Category Archives: Medicaid Cuts

How the GOP could dial back Obamacare

Posted on by • Posted in ACA, Health Insurance Coverage Adequacy, Health Policy, Healthcare Reform, Medicaid, Medicaid Cuts, Underinsured, Uninsured • Leave a comment
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The massive Republican budget bill working its way through Congress has mostly drawn attention for its tax cuts and Medicaid changes.

  • But it would also take steps to significantly roll back coverage under the Affordable Care Act, with echoes of the 2017 repeal-replace debate.

Why it matters: 

The bill that passed the House before Memorial Day includes an overhaul of ACA marketplaces that would result in coverage losses for millions of Americans and savings to help cover the cost of extending President Trump’s tax cuts, Peter Sullivan wrote first on Pro.

  • It comes after a growth spurt that saw ACA marketplace enrollment reach new highs, with more than 24 million people enrolling for 2025, according to KFF. The House’s changes would likely reverse that trend, unless the Senate goes in a different direction when it picks up the bill next week.

Driving the news: 

The changes are not as sweeping as the 2017 effort at repealing the law, but many of them erect barriers to enrollment that supporters say are aimed at fighting fraud.

  • Brian Blase, president of Paragon Health Institute and a health official in Trump’s first administration, said Republicans are focusing on rolling back Biden-era expansions “that have led to massive fraud and inefficiency.”
  • The Congressional Budget Office estimates the ACA marketplace-related provisions would lead to about 3 million more people becoming uninsured.
  • Cynthia Cox, a vice president at KFF, said while the changes “sound very technical” in nature, taken together “the implications are that it will be much harder for people to sign up for ACA marketplace plans.”

What’s inside: 

The bill would end automatic reenrollment in ACA plans for people getting subsidies, instead requiring them to proactively reenroll and resubmit information about their incomes for verification.

  • It would also prevent enrollees from provisionally receiving ACA subsidies in instances where extra eligibility checks are needed, which can take months.
  • If people wound up making more income than they had estimated for a given year, the bill removes the cap on the amount of ACA subsidies they would have to repay to the government.
  • Some legal immigrants would also be cut off from ACA subsidies, including people granted asylum and those in their five-year waiting period to be eligible for Medicaid.

What they’re saying: 

In a letter to Congress, patient groups pointed to the various barriers as “unprecedented and onerous requirements to access health coverage” that would have “a devastating impact on people’s ability to access and afford private insurance coverage.”

  • The letter was signed by groups including the American Cancer Society Cancer Action Network, American Diabetes Association and American Lung Association.

Between the lines: 

A last-minute addition to the bill would also make a technical but important change that increases government payments to insurers in ACA marketplaces.

  • That would have the effect of reducing the subsidies that help people afford premiums and save the government money, by reducing the benchmark silver premiums that are used to set the subsidy amounts.
  • Democrats are concerned that if Congress also allows enhanced ACA subsidies to expire at the end of this year, the combined effect would be even higher premium increases for enrollees next year.

Insurers that already are planning their premium rates for next year say the Republican funding changes are throwing uncertainty into the mix.

  • “Disruption in the individual market could also result in much higher premiums,” the trade group AHIP warned in a statement on the bill.

The big picture: 

Blase said changes like ending automatic reenrollment are needed to increase checks that ensure people are not claiming higher subsidies than they’re entitled to.

  • Cox said another way to address fraud would be to target shady insurance brokers, rather than enrollees themselves. She estimated that marketplace enrollment could fall by roughly one-third from all the changes together.
  • “The justification for many of these provisions is to address fraud,” she said. “The question is, how many people who are legitimately signed up are going to get lost in that process?”

They Cut Medicaid, Not the Waste: Congress Protects Big Insurance While Slashing Care

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Healthcare Reform, Lobbyist, Medicaid, Medicaid Cuts, Medicare, Medicare Advantage, MedPAC, Political Action Committees (PAC), Political Lobbying, Pre-Authorization, Profit, Profit Margin, Profit Motive, Super PAC, Upcoding • Leave a comment
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The House of Representatives’ reconciliation bill, passed by the powerful Energy and Commerce Committee today, cuts just about everything when it comes to health care – except the actual waste, fraud and abuse. Now the bill heads to the floor for a vote of the full House of Representatives before it must also be passed by the Senate to become law. 

I know what you’re thinking: not another story about Medicaid. With the flood of articles detailing the devastating Medicaid cuts proposed by House Republicans —cuts that could strip 8.7 million people of their health coverage — there’s an important fact being overlooked: Members of Congress chose to sidestep policies aimed at reining in Big Insurance abuses and, instead, opted to cut Medicaid.

And the real irony of it all is they could have saved a ton of money if they would just address the elephant in the room. 

Abuses by Big Insurance companies have been going on for decades but have only recently come under scrutiny. Insurance companies figured out how to take advantage of the structure of the Medicare Advantage program to receive higher payments from the government.

They do this in two ways:

  1. They make their enrollees seem sicker than they are through a strategy called “upcoding” and;
  2. They use care obstacles such as prior authorization and inadequate provider networks that eventually drive sicker people to drop their plans and leave them with healthier enrollees, referred to as “favorable selection.” 

