Now, Trump’s big budget bill might require particularly painful cuts in the South.
For months, Republicans have been trying to figure out how to reduce Medicaid spending to help enact President Trump’s domestic agenda. But their list of possible cuts is shrinking.
House Speaker Mike Johnson said Tuesday that major cuts to the Affordable Care Act’s Medicaid expansion were off the table. Now, the largest cut left among their whittled-down options would disproportionately hurt states that supported Mr. Trump in the 2024 election.
Republicans have also been studying several other Medicaid changes for their budget bill, and a final package will probably include some of the smaller adjustments. But they have considered only two major policy pathways that can deliver the bulk of the $880 billion in spending cuts that the House committee overseeing Medicaid has been charged with finding.
One policy would significantly dial back funding for the Obamacare Medicaid expansion, which the Congressional Budget Office estimated Wednesday would save $710 billion over a decade. Some of the deepest cuts would be felt by rich, Democratic-led states. This was the option Mr. Johnson ruled out for now after meeting with moderate Republican members this week.
The remaining big cut on the table, limiting the way states use a tax loophole to increase federal spending on Medicaid, would save $668 billion, mostly by reducing Medicaid spending in poorer, Southern states.
Whichever states get hit hardest would face big budget shortfalls, and to compensate some could drop Medicaid’s health insurance coverage for some of their lower-income adults, cut hospital payments, or cut other government priorities.
Thirteen states could lose more funding if Congress cuts the Obamacare expansion instead of provider taxes.
Thirty-seven states (and D.C.) could lose more funding if Congress cuts provider taxes instead of the Obamacare expansion.
