Millions of people would lose health insurance coverage under various Republican options to cut Medicaid spending to pay for President Trump’s domestic policy agenda, according to a new analysis the Congressional Budget Office (CBO) released Wednesday.
For instance, a cap Medicaid spending for beneficiaries in the expansion population would save $225 billion and result in 1.5 million additional people being uninsured by 2034.
Limiting state provider taxes would save $668 billion but would mean an additional 3.9 million uninsured people by 2034.
The analysis, requested by Rep. Frank Pallone Jr. (D-N.J.) and Sen. Ron Wyden (D-Ore.), shows the difficult tradeoffs facing Republicans as they try to pay for their party-line bill, which among other provisions would fund an extension of Trump’s 2017 tax cuts.
“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,” Wyden said in a statement.
Republicans have tasked the House Energy and Commerce Committee, which oversees Medicaid, to find $880 billion in savings as part of the overall goal of slashing at least $1.5 trillion.
A previous CBO analysis showed that number was not achievable over the next decade without cutting Medicaid.
CBO’s Wednesday report examined five of the Medicaid options Republicans have floated for the bill: eliminating the enhanced federal match for Medicaid expansion states, limiting state taxes on providers, capping federal Medicaid spending for the entire Medicaid population, capping spending for the expansion population only, and repealing a Biden-era Medicaid eligibility rule.
House Republican leaders have not settled on any final decisions, but Speaker Mike Johnson (R-La.) said late Tuesday ending the enhanced match was off the table, and per capita caps for the expansion population were also likely going to be excluded.
The report did not look at work requirements, which a 2023 CBO report found “community engagement” requirements for people aged 19-55 would save about $109 billion over a decade at a cost of 600,000 people becoming uninsured. It would also shift $65 billion in costs to states.
But the number of uninsured would likely be larger in practice; CBO assumed that states would pick up the costs of 60 percent of the beneficiaries who lose federal funding, but most experts think states would not spend their own money.
Similarly, CBO on Wednesday assumed states would replace about half the federal cuts, which would lead to reduced payments to providers, limiting benefits, cutting Medicaid enrollment or raising taxes and cutting programs like K-12 education and public safety.
“Trump has repeatedly claimed Republicans are not cutting health care, but CBO’s independent analysis confirms the proposals under consideration will result in catastrophic benefit cuts and people losing their health care,” Pallone said in a statement.
