May 12, 2025 - Modern Healthcare
Michael McAuliff
House Republicans are set to move ahead with legislation that would take more than $700 billion out of federal health programs, chiefly from Medicaid.
The healthcare spending reductions are part of a broader package that mainly seeks to extend or revive tax cuts President Donald Trump enacted in the Tax Cuts and Jobs Act of 2017. To partially offset the budgetary effects of decreased federal revenue, the GOP proposes a number of policies that would result in lower Medicaid enrollment, especially among adults without disabilities who qualify under the Affordable Care Act of 2010.
The House Energy and Commerce Committee is scheduled to begin debating the healthcare provisions in measure while the House Ways and Means Committee is slated to take on the tax components Tuesday. House Speaker Mike Johnson (R-La.) targeted Memorial Day as a deadline to complete work on the sweeping bill, but that timeline is uncertain.
Although the Medicaid cuts are scaled back from earlier proposals, they still represent a significant pullback in federal support for the program and are likely to result in millions of people losing benefits. Healthcare providers and others in the sector oppose severe Medicaid cuts, citing the financial effects of unpaid medical bills from newly uninsured patients.
According to a preliminary analysis from the nonpartisan Congressional Budget Office, the measure would reduce federal spending by $715 billion and cause 8.6 million people to lose health coverage over 10 years. That would be in addition to the 5.1 million people the CBO projects would become uninsured if Congress and Trump choose not to renew the enhanced exchange subsidies due to expire at the end of the year.
"Republicans have backed off some of the most politically contentious Medicaid proposals, but their plan would still blow big holes in state budgets and lead to millions more people without health insurance," said Larry Levitt, executive vice president of health policy at the healthcare research institution KFF.
Key planks include the creation of work requirements for "able-bodied" adults, stricter and more frequent eligibility reviews, and limits on states ability to use provider taxes to finance their portion of Medicaid expenses. The bill also would subject Medicaid expansion enrollees who earn 100%-133% of the federal poverty level — or $15,650-$20,815 for a single person — to cost-sharing for medical care and products.
"The magnitude of the proposals contained in the Energy and Commerce reconciliation text represents a devastating blow to the health and well-being of our nation’s most vulnerable citizens and communities," American Hospital Association President and CEO Rick Pollack said in a news release Monday. "These proposed cuts will not make the Medicaid program work better for the 72 million Americans who rely on it. Instead, it will lead to millions of hardworking Americans losing access to healthcare and many of our nation’s hospitals struggling to maintain services and stay open for their communities."
Federation of American Hospitals President and CEO Chip Kahn said, "It is imperative Republicans go back to the drawing board; too many lives depend on it" in a news release Monday. "The consequences of these cuts extend far beyond the millions of Medicaid patients impacted directly; they threaten health access for entire communities across the country." The federation represents investor-owned health systems.
America's Essential Hospitals, which represents safety-net providers, offered a similar assessment. "We urge lawmakers to reconsider this dangerous path. Cutting Medicaid to pay for tax breaks is not fiscal responsibility — it is a direct assault on our nation’s healthcare system," Dr. Bruce Siegel, the association's president and CEO, said in a news release Monday. "This bill does nothing to improve healthcare or access to services for Americans and will instead leave tens of millions without any coverage at all."
The legislation would delay $8 billion in cuts to Medicaid disproportionate share hospital payments to hospitals that treat large numbers of low-income patients until 2029. States would be required to conduct monthly reviews of Medicaid providers to remove any whom the Health and Human Services Department or another state had previously terminated from the program.
The bill additionally includes new transparency rules for pharmacy benefit managers and would limit their ability to employ so-called spread pricing by charging customers more for medicines than the prices they negotiate with drugmakers. And the House GOP aims to repeal a Centers for Medicare and Medicaid Services regulation that set staffing minimums for nursing homes, which a federal court struck down last month.
The measure aims to require stronger eligibility and income verification for health insurance exchange enrollees and limiting special enrollment periods for people to sign up outside the annual open enrollment period.
House Republicans also propose to address a cut in Medicare physician payments that took effect in January. This part of the bill would raise reimbursements next year, a congressional aide said.
The bulk of the budget savings would come from Medicaid work requirements, the CBO estimates. Under the bill, most adults aged 19-64 without disabilities or dependents would be required to report at least 80 hours of work, community service or other qualifying activities per month to retain coverage.
The House GOP also seeks to block efforts by California and other states to enroll undocumented immigrants in Medicaid at state expense. Medicaid and the Children's Health Insurance Program would be barred from covering gender-affirming care. Providers that offer abortion care would be excluded from Medicaid in a provision that appears to target the Planned Parenthood Federation of America.
Republicans also take aim at state provider taxes. The legislation would forbid any new taxes, set caps on state-directed payments to providers subject to these taxes and create a higher bar for whether provider taxes adhere to federal law.
"The ill-conceived policies target states and tie their hands, leaving them unable to pick up the slack and effectively cutting patients' Medicaid coverage based on their ZIP codes," Kahn said.
Energy and Commerce Committee Chair Brett Guthrie (R-Ky.) preemptively defended the legislation in an op-ed the Wall Street Journal published Sunday.
"Undoubtedly, Democrats will use this as an opportunity to engage in fear-mongering and misrepresent our bill as an attack on Medicaid," Guthrie wrote. "In reality, it preserves and strengthens Medicaid for children, mothers, people with disabilities and the elderly — for whom the program was designed."
Energy and Commerce Committee ranking member Frank Pallone (D-N.J.) hammered the bill.
“This is not trimming fat from around the edges, it’s cutting to the bone," Pallone said in a news release Sunday. "The overwhelming majority of the savings in this bill will come from taking healthcare away from millions of Americans. Nowhere in the bill are they cutting ‘waste, fraud, and abuse’ — they’re cutting people’s healthcare and using that money to give tax breaks to billionaires."
Bridget Early contributed to this story.