‘Big, Beautiful’ Medicaid Cuts, Explained

Written By Leeja Miller

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Transcript:

Hi you’re tuned into Why, America, I’m Leeja Miller let’s get started. Despite Trump’s repeated promises not to touch Medicaid, promises he made as recently as this week, House Republicans are looking to do just that as they negotiate in committee to try to pass Trump’s sweeping “Big Beautiful Bill.” There is SO much in this bill that it’s impossible to keep it all straight–I imagine that’s on purpose–but today I’m focusing on cuts to Medicaid and the increasing likelihood that work requirements will be attached to Medicaid benefits. Despite the Republican argument that people who are able to should have to work in order to get government benefits, the reality is, as usual, much more complicated, and the proposed rules and cuts would end up costing more, creating MORE costly bureaucratic red tape, and likely lead to tens of thousands of unnecessary deaths.

As a reminder, Medicaid is the federal program dedicated to providing medical care to low-income Americans. It was created in 1965 as part of the social security act, and has been expanded over the years to cover more and more individuals. According to the centers for medicare and medicaid services, national health expenditure was 4.9 trillion dollars in 2023, or over $14,000 per person, and accounted for 17.6% of the GDP. Of that, $872 billion dollars went to Medicaid in 2023, representing 18% of total national health expenditures.

The proposed bill would cut Medicaid by $700 billion dollars over a decade, the largest cut to the program in history, and would likely lead to loss of health coverage by an estimated 8.6 million Americans.

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As we’ll discuss, the spin on these Medicaid cuts is very different depending on which side of the political spectrum you’re on. I saw this headline from Democracy Now that says ““This Is What Oligarchy Is About”: GOP Plans to Slash Medicaid to Offer More Tax Cuts to the Rich” It’s helpful to see in the Ground News browser extension that this publication leans left, so to get a fuller picture of the story I can click on Full Coverage. On the Ground News website I can see that 395 sources are covering this topic, with interpretations varying wildly depending on the bias of the publication.

For example, left leaning Mother Jones uses the headline “GOP unveils sweeping, brutal Medicaid cuts” while right leaning Tennessee Star uses the headline “House GOP Targets 'Big Abortion,' Child Sex Change Procedures in Sweeping Reform to Medicaid.” Depending on where you get your news, you’re going to get very different takes on the same story. And if you only pay attention to one side or the other you might miss the full picture.

This is where Ground News comes in - and why I've been using them for over a year. Today’s partner Ground News is an app and website that offers tools to help you critically analyze the news you read, providing context to understand the full picture.

By using the Ground News Vantage Subscription, I can also see the blindspot feed where I can see stories disproportionately covered by one side of the political spectrum. For example, for some reason there are zero right leaning sources are covering the story “White House says Trump is reviewing IVF policy recommendations promised in executive order.” Interesting. I feel better equipped to make sense of what’s happening in the world without being influenced by just one perspective. And listen I’m not the only one who loves Ground News, the Nobel Peace Center even called it "an excellent way to stay informed, avoid echo chambers, and expand your worldview.”

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83 million people in America are enrolled in Medicaid. According to health policy think tank KFF, quote “Medicaid is administered by states within broad federal rules and jointly funded by states and the federal government through a federal matching program.” This means that funding cuts at the federal level would result in states having less money for healthcare and they would then be left to make difficult decisions either to make up the difference by raising taxes or cutting state budgets, or by cutting healthcare programs, resulting in fewer people covered by insurance. This has impacts across the board–obviously, when people lose their health insurance it means the cost of their care and medication must be paid for fully out of pocket. Given the astronomical cost of healthcare in the US, those costs are usually way higher than most Americans can afford, especially those low-income Americans who are the ones that benefit from Medicaid. That means treatments are foregone because of the cost, medications are missed, and people die as a result. That is a pretty straightforward outcome when people cannot afford medical care. But this has ripple effects as well. People who don’t have insurance will still face medical emergencies. They will go to emergency rooms and obtain care that they cannot afford to pay back. Those hospitals and care providers must then bear the cost of those unpaid bills. This on top of the direct cuts to provider subsidies, means that those providers will have to increase the cost of services, operate with staffing shortages, or shut their doors. That will result not only in loss of medical care or decreased quality of care but also in loss of already scarce rural jobs. And these are just the effects we know of and can predict. As Alice Burns, an associate director from KFF, recently told CNN, quote “We’ve never in history experienced coverage cuts of this size, and that makes it really difficult to predict how states, providers and patients will respond. For the past 50 years, there have been these incremental increases in the availability and access to health care and health insurance coverage. So moving backwards and taking coverage away … This isn’t something we’ve seen before.”

