The House Committee on Energy and Commerce marked up its contribution to President Donald Trump’s One Big Beautiful Bill Tuesday, a significant accomplishment for Chairman Brett Guthrie (R-KY) and Speaker Mike Johnson (R-LA). While the legislation does contain some welcome reforms to Medicaid and delivered on its $880 billion deficit reduction target, the reforms agreed to fall far short of what could have been accomplished. As the legislation advances first to the House floor and then to the Senate, the current version must be the floor and no further dwindling should be tolerated.
According to the Congressional Budget Office, $715 billion of the deficit savings identified by the Committee comes from reductions in healthcare spending, almost all from the Medicaid program. This does not mean spending on Medicaid will decline; quite the opposite. The CBO projects that Medicaid will continue to rise year-over-year for every year covered in its analysis. It is just that with the House Republican reforms, spending would grow at a slower rate than before, a rate that had previously surpassed both Medicare and Social Security spending growth.
The big ticket Medicaid reform items driving the spending slowdown include freezing the provider tax loophole used by many states to boost Medicaid spending beyond established federal matching rates and forbidding any new provider taxes from coming on line; rolling back Biden administration regulations that prevented states from ensuring Medicaid recipients qualified for the program; blocking Medicaid benefits for recipients who cannot prove they are citizens; work requirements for able-bodied adults; $35 co-payments for recipients whose income is above the federal poverty line; and reductions in matching payments, from 90% to 80%, to states that provide healthcare for illegal immigrants.
