The proposed cuts to Medicaid in 2025 involve significant reductions in federal spending, totaling nearly $1 trillion over the next decade under the federal budget reconciliation law known as the "One Big Beautiful Bill" (OBBB). Key details of these Medicaid cuts include:
- The Medicaid cuts are expected to cause almost 11.8 million Americans to lose their health insurance coverage.
- The Congressional Budget Office (CBO) estimates that the Medicaid program will face cuts of approximately $900 billion to $1 trillion over ten years.
- One major element driving the savings is the implementation of Medicaid work requirements, which require states to verify enrollees' monthly work status and enforce exemptions. This provision alone is estimated to reduce Medicaid spending by $326 billion over ten years and will lead to significant coverage losses.
- The proposed work requirements are projected to cause millions of Medicaid enrollees to become uninsured, with the CBO estimating that by 2034, 4.8 million adults will lose Medicaid coverage due to these rules.
- The bill would also reduce federal Medicaid expansion funding, impacting states that expanded Medicaid under the Affordable Care Act.
- There are proposals affecting Medicaid coverage for undocumented immigrants, potentially reducing federal contributions for states that cover this population from their own funds.
- Cuts to Medicaid provider taxes, which states use to boost hospital and provider payments, are expected to total around $400 billion, threatening the financial stability of rural hospitals and healthcare providers.
- These Medicaid cuts are accompanied by cuts to ACA marketplace subsidies, potentially leading to a rise of 17 million uninsured Americans by 2034 when combined with Medicaid cuts and other provisions.
- The cuts will likely shift costs to states, forcing them to reduce enrollment, benefits, or provider payments or increase state taxes to compensate.
Overall, the proposed Medicaid cuts encompass a mix of enrollment restrictions, work requirements, reduced federal funding to states, and cuts to provider payment mechanisms, all aimed at significantly reducing federal Medicaid expenditures but with serious implications for healthcare access and coverage for millions of vulnerable Americans. These cuts are considered by experts as the largest and most regressive health benefit reductions seen in the U.S.