What is also new is the proposed addition of work requirements for certain recipients. Able bodied people aged 19 to 64 would be required to work 20 hours per week in order to maintain their benefits, unless they are eligible for a waiver. There are additional options including community service, school, or work training programs that could take the place of those 20 hours per week, but in any case every single person receiving Medicaid benefits would need to prove they are either meeting the work requirements or eligible for a waiver. This despite the fact that fully 64% of working-age recipients of Medicaid DO work, often in low paying or informal jobs that do not provide health insurance coverage. According to the Washington Post, “Of the remaining 36 percent, 8 percent don’t work because they are retired, cannot find jobs or have some other reason. Most others don’t work because they are caring for a relative, have a disability or are in school.” Additionally, millions of workers get laid off or fired every year. Because we tie private health insurance to employment already, that means that those who are unemployed, have lost their income and their health coverage all at once, and are actively seeking work, need a safety net to fall back on in the meantime. Medicaid is that safety net for many people. The original version of the bill would have the new work requirements go into effect in 2029, so any negative impacts wouldn’t be felt until after the next presidential election. Some Republicans are pushing for the work requirements to take effect sooner, in 2027.

And these new work requirements wouldn’t simply involve a one-time reporting obligation. Individuals would need to report regularly in order to maintain their benefits. This additional red tape will result in people losing coverage, even if just for a short period of time. A recent study found that thousands of people have died as a result of what’s known as “churn”, a phenomenon wherein people briefly lose Medicaid coverage either because of red tape errors or because of income fluctuations or other reasons, only to get it reinstated soon after. Those who died as a result of churn often only lost their coverage for, on average, two months. For people who are very sick AND very poor, the requirements of jumping through bureaucratic hoops to continually prove their worthiness to receive life saving health care coverage could create too high of a burden to maintain coverage, and even going one week without important medications can mean life or death.

Recent reporting from The Washington Post lays out the real life consequences of the additional red tape that comes from slapping work requirements on Medicaid benefits. Like I said, Medicaid funds are distributed by the federal government to the states, and states largely get to decide how much they participate and what they do with that money. In Georgia, back in 2023, they began requiring proof of work from certain individuals in order to qualify for Medicaid. Despite the state’s goal of 50,000 enrollees, only 12,000 of the 250,000 newly eligible Georgians actually received the benefit. Many were unable to receive benefits because they struggled to prove to the state that they were, in fact, working, or their work was deemed insufficient, such as those whose work involved caring for a sick family member.

And the administrative burden isn’t just borne by the people trying to jump through the new regulatory hoops. ProPublica found that, in Georgia, fully 75% of the money spent on Georgia’s medicaid program by the end of 2024 went to paying consultants. 75% of the $87 MILLION taxpayer dollars the state paid for their work requirement program went to companies being hired to administer the program, as opposed to being used to directly benefit recipients. And they’re not even doing a good job at the administration part, with thousands of Georgians falling through the cracks every year.

And yet Republicans tout these work requirements and medicaid cuts as good for Americans. Finally, they cry, they are protecting us all from lazy welfare queens and immigrants stealing our benefits. They are doing this for the good of everyone, so that those who actually DESERVE these benefits can finally get them, after years of moochers stealing from the system. As the stats I’ve already laid out show, the percentage of people who can work but simply don’t want to because they want to sit at home and play video games and mooch off the system, is incredibly miniscule. They are ruining and dismantling an entire system in response to a handful of people, a tiny percentage, who they think are unfairly taking advantage of it. It is a solution to a problem that does not exist.