According to the Medicare Payment Advisory Commission (MedPAC) these tactics lead the government to overpay insurance corporations running MA plans by $84 billion a year. This number is expected to grow, and estimates show that overpayments will cost the government more than a $1 trillion from 2025-2034. That is $1 trillion dollars in potential savings Republicans could have included in their bill instead of cutting Medicaid spending that provides care for vulnerable communities. 

These overpayments do not lead to better care in MA plans; in fact, research has shown that care quality and outcomes are often worse in MA compared to traditional Medicare. Even worse, these overpayments are tax dollars meant for health care that end up in the pockets of shareholders of big insurance corporations, which spend billions of taxpayer dollars on things like stock buybacks and executive bonuses. 

One of the most frustrating parts of the lawmaker’s choice to target Medicaid rather than Big Insurance abuses is that there are multiple policies supported by both Republicans and Democrats to stop these abuses. Sen. Bill Cassidy (R-Louisiana), along with Sen. Jeff Merkley (D-Oregon), have introduced the NO UPCODE Act, which would cut down on the practice of upcoding explained above. President Trump’s Administrator of the Centers for Medicare and Medicaid Services, Dr. Mehmet Oz, said during his confirmation hearing that he supports efforts to crack down on practices used by insurers to upcode. And Rep. Mark Green (R-Tennessee) introduced a bipartisan bill to decrease improper prior authorization denials in MA. 

In a somewhat cruel twist, the only mention of Medicare fraud in the Republican reconciliation bill proposals is a section claiming to crack down on improper payments in Medicare Parts A and B (which make up traditional Medicare) by using artificial intelligence.

The total improper payments in TM represent just over one-third of the overpayments going to MA plans each year, and many of the payments flagged as improper in TM are flagged due to missing documentation rather than questionable tactics that MA insurers use. 

In reflecting on why Republicans in Congress ignored potential savings from Big Insurance reforms and instead pursued cuts to care for people depending on Medicaid, which do not save as much, my biggest question was, why?

Why would lawmakers swerve around a populist policy right in front of them to stop Big Insurance from profiting off of the federal government to instead propose a regressive policy that targets millions of working Americans and leaves health insurance corporations that make billions in profits each year untouched?

Unfortunately, the answer likely lies in money. Although people enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) make up roughly one-third of the U.S. population, they account for just 0.5% of all political campaign contributions — about $60 million annually. This disparity is likely driven by financial constraints: Many of these individuals are rightly focused on covering basic needs such as housing, food, and childcare, especially as wages have not kept pace with the rising cost of living.

In contrast, the health care sector — which includes major players like big insurance, pharmaceutical and hospital companies—contributed $357 million during the 2020 election cycle, including $97 million to outside groups such as Super PACs. These outside spending groups are largely funded by corporations and wealthy individuals, who represent less than 1% of the population but wield significant political influence.

Super PACs spent more than $2 billion during the 2020 election cycle, amplifying the voices of industry-aligned donors. This stark imbalance in political spending may help explain why congressional proposals targeted Medicaid recipients while leaving the powerful health insurance industry largely untouched.

It is not only Republicans who have failed to stop Big Insurance from taking advantage of federal health programs, Democrats declined to take action when negotiating their health care legislation during President Biden’s term. Rather, it seems to be a failure of policymakers of both parties to pass legislation that makes it clear to Big Insurance that our health care is not an investment opportunity for Wall Street, and the dollars we pay in taxes to support Medicare are not pocket change for executives to use for stock buybacks.

The failure to include MA reform represents a missed opportunity to prioritize patient care over corporate profits. However, the growing strength and voices of patients across the nation will ultimately make it impossible for lawmakers to ignore this issue much longer. With continued momentum, the fight to put patients over Big Insurance profits will succeed.

Medicaid provider taxes throw off sparks

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Medicaid, Medicaid Cuts, Medicaid Provider Taxes • Leave a comment
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Congress and the Trump administration are trying to limit how much states can tax hospitals, nursing homes and other providers to help cover the cost of their Medicaid programs.

  • That could tie governors’ and legislatures’ hands at a critical moment.

Why it matters: 

The taxes have been a friction point for decades, but they’re deeply ingrained in the safety net program. Every state except Alaska levies at least one type of provider tax to help cover the non-federal part of Medicaid spending.

How it works: 

States typically cover about 30% of Medicaid costs annually and use general funds along with taxes on hospitals, nursing homes and even managed care organizations. The more they collect, the more they receive in federal matching funds.

  • That’s key in the current debate over federal Medicaid spending, with projections showing that limiting provider taxes could reduce federal outlays by hundreds of billions over a decade.

The stakes are particularly high for red states. Mississippi, South Carolina, Utah and Alabama would all lose more than one-third of their federal Medicaid funding without the ability to levy provider taxes.

State of play: 

The House Energy and Commerce Committee on Wednesday advanced a sweeping overhaul of Medicaid that would prevent states from establishing new provider taxes and freeze those taxes already on the books at their current rates.

