Night moves: Congress poised to strip close to $1T in Medicaid funding
Between moving up work requirements and cutting billions in federal funding, states and Medicaid beneficiaries are about to experience a jolt to the system.
It’s not looking good for Medicaid. The House passed its “one big, beautiful bill,” which now heads to the Senate. We’re sweating over some notable changes in the manager’s amendment, like modifying guidance for states to adopt work requirements as soon as Dec. 31 and expanding the prohibition on federal Medicaid funds for gender-affirming care for both minors and adults. What are you watching? Let us know in the comments or shoot us an email.
Medicaid Work Requirements: Dismantling Medicaid Expansion by Design
The House-passed budget bill (“House bill”) largely targets the Affordable Care Act (ACA) Medicaid expansion group and other expansion-like adults, including making stringent work requirements a new condition of initial and ongoing Medicaid eligibility. The House bill also establishes an accelerated timeline for states to implement Medicaid work requirements by Dec. 31, 2026.
The Congressional Budget Office (CBO) preliminarily estimates that the work requirements would generate $280 billion in federal savings from 2025 to 2034, driven by terminating people’s Medicaid coverage and access to health care. The latest CBO estimates do not take into account the accelerated implementation of work requirements and savings estimates are likely to increase when they do.
Building on CBO’s estimate and accounting for experience in states that have implemented work requirements, Manatt projects even greater savings: $487 billion in federal funds (and $537 billion all funds — i.e., in federal and state Medicaid funds) over 10 years due to upward of 5 million people losing Medicaid coverage. Manatt’s estimates take the accelerated implementation date into account but will be updated to address other more stringent requirements of the House-passed bill and are expected to increase.
Mass health coverage terminations for Medicaid expansion enrollees are inevitable, not because people aren’t working, but because exemptions and compliance are difficult to identify, manual processes are the status-quo, and reporting requirements will be hard for Medicaid enrollees to parse.
Keep reading at The 80 Million.
ICYMI: The House One Big Beautiful Bill Act: Re-running the National and 50-State Impacts
Early on May 22, after weeks of intra-party policy debates and a whirlwind week of committee meetings and White House trips, House Republicans passed their reconciliation legislation. The final vote tally was 215-214.
Leading up to passage, the House Budget Committee met late on May 18 to combine the House Energy and Commerce (E&C) Committee and other reconciliation proposals into a single reconciliation bill, called the One Big Beautiful Bill Act, and voted to advance the legislation in a party line vote of 17-16. On May 20, the Congressional Budget Office (CBO) released a preliminary estimate of the House Bill, including impacts on federal Medicaid funding. But, aside from a cursory footnote in its comprehensive analysis of the House Bill and various emails and charts shared as part of the E&C Committee’s mark up of Medicaid provision, it has not yet had the opportunity to offer detailed estimates of the impact on Medicaid enrollment.
Also on May 20, President Trump weighed in with House GOP holdouts who are calling for even deeper Medicaid cuts in the strongest possible (and widely reported) terms: “Don’t #*!@ around with Medicaid!” That’s as clear a warning as any to do no harm to Medicaid. Yet key Medicaid proposals in the House budget bill would do extreme harm to the people enrolled in Medicaid, to federal funding for states and for the health care delivery system that serves Medicaid enrollees.
The House Rules Committee met at 1 a.m. on May 21, and the committee meeting ran through the night and into the following afternoon. Around 9 p.m. on May 21, the House Rules Committee issued its manager’s amendment with final tweaks to the legislation. Less than 12 hours later, the House passed the legislation with precedent-setting cuts to the Medicaid program without a Congressional Budget Office (CBO) estimate of the bill’s total impact on spending or coverage.
For pre-reconciliation reading, check out last week’s The 80 Million.
California Gov. Gavin Newsom released an analysis that estimates up to 3.4 million Californians will lose coverage under the House reconciliation bill.
Connecticut Gov. Ned Lamont signed a declaration that enables the state’s General Assembly to adopt legislation appropriating the necessary money to keep Medicaid fully funded for the remainder of the 2025 fiscal year.
Iowa requested to extend its 1115 waiver for the Iowa Wellness Plan to continue providing coverage to the new adult group. The waiver extension also requests to continue demonstration elements including premiums, healthy behaviors, a waiver of non-emergency medical transportation, and a waiver of retroactive eligibility for certain enrollees.
The National Association of Medicaid Directors explores in a new article how gaps in mental health and substance use disorder coverage stems from the absence of a federally mandated benefit and workforce shortages, among other issues.
80 Million subscribers: Keep an eye out for our next Ask Manatt Anything webinar. We’re limiting seats, so watch this space to secure your spot.
In a county that backed Trump, people depend on Medicaid and are conflicted about cuts – NPR/KFF Health News
Bowser's budget would avoid tax hikes, move 25K DC residents off Medicaid – NBC4
For those facing addiction, Medicaid is a lifeline, not a luxury – Time
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