Class War Looms: GOP’s Massive Medicaid Cuts Spark Democrat Warning!

Policy experts and Democratic legislators expressed deep concern this weekend after a document was leaked showing that House Republicans are planning significant reductions to Medicaid, a crucial program that supports around 80 million people in the U.S.

High on the list of “spending reform options” that House Republicans are evaluating to fund further tax reductions for the wealthy and big businesses are initiatives that would remove Medicaid coverage for millions of Americans, including children, the elderly, and disabled individuals.

A major alteration proposed in the leaked document, which was obtained by
Politico recently, is to change how Medicaid funding is structured to a “per-capita cap.” This would mean the federal government would allocate a set amount of funds to states for each enrolled person rather than covering a portion of each state’s total Medicaid expenses.

The document, reportedly from the House Budget Committee, indicates that this reform could lead to a reduction of as much as $918 billion over the next decade.

Edwin Park, a research professor at Georgetown University’s McCourt School of Public Policy’s Center for Children and Families, explained in a
blog post that this adjustment would “drastically alter Medicaid’s financial framework.”

According to Park, these funding caps are usually set below the projected rise in healthcare costs, resulting in significant federal spending cuts on Medicaid, which would only expand as time goes on. He added that these caps wouldn’t adjust for unexpected cost increases, such as those from a public health crisis or new expensive medical treatments, potentially enlarging the cuts more than initially expected.

“These reductions merely serve to finance Trump’s tax breaks for his billionaire pals and corporate allies.”

The Center on Budget and Policy Priorities, in an
analysis released last week, cautioned that federal funding cuts under a per-capita cap “would put excessive pressure on states and jeopardize millions of individuals’ access to necessary benefits and coverage.”

Moreover, the document calls for “Equalizing Medicaid Payments for Able Bodied Adults”—seen as a signal that the GOP intends to target the Medicaid expansion under the Affordable Care Act—and confirms plans to implement Medicaid work requirements, which have been problematic in states that have already tried them.

Park stated that work requirements—and the “burdensome bureaucracy” they involve—would intensify the damaging effects of the federal funding cuts.

“These proposals would strip coverage and access from tens of millions of low-income children, families, seniors, people with disabilities, and other adults dependent on Medicaid,” Park commented. “Additionally, as Medicaid represents the largest
source of federal funds to states—making up 56.1% of all federal contributions to state budgets in 2024—these substantial shifts in costs to states would also risk severe, harmful budget cuts to other state services, including K-12 education.”

The Republican document suggests up to $5.7 trillion in spending cuts over ten years—with $2.3 trillion coming from Medicaid—as then-President-elect Donald Trump advocates for a
comprehensive reconciliation bill that includes another series of tax cuts favoring the nation’s wealthiest.

Besides Medicaid reductions, the House GOP’s plan also includes cuts to Temporary Assistance for Needy Families and federal nutrition programs, the repeal of “major Biden health regulations,” and the elimination of renewable energy funding provided by the Inflation Reduction Act.

“These won’t reduce expenses for Americans,” Rep. Mike Levin (D-Calif.)
responded to the GOP plan. “These cuts will only fund Trump’s tax cuts for his billionaire associates and corporate interests.”

Sen. Ron Wyden (D-Ore.), the leading Democrat on the Senate Finance Committee, remarked that the leaked policy list indicates that “Republicans are preparing for a class war against ordinary American families.”

“This list sketches a blueprint for increasing child hunger, removing tens of millions from their health insurance, and dismissing hundreds of thousands of workers in the clean energy sector to provide tax giveaways to the rich,” Wyden stated. “It’s small comfort to Americans struggling to get by that their suffering enables a wealthy friend of Donald Trump to buy a larger yacht.”