This is a dance around the reality that funding everything could easily be done if we just raised taxes on the billionaires who are extracting so much from this country’s economy. There’s no reason we should have a country with the most billionaires while people die because they can’t afford the medication they need to literally survive or because they didn’t get the treatment they needed because they couldn’t pay for it out of pocket. There is a simple solution to this, it is graduated income taxes, everything could be paid for if there weren’t so many people in this country deadset on the idea that the government needs to be defunded as much as possible. Who is that helping, other than a few billionaires and multi-millionaires? Which, it turns out, entirely the point. This Big Beautiful Bill would also include permanent tax cuts, which economist Paul Krugman, as reported by the American Prospect, has said would result in the bottom fifth of Americans seeing their after-tax income decline by ELEVEN PERCENT while the top .1% would see their after tax income RISE by 3 percent. As Krugman wrote on his Substack, Trump’s original tax cuts during his first term, quote “gave big tax breaks to the wealthiest Americans. But it also threw a few crumbs to people further down the scale. By contrast, the House Reconciliation Bill, by slashing benefits — especially Medicaid — will cause immense, almost inconceivable hardship to the bottom 40 percent of Americans, especially the poorest fifth.”

And the real irony is that in trying to cut as much as possible from this program, they are creating so many carve outs and caveats and requirements that it is creating MORE bureaucracy and that bureaucracy costs MILLIONS of dollars. There are SO many other countries that have managed to increase health outcomes far beyond what we see in the US while also spending far less of their GDP on healthcare. And the answer isn’t “make people work more.” And yet Republicans say but look at the budget deficit, if we don’t get it down our credit could be lowered even further, a recession would be imminent. As much as balancing the budget is a worthy pursuit so that we aren’t wasting tons of money–for example by doing an audit of the pentagon and figuring out why they can’t account for huge amounts of taxpayer money being spent–it is in fact far more powerful if we just make more money. Anyone trying to balance their personal finance budget, if given the choice between tightening their belt or just doing one simple thing to make gobs and gobs of extra money so they don’t have to, is going to choose to do the thing that will just make them more money so they don’t have to cut back. That is the reality being faced by the US government. Republicans are saying well we HAVE to cut medicaid because look at this unbalanced budget, and we are UNWILLING to do the one thing that would be incredibly straightforward and bring in so much extra cash we could easily fully finance all of this and, in fact, cut BACK on bureaucracy. Because when there are fewer constraints around who is or isn’t eligible, because there’s more cash to go around, that means less government interference and reporting requirements. And, in fact, by taking that extra cash and investing it into providing people with better healthcare, especially children and their caregivers, we will be SAVING money. Studies have shown over and over that children who receive adequate healthcare grow up to be more productive, tax paying adults.

Of course there is also the argument that tens of thousands of lives could be lost if medicaid is cut. A recent paper out of the National Bureau of Economic Research found that, after the Affordable Care Act, also known as Obamacare, expanded access to medicaid, those states that chose to take advantage of the expansion saved 27,400 lives from 2010 to 2022. Those states that declined to expand Medicaid missed out on saving 12,800 lives. Lives that could have been saved had the states decided to increase funding for the program that the federal government is now looking at fully downsizing. As Matt Bruenig, founder of People’s Policy Project recently wrote in an op ed for The New York Times, quote “The main moral intuition underlying the appeal of these kinds of work requirements appears to be the idea that it is wrong for certain individuals to get something for nothing and that, instead, everything must be earned. While it is true that we live in a capitalist society where individuals’ standard of living is largely determined by how much money they can scrape out of capital and labor markets, there are some services — such as police, fire, library and education services — that are provided to everyone regardless of employment status.

