The “One Big Beautiful Bill” Act passed by the U.S. House of Representatives on May 22 represents the largest reductions to Medicaid in the program’s 60-year history, according to KFF Health News “What the Health” podcast.
According to a May 20 analysis of the bill, the nonpartisan Congressional Budget Office (CBO) estimated that proposed changes to the Medicaid program would decrease federal funding by $698 billion and reduce the number of people covered by at least 10.3 million by 2034.
Among the changes to Medicaid, this bill would require nondisabled adults ages 19 to 64 to work, volunteer, or study at least 80 hours per month to qualify for health coverage. According to a KFF analysis, 92 percent of adult Medicaid beneficiaries currently “…work full or part-time (64 percent), or not working due to caregiving responsibilities, illness or disability, or school attendance. The remaining 8 percent of Medicaid adults reported that they are retired, unable to find work, or were not working for another reason.”
This type of mandate will not increase employment but will cause more people to lose healthcare coverage due to burdensome paperwork requirements (listen to our recent podcast about proposed Medicaid changes).
Plus, it will cost states millions to hundreds of millions of dollars to administer work requirements, according to a 2019 Government Accountability Office (GAO) study. In Medicaid demonstration projects, GAO found that Kentucky paid over $271 million to administer work requirements to 620,000 Medicaid beneficiaries, while New Hampshire paid $6.1 million for 50,000 recipients (visit our Knowledge Hub for more information on posed Medicaid work requirements).
Another controversial provision would cut nearly $300 billion from the Supplemental Nutrition Assistance Program (SNAP, also known as food stamps), the largest budget reduction in the program’s history. For the first time, states would be required to cover at least 5 percent of the program’s costs, with some states paying substantially more. Experts at The Center on Budget and Policy Priorities predict between 120,000 to 250,000 people with lawful immigration status, including 50,000, will see their food assistance end if this provision is implemented.
Other impacts of the House version of the budget bill include:
- People kicked off Medicaid would no longer qualify for Affordable Care Act (ACA) subsidies for marketplace healthcare insurance plans since pandemic-era enhanced tax credits, which helped many Americans afford coverage on state health insurance “exchanges,” will not renew after 2025.
- A ban on abortions for health insurance plans on ACA’s “exchange” marketplaces by blocking Medicaid funding to Planned Parenthood, which also limits access to women’s healthcare services ranging from annual wellness exams and cancer screenings to birth control and HIV services.
- Excluding 17 million low-income children and families from accessing the expanded Child Tax Credit because their families do not have high enough incomes, and 4.5 million U.S. citizen children would no longer have access to this credit if they were in a mixed-status immigrant family, according to Economic Security Project Action.
- Eliminating the National Institute on Minority and Health Disparities, within the National Institutes of Health (NIH), which would stop gathering racial and ethnic health disparity data, among other activities, according to KFF Health News (listen to our recent podcast about the impact of disappearing federal health data).
- Shutting down the Centers for Disease Control and Prevention’s (CDC) National Center for Injury Prevention and Control, which oversees overdose prevention programs.
While this budget bill cuts Medicaid and the ACA spending by about $800 billion over ten years, it also adds trillions to our national debt. The CBO estimates the current budget bill will increase the deficit by at least $2.3 trillion. This bill represents the largest upward transfer of wealth in American history, meaning resources in households in the lowest tenth of U.S. income distribution would decrease, but resources in households in the highest decile would increase, according to CBO analysis.
If enacted without any changes or additional Congressional action, this deficit increase will trigger automatic mandatory cuts, including a 4 percent reduction or more than $500 billion to Medicare spending between 2026 and 2034. Unlike Social Security, Medicare is not exempt from sequestration, a process under the Statutory Pay-As-You-Go Act (PAYGO) of 2010 the requires any “…new legislation (i.e., this house budget bill) that increases mandatory spending or decreases revenues must be fully offset by other spending or revenue changes, so it is deficit neutral.”
The bill travels to the Senate, where some members are calling for lowering federal spending to pre-pandemic levels. U.S. Sen. Ron Johnson (R – Wis.) proposes budget cuts of roughly $6 trillion rather than the $1.5 trillion decrease in the House budget bill.
What you can do
Senate leaders hope to bring their version of the “One Big Beautiful Bill” for a vote by Independence Day or July 4, which gives you little time to contact your elected officials to voice your opposition to budget cuts that harm our most vulnerable neighbors. Tell your senators to exclude the deficit-raising effects of this budget bill to avoid the Statutory PAYGO Act’s automatic 4 percent sequestration cut to Medicare.