 spent.
Eliminating that fraud wouldn’t be nearly enough to pay for all of Trump’s tax proposals, but it would help.
The GOP’s hunt for savings
But because of Senate budget rules, Republicans have instead looked to save money by reducing the spending it sends to states to pay for Medicaid health insurance.
The GOP-controlled House Energy and Commerce Committee has been tasked with identifying $880 billion in savings over 10 years, the vast majority of which is expected to come in the form of Medicaid cuts. The committee plans to debate the measure on Tuesday.
To reach that goal, Republicans are considering deep, structural changes to how states finance Medicaid, all of which critics say will lead to states kicking some people off coverage to save money.
Some ideas including reducing payments to wealthier states like New York and California that typically elect Democrats in Senate and presidential elections, and shrinking the amount of Medicaid funding that states can draw from so-called provider taxes. These are taxes that states levy on healthcare companies, but which are then paid back to those companies in the form of Medicaid payments.
Critics have called this tactic a form of “money laundering” that shifts the burden of Medicaid funding even more onto the federal government.
Political resistance to these ideas is fierce, even among Republicans. The GOP owes its majority in the House of Representatives to lawmakers from blue states and can’t rely on those members to vote for provisions that would cut funding to their jurisdictions, while Senate moderates are wary of any plans that would significantly reduce Medicaid enrollment.
“No one has talked about cutting one benefit in Medicaid,” Republican House Speaker Mike Johnson of Louisiana told reporters in April. “We have a lot of fraud, waste and abuse in Medicaid.”
Spencer Perlman, director of healthcare policy research at Veda Partners, told MarketWatch that with thin Republican majorities in both the House and Senate, there will be little common ground to enact steep cuts.
“I don’t see an appetite for getting north of $500 billion in cuts,” Perlman said. He added that Republicans will likely agree to adding work requirements for able-bodied adults without children and rolling back regulations that President Joe Biden put in place making it more difficult for states to kick people off the program.
Democrats are eager to pounce on whatever reforms Republicans identify to save money.
“The reckless Republican budget will strip coverage and benefits from millions of everyday Americans in a scheme designed to justify massive tax breaks for their billionaire donors under the phony excuse of cutting waste, fraud and abuse,” Democratic House Minority Leader Hakeem Jeffries of New York said in a Wednesday statement.
Medicaid’s changing political calculus
Republican reluctance to enact deep cuts to the Medicaid program underscores the significant changes to the party over the past decade. During Trump’s first term, House Republicans voted to repeal the Medicaid expansion enacted under Obamacare, which the CBO said would have left 24 million Americans without healthcare.
“It used to be that Republicans looked at Medicaid and could plausibly claim that it served a Democratic constituency in urban areas,” Perlman said. “That’s just not true anymore. It’s very important in rural areas, too, and other Republican jurisdictions.”
The reluctance also shows how far Washington has drifted from a commitment to fiscal responsibility. President Barack Obama proposed reining in the use of provider taxes in his 2013 budget, and then-Vice President Biden reportedly called the practice a “scam.” But today, there doesn’t appear to be enough Republican votes to curb these taxes.
Brian Blase, president of the Paragon Health Institute and former special assistant to President Trump for economic policy, told MarketWatch that the best way to reduce fraud in the system is to incentivize states to take on more of the cost burden by reducing provider taxes.
“Hospitals are very powerful on Capitol Hill and they don’t want to give up these funding schemes,” Blase said, when asked why Republicans are reluctant to cut the program. “You’ve got a lack of seriousness about deficits in Congress.”