Health care services have much in common with police and fire services. We turn to them when something has gone wrong, often unpredictably and catastrophically. Our society could decide that police and fire departments will not respond to calls made by individuals who worked less than 80 hours in the prior month, but most would find this repugnant and contrary to the purpose of these services. Likewise, refusing medical care to people in their time of need based on how much they happened to work the month before is a cruel and pointless policy.”

Unfortunately, I don’t think the whole “this could save peoples’ lives” or “this is cruel policy” arguments are particularly persuasive to our elected officials or to the people who oppose increases to federal taxes, even if it is their very lives on the line. Studies show that it is low income and rural areas, some of the areas most against tax hikes, that could see some of the worst outcomes from these Medicaid cuts, as already stretched-thin hospitals in remote areas may need to fully close their doors when they lose federal funding to support their work. Decreased medicaid funds means more and more people will seek medical care and not be able to pay for it. Larger hospitals especially in urban areas may be able to shoulder that burden, but rural areas, especially in states that refuse to raise state taxes to cover the difference, so red states, the ones that most likely voted for Trump, will bear the brunt of these cuts.

The problem is that these facts are pretty well known. The benefits of universal healthcare, the fact that work requirements don’t save money or help anyone, this has been studied and proven time and again. I know my audience and I know I’m preaching to the choir when I say healthcare is a human right that shouldn’t be tied to employment and should be guaranteed for all, and that defunding government healthcare will have largely negative outcomes for the 99%. But that falls on deaf ears to the people who need to hear it, the ones who are voting in the Republicans dead set on slashing public services even if their constituents suffer. Because facts don’t appeal to emotions. And the overriding emotion in these red rural areas, as far as I can tell, is that the government is full of corruption, I’m feeling it in my pocketbook, why should I give what little hard earned cash I’m making to a government that doesn’t work for me. Context, history, facts, studies, none of that matters to people unwilling or unable to think critically about their government. In fact a recent poll from KFF found that over 60% of Americans support work requirements for medicaid, likely because they assume that it’s straightforward and there are enough people mooching off the system that work requirements would solve. People vote on vibes, and these people get their vibes from Fox news. And so even if these cuts go through, and people in rural areas see their hospitals close down, lose their coverage, and die, Fox will be there with an easy scape goat telling them it’s not because of too little government spending on health care, it’s because of entrenched left wing bureaucrats or Bidenomics or immigrants or lazy mooches taking money from the system. Individuals ruining it for the rest of us, instead of a system set up to only benefit the 1%. And so whatever schadenfreude I may feel as medicaid gets stripped away and Republican voters across the country say “hey wait why did my healthcare just get taken away this isn’t what I voted for” will be tempered by the knowledge that the right wing propaganda machine in this country is well oiled, and the erosion of public education and increasing echo chambers means connecting the dots for Republican voters enough to get them to abandon the Republican party in favor of progressive ideals that would actually help them is nearly impossible.

The House Rules committee worked through the night Tuesday into Wednesday morning to iron out the Big Beautiful reconciliation bill terms, with House speaker Mike Johnson attempting to make various Republican factions happy enough to pass the bill on the floor of the House. As of mid-day on Wednesday, the bill had not advanced to a vote on the floor, but that vote could be imminent if Johnson secures enough votes to pass it, when it would then travel to the Senate which would have to pass it in order to get it into law, which comes with its own set of numerous hurdles. Johnson has demanded that the bill be passed before their Memorial Day break this weekend, creating an artificial deadline that has Republicans up all hours of the night to push through a bill that’s so big most Americans have no idea what’s even in it. Johnson can only afford to lose 3 total Republican votes and still get the bill through, which is why negotiations have been so long and unwieldy given the various factions within the Republican house members. I’ll continue to keep an eye on this bill as it moves through Congress and break down important pieces of it so that we all know exactly what our elected officials are doing to take away our benefits and take money from the poor to give to the rich.

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And if you liked this episode, you’ll like the one from Monday about Curtis Yarvin and the ideology trying to end democracy.

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