May 07,2025

CBO: Republican Medicaid Proposals Cut Benefits and Kick People off Health Coverage

Analysis Shows All Savings from Republican Cuts Come from Benefit Cuts, Terminating Health Coverage, and Payment Cuts for Doctors, Hospitals, Nursing Homes, and Home Care Providers—Not “Waste, Fraud, and Abuse”

Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and House Energy and Commerce Ranking Member Frank Pallone Jr., D-N.J., today released a letter from the non-partisan, independent Congressional Budget Office (CBO) which analyzed several Republican proposals that would cut Medicaid.  CBO’s analysis shows that Republicans plan to cut Americans’ health benefits, kick them off of their health insurance, and slash payments to providers that are already struggling to keep their doors open.

“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. “Republicans continue to use smoke and mirrors to try to trick Americans into thinking they aren’t going to hurt anybody when they proceed with this reckless plan, but fighting reality is an uphill battle. The bottom line is that the Republican bill is going to cut health care for kids, seniors, Americans with disabilities and working families, and Democrats are going to fight to stop it.”

”This non-partisan Congressional Budget Office analysis confirms what we’ve been saying all along: Republicans' Medicaid proposals result in millions of people losing their health care,” Pallone said. “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. It’s time for Republicans to stop lying to the American people about what they’re plotting behind closed doors in order to give giant tax breaks to billionaires and big corporations.”

The letter asked CBO to estimate the impact of several proposals to cut Medicaid that have reportedly been discussed among Republicans for inclusion in their reconciliation bill, including imposing per capita caps on federal spending, reducing the federal match rate that applies to individuals eligible for Medicaid because of the Affordable Care Act (ACA) Medicaid expansion, limiting states’ ability to use provider taxes to pay the state share of Medicaid costs, and repealing federal rules that make it easier for people who are eligible for Medicaid to get and keep their health coverage—especially kids, people with disabilities, and low-income older Americans who rely on Medicare and Medicaid.

CBO finds that federal reductions in Medicaid spending will result in states responding by taking a combination of four actions:

  • Spend more themselves on Medicaid, by using a mix of tax increases and cuts to other programs, such as K-12 education and public safety.
  • Cutting payments to health care providers.
  • Cutting optional benefits, such as home-based care and mental health care.
  • Taking away health insurance from people who rely on Medicaid.

Republicans’ claims that their policies will just reduce so-called waste, fraud, and abuse or that people will not lose their benefits are simply untrue.

  • 100 percent of the savings from the policies that shift costs to states come from reducing payment rates to providers, limiting optional benefits, and kicking people off coverage, not eliminating waste fraud and abuse.
  • 100 percent of the savings from rescinding the eligibility and enrollment rules that are on Republicans’ chopping block come from kicking people off Medicaid.

Additional findings include:

  • Eliminating the ability of states to use provider taxes will result in 3.9 million Americans getting kicked off their health insurance.
  • Imposing per capita caps on people eligible for Medicaid through the Affordable Care Act Medicaid expansion will kick 1.5 million off their health insurance.
  • Cutting the Federal Medical Assistance Percentage (FMAP) for Medicaid expansion would result in 2.4 million people being kicked off their health insurance.
  • CBO expects that states would reduce enrollment by eliminating optional coverage categories, including Medicaid expansion, and by changing enrollment policies and procedures to make enrollment more challenging to navigate.
  • Repealing the Eligibility and Enrollment final rule would result in 2.3 million Americans losing Medicaid coverage—meaning 400,000 people will be uninsured including children and people with disabilities, and low-income seniors who retain only Medicare coverage see premium and co-pay increases and will be unable to access the care they need without the support of Medicaid.

The analysis from CBO can be found here. The letter from Wyden and Pallone to CBO can be found here. In a recent preliminary estimate, CBO reported that “red-tape requirements” would leave 2.5 million Americans uninsured.

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