The House and Senate passed a concurrent budget resolution for Fiscal Year 2025 on April 10th. This resolution serves as a blueprint for the budget process and sets targets for congressional committees. It calls for an $880 billion dollar reduction to the Energy and Commerce, which oversees Medicaid and Medicare.
The Energy and Commerce Committee advanced its portion of the reconciliation billon May14th. It proposes reducing spending in the Medicaid program by $715 billion 2025-2034. It creates greater bureaucracy, red tape and ultimatily less funding for states.
The proposals advanced to the House and Budget Committee as part of a large bill that was voted don on Friday May 16th. There is another attempt to pass the bill, if it passes it goes on to the rules committee. If the House passes a bill, it then goes to the Senate.
Who are Medicaid Cuts Really For?
Tracking the Medicaid Provisions in the 2025 Reconciliation Bill
View a summary of the Medicaid provisions included in the legislation approved by the Energy and Commerce Committee compared to current law at KFF .
Federal Medicaid Cuts Would Force States To Eliminate Services for Disabled Adults, Older Adults, and Children
The reconciliation bill that passed out of committee in the House proposes cutting Medicaid and therefore gutting essential services upon which disabled and older people rely. Read the full article at American Progress.
Advocacy Groups: Medicaid Cuts Would Adversely Impact Home-Community-Based Services
The National Alliance for Care at Home released a statement opposing the Medicaid reductions. “Although we recognize that leadership in the House and Senate have expressed support for preserving services to these populations, we do not believe that it is possible to reduce Federal Medicaid expenditures by hundreds of billions of dollars over a ten-year period without negatively impacting eligibility and access to care.” Read the full article at Hospice News.
Medicaid is the primary payer for long-term services and supports (LTSS) in the United States. It pays for more than two-thirds of the LTSS delivered in home and community-based settings (HCBS). If large cuts happen, it could mean pulling back on HCBS services because they are not government mandated.
Medicaid is already underfunded!
Waitlists of Over 710,000 Already Exist
Many individuals wait years without any services
Waiting lists provide an indication of people who may need services they are not receiving, but they are an incomplete measure of unmet needs because they don’t include people with unmet needs in states that do not cover the applicable services.
Those who become eligible still face difficulty getting services due to staff shortages
All 50 states have reported shortages for any type of Home and Community Based Services (HCBS) worker.
Budget passed by Congress effectively cuts billions from Medicaid
$880 Billion in cuts from the committee overseeing Medicaid
$880 billion over 10 years, or $88 billion cut annually from The Energy and Commerce Committee
Government data estimates “improper payments” at $31 billion (of which $6.5 billion may be fraud). Cutting $88 billion a year will cut services and benefits for those in need
Medicaid makes up 38% or $618 billion off the committee’s budget
Medicare makes up 60% or $838 billion of the committee’s
If Medicare isn’t touched, the math doesn’t work without deep cuts to Medicaid
Any action that reduces Medicaid will harm people, especially those with disabilities
Home and Community Based Services (HCBS) a would be the first to be cut
States are not mandated to fund HCBS
HCBS provides alternatives to forced institutional care
Waitlists would grow
Abuse and Neglect would increase with greater staff shortages and less funding for basic services
Increased seclusion and isolation
Forced institutionalization, as that remains mandatory funding
Increased in deaths
Cuts, Caps, Blockgrants – All are arbitrary!
“If states do not offset federal Medicaid cuts by picking up the new costs, they would have to reduce Medicaid spending by covering fewer people, offering fewer benefits, or paying providers less” a new KFF analysis found.
Block grants or per capita caps — states would receive a fixed lump sum for Medicaid per enrollee, regardless of costs or inflation. States would have to pick up the difference, resulting in cuts to services and/or programs. Per-capita grants would limit the state to a set amount of money per Medicaid enrollee. Both strategies shift costs to states.
Reducing the federal match (Federal Medical Assistance Percentage or FMAP). All states currently receive a minimum of 50% in federal matching funds. Many states receive 90% in FMAP under Medicaid expansion, allowing them to bring more programs and services to older adults and provide coverage for unpaid family caregivers. Lifting the minimum 50% cap shifts more costs to states, forcing an overall cut in Medicaid spending. Ending the enhanced 90% FMAP for Medicaid Expansion, would automatically end expansion in several states and force other states to scale back Medicaid programs and services that older adults rely on.
Restricting allowable provider and insurer taxes, which every state uses to help fund all of their Medicaid programs, would reduce state budgets and force Medicaid cuts.
Cutting provider payment rates would result in fewer providers accepting Medicaid dorsening direct care workforce shortages for both people with disabilities. and seniors. Reducing access to care for seniors and potentially resulting in some nursing home closures.
Cutting medicaid funding won’t help people with disabilities. Reducing or eliminating federal funding for the Medicaid expansion population would not free up money for people with IDD or others disabilities. It just means less funding overall for the entire program.
29% decrease in state-financed Medicaid spending per resident, with loss of matching dollars.
Potential Federal Medicaid Cuts Represent 29% of State Medicaid Spending Per Resident, 6% of State Taxes Per Resident, and 19% of Education Spending Per Pupil
Medicaid cuts, block grants and per capita caps would decrease federal spending, creating a choice between increased state spending and enrollee coverage.
Medicaid allows people to stay healthy, employed, and in their homes and communities. It is part of the core fabric of the U.S. health care system. Cuts will have a ripple effect and impact hospitals, schools, nursing homes, families, employment, and more. Medicaid is part of a foundation that supports people, it should be one of the very last things to be considered for reducing spending. People with unmet needs will increase costs for everyone.
