CBO: The GOP’s Medicaid cuts will drop millions of people

It was never about 'waste, fraud, and abuse.'

By Jeff Nesbit

The GOP-controlled House of Representatives is on the verge of a decision that could reshape the American healthcare landscape. Advocacy groups have tried to cast the effort as just a way to reduce fraud and abuse. Nothing could be further from the truth.

The House has already voted to cut $880 billion from the committee that oversees the wildly popular Medicaid program over the next decade. Now it needs to find a way to do so. GOP advocacy groups can try to frame the $880 billion Medicaid cuts as “fiscal responsibility” measures until they’re blue in the face; it doesn’t make it true.

A new, sober analysis by the nonpartisan Congressional Budget Office (CBO) paints a grim picture: Millions of the nation's most vulnerable citizens—families with low-incomes, children, seniors, and people with disabilities—stand to lose their health insurance.

This isn't just about numbers on a spreadsheet; it's about the tangible impact on human lives and the potential unraveling of a critical social safety net.

And, again, a reminder: These alarm bells about the GOP Medicaid cuts aren’t partisan fear-mongering. They're coming from the independent CBO.

"This analysis from the non-partisan, independent CBO is straightforward: the Republican plan for health care means benefit cuts and terminated health insurance for millions of Americans who count on Medicaid," Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) said.

The "Republicans' Medicaid proposals result in millions of people losing their health care," Rep. Frank Pallone Jr. (D-N.J.), the ranking Democrat on the House Energy and Commerce Committee, said. The GOP is cutting Medicaid simply so it can “give giant tax breaks to billionaires and big corporations.”

The CBO's detailed analysis, requested by Wyden and Pallone, examined several key Republican proposals. These include imposing per capita caps on federal Medicaid spending, reducing the federal matching rate for those eligible under the Affordable Care Act’s (ACA) Medicaid expansion, limiting states' ability to use provider taxes for their share of Medicaid costs, and repealing federal rules designed to simplify Medicaid enrollment and retention, particularly for children, people with disabilities, and low-income seniors.

Here's what the CBO projects states will face with significantly reduced federal funding. They all are unpalatable options for GOP and Democratic governors alike in red, blue and purple states:

• Increased state spending: States would have to divert funds from other essential services, such as K-12 education or public safety, or raise taxes.

• Provider payment cuts: Reimbursements to doctors, hospitals, nursing homes, and home care providers would likely be slashed, potentially leading to reduced access and even closures, especially in underserved areas.

• Benefit reductions: Optional yet crucial benefits, such as home-based care for seniors and people with disabilities, mental health services, and dental or vision care, could be on the chopping block.

• Enrollment reductions: Ultimately, states would likely have to disenroll eligible individuals, making it harder for people to get and keep the health care coverage they need.

The CBO report directly refutes the assertion that savings will come from eliminating "waste, fraud, and abuse." According to the analysis, 100 percent of the savings from policies that shift costs to states are derived from cutting provider payments, limiting benefits, or removing people from coverage. Similarly, 100 percent of the savings from repealing current eligibility and enrollment safeguards come directly from individuals losing their Medicaid coverage.

The CBO's projections are also crystal clear on the specific impact of these proposals, which are deeply troubling:

• Limit state provider taxes: This measure alone is projected to result in 3.9 million Americans losing their health insurance.

• Per capita caps on ACA expansion enrollees: An estimated 1.5 million people who gained coverage through Medicaid expansion would be kicked off their only insurance.

• Cutting federal match for Medicaid expansion: This would lead to 2.4 million individuals losing their health coverage.

• Repealing the Eligibility and Enrollment Final Rule: This rule streamlines processes and makes it easier for eligible individuals, including children, people with disabilities, and low-income seniors, to get and keep coverage. Its repeal would cause 2.3 million Americans to lose Medicaid. Of these, an estimated 600,000 would become completely uninsured, and many low-income seniors relying on Medicaid to cover Medicare premiums and co-pays would face significantly increased out-of-pocket costs, potentially rendering necessary care unaffordable.

• "Red-tape requirements": Beyond the specific proposals, a recent preliminary CBO estimate indicated that imposing burdensome "red-tape requirements" for Medicaid eligibility could leave an additional 2.5 million Americans uninsured. The Democratic staff report from the House Energy and Commerce Committee, titled "Red Tape Requirements: Republicans' Scheme to Take Health Care Away to Make the Rich Richer," further details how such bureaucratic hurdles are designed not to increase employment, as sometimes claimed, but to systematically disenroll eligible individuals, citing the case of Arkansas in which more than 18,000 people lost coverage within months of such requirements being implemented.

The proposed $880 billion cut to Medicaid is not a victimless budget-balancing exercise. It’s a policy choice with profound and far-reaching harmful consequences. The CBO's independent analysis provides clear evidence that these cuts would be achieved by reducing benefits, stripping coverage, and making it harder for already struggling healthcare providers to serve their communities.

As the House prepares to vote, the question looming over every single GOP member in the House is this: Does the pursuit of fiscal goals (again, money needed to pay for the millionaire tax cuts) justify the potential devastation to the health and financial stability of millions of Americans?

The voices of those who rely on Medicaid—the child receiving regular checkups, the senior in a nursing home, the worker walking an economic tightrope, the person with a disability needing in-home care—need to be heard.

The CBO has laid out the facts; the potential human cost is now undeniable. The promise of Medicaid as a foundational element of America's healthcare safety net hangs in the balance.

Jeff Nesbit was the assistant secretary of health for public affairs at HHS during the Biden administration.

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