Coverage concerns

Summary

Millions could lose health insurance

New analysis from the Congressional Budget Office found up to 2.4 million could lose health insurance if Republicans move forward with certain Medicaid cuts.

Hundreds of billions in savings

The cuts could lead to a reduction in the federal deficit ranging from $162 billion to $710 billion over the next decade.

Ping Pong policy

Republicans have gone back and forth on what they say they're considering. It's clear there are multiple options on the table and they have yet to make up their minds.

New analysis from the Congressional Budget Office found certain potential cuts to Medicaid could remove millions over the next decade. — Image credit: Supersizer

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Summary

Millions could lose health insurance

New analysis from the Congressional Budget Office found up to 2.4 million could lose health insurance if Republicans move forward with certain Medicaid cuts.

Hundreds of billions in savings

The cuts could lead to a reduction in the federal deficit ranging from $162 billion to $710 billion over the next decade.

Ping Pong policy

Republicans have gone back and forth on what they say they're considering. It's clear there are multiple options on the table and they have yet to make up their minds.

Full story

Up to 2.4 million Medicaid recipients could lose their health insurance coverage if Republicans move forward with cost saving measures currently under consideration, according to new analysis from the Congressional Budget Office (CBO). The estimates also show some of the options would save hundreds of billions in debt over the next decade.

The analysis was requested by Sen. Ron Wyden, D-Ore., and Rep. Frank Pallone, D-N.J., the ranking members of the Senate Finance Committee and House Energy and Commerce Committee.

CBO went through five options that could reduce the federal deficit over the next decade and included overall savings in addition to impact on enrollees.

Here are the findings of the analysis.

Option 1

The first option would alter the state-federal cost-sharing formula. This would reduce Affordable Care Act expansion cost sharing from the current 90% flat rate to anywhere between 50% and 77% to align with each state’s non-expansion reimbursement rate.

CBO estimates that it would reduce the federal deficit by $710 billion through 2034. It would also lead to 5.5 million no longer being enrolled in Medicaid, 2.4 million of whom would be without health insurance.

House Speaker Mike Johnson, R-La., told Punchbowl News that reducing the cost sharing is off the table, but said per capita caps, considered under options 2-4, are being discussed.

Option 2

This option would limit state taxes on health care providers.

States are allowed to tax medical providers to fund a portion of their Medicaid spending. The federal government returns those taxes to providers as long as they don’t exceed 6% of the provider’s net revenue that they receive from treating patients. This “hold harmless” arrangement allows states to fund their Medicaid programs with funding that’s paid back to the providers by the federal government. The second option would eliminate the 6% threshold, and states wouldn’t be able to collect taxes under that arrangement.

Option 3

The third option would cap federal spending on Medicaid. Currently, federal spending is “open ended” meaning that if a state increases benefits, the federal government automatically increases payments. This option would create a per-enrollee cap on federal spending.

Option 4

This option would also create a per-enrollee cap on federal spending, but only for those who get coverage under the Affordable Care Act’s expanded coverage.

CBO estimates that options 2-4 would all reduce federal spending, leading states to make up for the loss of resources by spending more themselves, reducing payments to providers and limiting benefits. Unlike options one and five however, CBO did not estimate how these options would reduce the federal deficit nor did it state an impact on enrollment.

Option 5

The final option would repeal two Biden administration rules meant to boost enrollment. The first rule made it easier to enroll in Medicare Savings Programs, and the second simplified the application and renewal process for Medicaid and the Children’s Health Insurance Program.

CBO estimates this option would reduce the deficit by $162 billion through 2034. CBO estimates 2.3 million people would no longer be enrolled in Medicaid during that period, 60% of whom would retain their Medicare coverage. Although they would face increased out-of-pocket costs.

Mathew Grisham (Digital Producer) and Snorre Wik (Photographer/Video Editor) contributed to this report.

Tags: Affordable Care Act, Donald Trump, health insurance, Medicaid, Mike Johnson, U.S. Congressional Budget Office

[Ray Bogan]

Up to 2.4 million Medicaid recipients could lose their health insurance coverage if Republicans move forward with cost saving measures currently under consideration, according to new analysis from the Congressional Budget Office. The estimates also show some of the options would save hundreds of billions in debt over the next decade.

The analysis was requested by Sen. Ron Wyden, D-Ore., and Rep. Frank Pallone, D-N.J., the ranking members of the Senate Finance Committee and House Energy and Commerce Committee.

CBO went through five options that could reduce the federal deficit over the next decade and included overall savings in addition to impact on enrollees.

Here’s what they found –

Option 1: Alter the state-federal cost sharing formula. This would reduce Affordable Care Act expansion cost sharing from the current 90% flat rate to anywhere between 50% and 77% to align with each state’s individual non-expansion reimbursement rate.

