The House GOP has released its plan to cut Medicaid spending, with the most significant changes affecting eligibility requirements and how states can finance Medicaid. However, some of the biggest sticking points were left out of the bill, including changes to per-capita caps on federal Medicaid payments to states.
“Undoubtedly, Democrats will use this as an opportunity to engage in fear-mongering and misrepresent our bill as an attack on Medicaid,” House and Energy Commerce Committee Chairman Brett Guthrie (R-KY) wrote in the Wall Street Journal. “In reality, it preserves and strengthens Medicaid for children, mothers, people with disabilities and the elderly — for whom the program was designed.”
President Donald Trump and House Republicans hope to cut $4.5 trillion in government spending to help finance tax cuts. The Energy and Commerce Committee has been tasked with finding $880 million in savings, with many of those cuts expected to come from Medicaid changes. This has worried some centrist Republicans, who sent a letter to Speaker Mike Johnson (R-LA) last week about their concerns over Medicaid cuts. The bill released Sunday night avoids the most touchy issues for blue-state Republicans, with Guthrie billing it as a “common sense” solution.
The plan would institute work requirements for able-bodied people on Medicaid. Recipients between 19 and 64, with exceptions for pregnant women and those on disability, would be required to work 80 hours per month to receive benefits. Currently, there is no federal work requirement, though Georgia has a state mandate.
Recipients must also verify they are eligible for Medicaid twice a year. They are currently required to verify only once a year. Critics have warned that this could pose a challenge for those who live far from Medicaid offices. If they cannot verify their status in time, they could lose their benefits. However, Republicans said recipients who can prove they are meeting the work requirements are guaranteed coverage.
Democrats immediately requested a report from the nonpartisan Congressional Budget Office, which found that 8.6 million beneficiaries could lose coverage in the next decade under the House GOP’s plan.
The plan would also change how states and the federal government contribute to Medicaid. As of 2023, the federal government paid about 70% of the total costs of Medicaid. The GOP’s markup will freeze provider taxes, which are the nonfederal portion of Medicaid funding that states pull in from healthcare provider taxes. A congressional report from December 2024 identified pausing or ending states’ use of provider funds as a way to cut federal costs, and Republicans have sold it as a way to cut down on abuse.
Even top Democrats, such as former President Barack Obama, have gone after states’ reliance on provider taxes. States are only allowed to levy 6% of a provider’s income, taxing both those on and off Medicaid. However, Republicans did not seek to peel back provider taxes already put in place.
The federal government will also require states to verify citizenship or visa status for Medicaid recipients. States that fail to do so will be barred from receiving federal Medicaid dollars. In New York, it was reported that 480,000 illegal immigrants were enrolled in “emergency Medicaid” in 2024.
Planned Parenthood, the largest abortion provider in the United States that also provides general women’s healthcare, will see cuts to the amount of federal funding it receives. The GOP is seeking to bar federal dollars from being used for gender-related treatment and surgeries.
However, Republicans decided to leave off the implementation of per-capita caps on Medicaid payments to states. This was posed as a possibility for the federal government to cut spending, but some Republican members were wary of it. If implemented, a per-capita cap would set a federal limit per beneficiary instead of how it currently stands, in which the government pays a fixed share, but it’s an open-ended entitlement.
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While Guthrie and House Republicans seek to strike a balanced deal, Rep. Frank Pallone (D-NJ), the ranking member on the Energy and Commerce Committee, called the Republicans’ plan “shameful,” saying it will cause hospitals to close.
“In no uncertain terms, millions of Americans will lose their healthcare coverage,” Pallone said. “Seniors will not be able to access the care they need, and premiums will rise for millions of people if this bill passes.”