House Republicans introduced legislation that would reduce Medicaid spending and alter eligibility rules as part of President Donald Trump’s broader tax and budget proposal. The bill aims to save at least $880 billion over a decade to offset an estimated $4.5 trillion in tax breaks.
What does the bill change about Medicaid?
Rather than restructuring Medicaid entirely, the bill imposes stricter eligibility criteria and cost-sharing rules to limit access. The bill requires “able-bodied” adults without dependents to meet 80 hours per month of work, school or volunteer activity to retain eligibility. It also calls for semiannual income verification checks and higher co-payments for certain enrollees.
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The federal poverty line for a single adult in 2025 is approximately $15,650.
The bill would require adults earning just above the poverty line to pay $35 per visit, with the annual cap set at 5% of their income. These cost-sharing requirements would apply nationwide.
The proposal also freezes provider tax rates that states use to draw down additional federal Medicaid funds, a move that critics warn could destabilize state budgets. Every state except Alaska currently levies these taxes.
How many people would lose coverage?
According to a preliminary estimate from the Congressional Budget Office (CBO) shared by Democrats on the House Energy and Commerce Committee, the legislation would result in 8.6 million fewer Americans having health insurance by 2034. The CBO’s analysis estimated that 2.3 million people, many of them low-income seniors and disabled individuals on Medicare, would lose Medicaid due to administrative hurdles.
How do the changes impact the Affordable Care Act?
In addition to Medicaid revisions, the bill targets the Affordable Care Act (ACA) provisions. It would shorten enrollment periods and limit automatic renewal options. It also restricts immigrants’ access to the Deferred Action for Childhood Arrivals (DACA) program and removes certain federal subsidies.
Based on early CBO estimates cited by committee Democrats, the Medicaid and ACA changes account for approximately $715 billion in savings over 10 years.
Are there social policy changes in the bill?
Yes. The legislation bars Medicaid funding for gender-affirming care for transgender minors. It also cuts off Medicaid reimbursements to organizations that provide abortion services, including Planned Parenthood, though federal law already prohibits direct abortion funding.
Additionally, the bill penalizes states that offer Medicaid-like coverage to undocumented immigrants. States that do so would receive a reduced federal match — 80% instead of the typical 90% — for coverage of all childless, non-disabled adults.
What is Trump’s position?
Trump has not detailed specific Medicaid provisions but has endorsed adding work requirements. Despite the proposed reductions, he has publicly insisted that he does not support cutting the program. The bill aligns with Trump’s broader plan to preserve and expand the 2017 tax cuts, many of which expire at the end of the year.
House Speaker Mike Johnson set a Memorial Day deadline to advance the legislation, requiring approval from both chambers of Congress.
How are lawmakers responding?
Democrats strongly oppose the bill. Rep. Frank Pallone, D-N.J., ranking Democrat on the Energy and Commerce Committee, said the proposal would strip health care from millions and increase financial pressure on seniors and hospitals.
“This is not trimming fat from around the edges, it’s cutting to the bone,” he said.
Some moderate Republicans have expressed reservations about Medicaid reductions, and GOP leaders must balance fiscal conservatives’ demands with political realities in states where Medicaid enrollment remains high.
The Energy and Commerce Committee is scheduled to begin formal debate this week.
