The media was abuzz in early 2025 about the possibility of Medicaid discounts reducing federal spending significantly on the program. With nearly 72 million people covered by Medicaid, there is widespread concern about the type of potential discounts.
This article examines what can be cut, and the cuts that are likely to affect.
Why do we think it is likely that the medical aid discounts
Medicaid discounts make news due to the proposal of the Congress budget, which calls for a reduction in federal spending by hundreds of billions of dollars to pay the price of different tax cuts. Both Congress rooms approved a budget framework. In the end, they must agree on the details of the budget change, and we do not yet know how it will be revealed.
However, the budget framework approved by the House of Representatives and the Senate directs the Energy and Trade Committee, which is the House of Representatives Committee with a specialty on the Medicaid and Medicare programs and the children’s health insurance programs, to reduce the federal deficit by $880 billion over 10 years. According to the Congress Budget Office, cuts of this size should be targeted primarily at Medicaid.
What are the medical cuts that are considered?
So, what are the Medicaid discounts that Congress can make, and how can they affect registrants? Although we do not yet know what will be on the final budget bill, we have information from House Ways & Means (W & M) and budget committees, defining different discounts, along with potential savings.
Below is a look at five possible fields of Medicaid discounts:
1. Medical aid requirements
Limiting possible financing: About 100 billion dollars over a decade
Medicaid’s work requirements are not a new idea. Several states have received federal approval of work requirements under the first Trump administration, although most of them have never been implemented. Georgia, which has had work requirements in place since mid-2013 for some adults, is currently the only state that requires some registrants to work to qualify to get Medicaid.
If federal medical work requirements are carried out, the effect will depend on several factors, including:
- The extent to which work requirements are widely applied (for example, only on the expansion population, or for all adults under a certain age).
- What a population will be an exemption.
- The degree to which compliance can be automatically determined in exchange for the registrants to report their working hours.
The Robert Wood Johnson Foundation, which applies federal work requirements only, can expand Medicaid eligibility to lead to a loss of 46 million people from Medicaid eligibility.
2. Remove the floor on the Federal Medicaid Matching rate
Limiting possible financing: $ 387 billion over a decade
It may affect: 10 states and Washington, DC
Medicaid is jointly funded by the federal governments and state governments. In the states that have a decrease in the income of both Capita, the federal government pays a greater share of the total medical aid costs. But there is at least 50 % matching, and therefore the federal government always pays at least 50 % of the total Medicaid costs.
W&M Committee projects can be reduced by the Federal Medicaid financing by 387 billion dollars over the next decade. If a 50 % minimum is eliminated, allowing higher Capita income states to receive fewer federal financing for Medicaid. (If the floor is removed by 50 % and ends in some states with low federal match rates as a result, the federal government will spend less to finance the Medicaid programs for those states, which leads to savings for the federal government.)
This change will affect 10 cases: California, Colorado, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Washington, and Wyoming. The total registration in Medicaid is about 26.4 million, from 71.8 million people registered in Medicaid in the country.
If the rate of federal matching is reduced under this proposal, the states will have to determine how to calculate the lack of financing, which leads to benefit discounts or changes in the rules of eligibility.
In Washington, DC, Medicaid’s federal funding was legally determined by 70 %. The W&M menu and the Budget Committee call for changing this matter so that the financing rate is determined in the same way in the rest of the country, which will reduce it to 50 %. If a 50 % minimum is also eliminated, Colombia Province is likely to be subject to additional federal muddow financing discounts.
3. Reducing the rate of federal conformity to expand medical aid
Limiting possible financing: 561 billion dollars over a decade
The population is likely to be affected: 20 million people got coverage due to the expansion of medical aid
Under reasonable prices (ACA), the federal government pays 90 % of the cost of covering the expansion of Medicaid. This is much larger than the federal government’s share of the cost of covering the rest of the Medicaid population, which ranges from 50 % to approximately 77 %, depending on the state.
Home committees: You want to reduce the federal financing rate of Medicaid expansion residents so that it corresponds to the percentage of financing that applies to the rest of the Medicaid population in each state. This change can provide the federal government with up to $ 561 billion in the next decade.
In nine states, this will lead to an automatic end to expanding Medicaid, and in three other states, this will lead to an automatic review process that is likely to lead to coverage losses. The rest of the states will have to consider whether the expansion of Medicaid will remain financially possible while reducing federal financing.
Depending on how the rest of the states deal with a decrease in financing, up to 20 million Medicaid recipients may lose coverage due to the low federal financing to expand Medicaid.
4. Implementing caps for each inpower on federal financing
Limiting possible financing: Up to $ 900 billion over a decade
The population is likely to be affected: 72 million civilized registrants
The W&M Committee estimates that the maximum of each closer to the Federal Medicaid financing can provide the federal government with up to 900 billion over the next ten years.
Under the current rules, Medicaid’s federal funding depends on the federal government, which matches at least the amount spent by the states against the dollar, and in some states, up to $ 3 is provided in federal financing for each dollar spent by the state. This is an open match, with no limit to the amount of federal financing that the country can receive.
If Congress has converted the FBI to a maximum individual (both Enrollee), the federal government will provide a certain amount of money for each state based on a pre-specific formula, regardless of the actual costs of the states.
A recent analysis of the Urban Institute found that the states will witness significant discounts in the funding of Medicaid Federalism under the caps of Capita and “You should consider a set of policy options, including increasing taxes, transferring government spending away from education and other priorities, reducing the medicaid provider payment rate“The analysis also explains”If countries are not able to find additional revenues or sufficient savings … inevitably, there will be discounts in joining”
If it is possible to implement a cover for each of the country’s clips, this may affect the eligibility and benefits for all the 72 million Medicaid registered. Details differ from one state to another, depending on the approach that each state takes.
5. Biden administration rules are canceled
Lower expected financing: 285 billion dollars over a decade
All proposals discussed above require congressional conduct. However, the W&M Committee also noted that the Federal Medicaid funding could be reduced by up to 285 billion during the next decade by canceling some Biden administration rules. This can be done by federal agencies and will not require action in Congress.
Biden’s First Base is the base of access to home-based services and community (HCBS).
Other Biden Management Base is a two-part base that makes it easier for people eligible to get Medicaid to register in the program and renew their coverage.
Medicaid discounts will lead to low benefits and registration
According to the Institute of Economic Policy, the expansion of tax discounts will benefit primarily those who have the highest income, While Medicaid discounts will lead to the loss of the lowest income that loses interest and coverage. The effect of medical discounts will apply disproportionately to people of color and children.
Amid a reaction to the idea of medical discounts, Republican lawmakers noticed that their intention was to improve efficiency and management in the Medicaid program, but not to reduce interest or eligibility. However, the volume of federal financing discounts required to balance the budget of Congress requires changes such as those detailed above, which experts agree to decrease the benefits or fewer or both registered or both.
Based on historical experience, when the registration of people from Medicaid is canceled, the majority end up without coverage for at least some time after losing Medicaid.
So, if any discounts in the Medicaid field are implemented, it will be important to develop a strategy that reduces the number of people who are not insured.