  • Democrats unsuccessfully fought the move during a marathon 26-hour markup. But the committee ultimately advanced the restrictions and the rest of the legislation along party lines.
  • The Congressional Budget Office estimated the restrictions would save about $87 billion through 2034.

Meanwhile, the Trump administration this week proposed additional restrictions on how states can structure their provider taxes. Seven states currently have waivers for provider taxes that would have to be restructured under the new policy, mostly for taxes on insurers.

  • That proposal alone, which mirrors another provision in the House reconciliation bill, would reduce federal Medicaid spending by $33 billion over five years, CMS estimates.
  • “Every state is going to have a really different situation in front of them,” said Morgan Craven, a director in ATI Advisory’s state program and policy practice.
  • “Because it’s been such a part of the fabric of how so many states finance and deliver care, undoing that is going to be really complex, and states will need time and will need a really strategic lens for how they can sustainably undo these policies,” she added.

Zoom out: 

Hospitals and patient advocates are concerned about the effects of such a foundational change in Medicaid financing.

  • “By freezing the taxes, the proposal ignores circumstances that drive increased health care costs including inflation, increased labor and drug costs, increased utilization and increased population demand for service,” the American Hospital Association wrote in a statement to the Energy and Commerce Committee this week.

Yes, but: Hospital stocks actually gained, on the premise that the House’s Medicaid changes could have been more onerous, per the Wall Street Journal.

  • And the CMS proposal suggested that the Trump administration won’t further try to dock provider taxes outside of congressional efforts — good news for hospital investors, Capstone senior vice president Wylie Butler wrote in an analyst note.

What to watch: 

There are some signs that Senate Republicans aren’t as interested in cracking down on provider taxes as their counterparts in the House.

  • “It’s not that I think that provider taxes are good; it’s that the Medicaid reimbursements have been insufficient,” Sen. Susan Collins (R-Maine) told reporters this week.
  • “Our rural hospitals in my state and across the country are really teetering.”

Millions could lose coverage under potential GOP Medicaid policies: CBO

Posted on by • Posted in Congressional Budget Office (CBO), Health Insurance Coverage Adequacy, Health Policy, Medicaid, Medicaid Cuts, Medicaid Disenrollment, Medicaid Eligibility, Preexisting Conditions, Terminated Health Insurance, Underinsured, Uninsured • Leave a comment

https://www.healthcaredive.com/news/medicaid-coverage-losses-gop-policies-cbo/747615/

Dive Brief:

  • Millions of people could lose coverage under potential policy changes to Medicaid under consideration by Republicans in Congress, according to a letter sent to lawmakers this week from the Congressional Budget Office. 
  • One option, reducing the federal government’s share of costs for enrollees covered under Medicaid expansion, would reduce the federal deficit by $710 billion over the next decade. But in 2034, 5.5 million people would be removed from the safety-net program, with 2.4 million of these enrollees becoming uninsured, according to the CBO.
  • Another potential policy, placing a per-enrollee cap on federal spending, would remove 5.8 million people from Medicaid. Nearly 3 million of those people would lose coverage entirely. The policy would reduce the deficit by $682 billion, the analysis found.

Dive Insight: 

Debates surrounding potential cuts to Medicaid — and their implications for patients and providers — have been heating up in Congress for weeks. 

Last month, lawmakers approved a budget resolution that called for the House Energy and Commerce Committee, which oversees Medicare and Medicaid, to find $880 billion in savings. That budget goal is likely impossible to hit without targeting major healthcare programs under the committee’s purview, according to an earlier analysis published in March by the CBO.

The committee is expected to meet next week to mark up its portion of the reconciliation package and hash out legislation.

However, cutting Medicaid is a politically contentious move for Republican lawmakers. Some legislators have pushed back on potential cuts, and others have argued they’ll preserve Medicaid for the most vulnerable by targeting fraud, waste and abuse in the safety-net insurance program. 

But Rep. Frank Pallone Jr., D-N.J., and Sen. Ron Wyden, D-Ore., who requested the latest CBO analysis, said the policies will ultimately limit benefits and result in coverage losses.

“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 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 letter from the CBO analyzes five potential policy options for Medicaid: setting the federal matching rate for the expansion population at the same rate as other enrollees; limiting state taxes on providers; setting federal caps on spending for the entire Medicaid population or just the expansion group; and repealing two regulations linked to eligibility and enrollment. 

Most of the options reduce the funds available to states, according to the CBO. The agency expects states will replace about half of the reduced support with their own resources, and then reduce spending by cutting provider payment rates, reducing optional benefits and cutting enrollment. 

For example, if Congress decides to limit provider taxes, where states levy taxes that finance a portion of their Medicaid spending, that would result in 8.6 million fewer people enrolled in Medicaid in 2034, including nearly 4 million becoming uninsured. The move would ultimately lessen the federal deficit by $668 billion, as the government would offer reimbursement for lower state spending, the analysis found.

Another option, placing a cap on federal spending for the expansion population, would save $225 billion — but 3.3 million people would lose Medicaid coverage. Repealing regulations that aim to reduce barriers to enrollment and simplify the renewal process would reduce the federal deficit by $162 billion over the next decade, but 2.3 million fewer people would be enrolled in Medicaid, the CBO found.