CBO estimates that would reduce the federal deficit by $710 billion through 2034. It would also lead to 5.5 million no longer being enrolled in Medicaid, 2.4 million of which would be without health insurance.

House Speaker Mike Johnson, R-La., told Punchbowl News reducing the cost sharing is off the table, but said per capita caps, considered under options 2-4 are being discussed.

Option 2: Limit state taxes on health care providers.
States are allowed to tax medical providers to fund a portion of their Medicaid spending. The federal government returns those taxes to providers as long as they don’t exceed 6% of provider’s net revenue that they receive from treating patients. This “hold harmless” arrangement allows states to fund their Medicaid programs with funding that’s paid back to the providers by the federal government.. This option would eliminate the 6% threshold, and states wouldn’t be able to collect taxes under that arrangement.
Option 3: Cap federal spending on Medicaid – currently federal spending is “open ended” meaning if a state increases benefits, the federal government automatically increases payments. This option would create a per-enrollee cap on federal spending.
Option 4: This option would also create a per-enrollee cap on federal spending, but only for those who get coverage under the Affordable Care Act’s expanded coverage.

CBO estimates options 2-4 would all reduce federal spending, leading states to make up for the loss of resources by spending more themselves, reducing payments to providers and limiting benefits. Unlike options one and five however, CBO did not estimate how these options would reduce the federal deficit nor state an impact on enrollment.

Option 5: Repeal two Biden Administration rules meant to boost enrollment. The first rule made it easier to enroll in Medicare Savings Programs, the second simplified the application and renewal process for Medicaid and the Children’s Health Insurance Program.

Why this story matters

Potential changes to Medicaid funding could result in millions losing health insurance coverage and substantial federal deficit reductions, affecting both health access and government budgets.

Federal deficit reduction

CBO estimates show that some of the considered changes, such as adjusting cost-sharing and repealing recent administrative rules, could save hundreds of billions of dollars over the next decade.

State and federal roles

The options reviewed explore changes in the cost-sharing partnership between states and the federal government, which could shift financial responsibility and influence how states fund and administer Medicaid.

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Context corner

Medicaid is a federal-state health insurance program for low-income Americans, expanded by the Affordable Care Act (ACA) in 2014. Historically, debates over Medicaid funding reflect broader conflicts over the role of federal government, state budgets and health care access.

Debunking

Republican leadership asserts that their plans target waste, fraud and abuse rather than cutting benefits. However, the CBO analysis disputes this, projecting that millions would lose coverage even under provisions like eligibility checks and work requirements, which are both under consideration.

Sources

Bias comparison

Media outlets on the left framed GOP Medicaid proposals with vivid urgency, portraying cuts as a direct assault on vulnerable populations by using charged phrases like “kick millions off” and “rip health care away,” emphasizing human costs and accusing Republicans of prioritizing wealthy tax breaks over health care.
Media outlets in the center adopted a cautious, explanatory stance, highlighting internal GOP divisions and political dynamics.
Not enough coverage from media outlets in the center to provide a bias comparison.
Media outlets on the right adopted a resolute, reform-oriented tone, casting Medicaid cuts as necessary “work requirements” and measures against “waste, fraud and abuse,” often painting opposition as exaggerated “fear mongering” and stressing fiscal responsibility.

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Media landscape

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Key points from the Left

House Republican plans to cut $880 billion from the federal budget could lead to millions of Americans losing health insurance, according to the Congressional Budget Office report.
The CBO estimates that as many as 8.6 million low-income Americans may lose their Medicaid coverage under the proposed budget cuts.
The report found that various GOP proposals would result in significant declines in Medicaid enrollment, affecting nearly 10 million individuals.
Democrats warn that these cuts would harm vulnerable populations and are calling on Americans to oppose the proposed changes.

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Key points from the Center

The nonpartisan Congressional Budget Office released a report Wednesday estimating millions could lose Medicaid coverage under GOP proposals.
Republican lawmakers circulated the proposals to fund $4.5 trillion in tax breaks by cutting $1.5 trillion from federal health, food stamp and other programs.
The report found Medicaid enrollment would decrease and uninsured numbers would rise, triggering resistance from centrist GOP members and uncertainty about passing the bill.
The CBO estimated that the proposed changes could lead to approximately 8 to 10 million individuals losing Medicaid coverage, and Rep. Frank Pallone emphasized that the Republicans’ Medicaid plan would cause health care loss for millions.

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Key points from the Right

Millions of Americans could lose Medicaid coverage under various proposals circulated by House Republicans, as estimated by the Congressional Budget Office in a report.
The CBO report indicated that Medicaid enrollment would decrease, resulting in an increase in the number of uninsured people.
Rep. Frank Pallone stated that the GOP Medicaid proposals would lead to millions losing access to health care, confirming CBO's findings.
House Republicans are facing resistance regarding Medicaid cuts as they consider tax breaks, according to a report from the Congressional Budget Office.

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