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Medicaid Cuts - cutting costs for a program that went from $20 billion in 1980 to 918 billion in 2025, went up 45 times in 45 years. Projecting it out at this rate would leave little for other priorities for the Nation. Hence the need to set priorities- helping one means not helping the other in need. Helping a able bodied person means not helping the elderly who need help as by eliminating Social Security tax for about 90% of recipients over 65 years for instance. Medicaid was originally intended for able bodied. Critics of the plan say there is a lot of red tape and reporting at state levels. The correct solution would be to cut the stringent reporting requirements, cut the bureaucratic reporting, make it simple easy to report and not frequent. California, New York and other states will likely make the reporting easier. For impact on rural hospitals Collins and Murkowski have setup a $25 billion fund in this Big Beautiful Act to support rural hospitals. ...

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Ron Johnson (R-Wisconsin) who seeks deeper spending cuts, Josh Hawley (R-Missouri) who sees Medicaid co pay for able bodied at 100% of federal poverty level as a "sick tax," Lisa Murkowski who differs on taxing providers, and other Congressmen and Women in the Republican party are opposing the new tax cut package of president Trump. Senator Rand Paul (R- Kentucky opposes the raising of the debt ceiling, and is also opposed.

Most of the main Medicaid cuts come after 2029 after Trump no longer is president, so that Republicans who want to see the shrinking of the Medicaid program so it meets only needs of the most needy, want to see faster cuts while Trump is president. And there are other Republicans in Congress who face tight elections and see big risks of losing their seats.

 

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Medicaid is now costing the US about 880 billion dollars in 2025. Of this 69% is covered by Federal dollars sent to the states. WSJ reports- 2025 DJT action on Medicaid calls for around $800 billion  savings over 10 years in Medicaid cuts that would come from $109 billion savings over 10 years for work requirement. And $600 billion savings over 10 years from paying only 90% (not 100%) for the people added to Medicaid by Obama that are in better health than the core Medicaid population who get only 90%.

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WSJ Analysis of $1 trillion Medicaid Cuts in the One Big Beautiful Act-who it impacts most. It means less money for insurers, hospitals, and 9 million able bodied Medicaid recipients being moved to being covered by new employers. Under extension of Obamacare able bodied Americans were added to Medicaid in some of the states. Some states such as Texas and Florida and other southern states decided not to do this. The One Big Beautiful Act removes this extension of Obama care and the funding to states and adds the able bodied requirement to cut funding by about $1 trillion. Insurance companies who covered the insured and got payments from the federal government will lose these payments. Hospitals will also lose these payments from the federal government that sent money to the states for funding Medicaid. Overall Medicaid funding is proportionally cut more in Republican states. In Arizona, Kentucky and Virginia Medicaid cuts will be 18%, compared to 9% in New York and 13% in California. 93% of the cuts are in states that have expanded Medicaid to include able bodied adults. The Big Beautiful Act also cuts down on provider taxes which hospitals used to get more funding. Rural hospitals are given access to a $50 billion fund in the Act  so they can be kept open. ...

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One Big Beautiful Act passed in US Senate with Vance casting tie breaking vote. It renews the tax cuts from DJT's first term in office in 2017 and provides tax cuts to seniors, middle class, and small business. It provides 100% expensing for business to increase investment. Mothers get child care credit that is doubled, senior citizens over 65 years get a $6000 deduction. The seniors deduction means 88% of seniors will now pay no taxes on social security benefits from 64%. Medicaid changes so that able bodied Americans will have to put in 80 hours of work to qualify.  Note that the Medicaid program was becoming unworkable and unsustainable- starting with the idea of helping people unable to work and transitioning those who could work, it jumped to $228 billion cost in 2000 from $28 billion in 1980, ten times over 20 years. Going up to $918 billion in 2024, 4 times the 2000 level. Medicaid is now 62% of what Social Security costs, $918 billion compared to $1480 billion for Social Security. ...

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Krugman in the NYT cites president Trump's reference in an interview with the Economist magazine to the expression "priming the pump." Trump in that interview in May 2017 said he had come with the expression and feels good about it. "Priming the pump" is an expression used by president Franklin Roosevelt during the Depression period. During the depression and in 2009 the economic crisis needed a stimulus response and priming the pump. The economy today with lower unemployment is not the time to increase deficits with tax cuts for the wealthy, says Krugman. Only infrastructure spending with a long term return justifies increasing the deficit. He is critical of Speaker Ryan for supporting deep cuts into Medicaid for poor people, and yet supporting the tax cuts weighted more towards helping higher income people.

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The Big Beautiful Tax and Spending Bill in the US Congress faces close votes in the US Senate with Senators Rand Paul of Kentucky, and Thom Tillis of North Carolina, both Republicans against it.  The Senate version has additional cuts to Medicaid funding. Tillis expressed concern about these cuts. Senator Rand Paul is opposed to increasing the deficit for enlarged spending and tax cuts. Republicans and DJT have close votes in the Senate and in the Congress. Republicans Murkowski of Alaska and Curtis of Utah want to change the early phaseouts of tax credits to the renewable energy industry in the Senate bill, and the excise tax after 2027 to avoid buying from China and develop American manufacturing in renewables. Senator Collins of Maine has an amendment to add $25 billion for rural healthcare and rural hospitals to offset the effects of large Medicaid cuts. Collins plan also lets taxes revert to 39.6% from 37% for married couples incomes over $50 million.  The bill then heads back to the House for changes by Wednesday, July 2, for a goal to have it on the president's desk by July 4th, Friday. ...

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This NYT editorial points out that the cuts to Medicaid amount to taking out a fourth of its budget and are sure to hurt low income Americans. The cuts are about $880 billion over 10 years for Medicaid. The $300 billion less in subsidies over ten years is likely to hurt the elderly. It also points out that removing the individual mandate will make it harder to reduce premiums as fewer healthy adults offset the costs of sick patients.

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German Chancellor Merz says welfare entitlements are becoming a strain on the economy. The welfare entitlements growing in size puts huge strain on the budgets of US, Germany, UK, and France. Small changes in the Medicaid program in work requirements became politicized in the US spending bill passed in Congress. The size of the Medicaid program in 2025 is an example. Started in the LBJ administration it was $1 billion in 1965 covering 4 million people increasing to $10 billion covering 20 million people in 1976. 50 years later it covers 3.5 times the number of people at 71 million at a cost that is staggering of $900 billion. US population in the 50 years increased from 218 million to 342 million by 57% when the Medicaid population grew at 355% of 6 times the actual population growth showing that the country in some ways was growing much poorer and unhealthier and that other factors were also at work. As a percentage of the size of the economy  Medicaid growth was $10 billion when GDP was $1700 billion in 1975 or .00059% vs $900 billion when Medicaid is $900 billion  when economy GDP in 2025 is 30,000 billion or .03000 which is 50 times the percentage in 2025 vs 1975. At work in this is the ballooning cost of the way medicine is practiced in the US, and other factors.   ...

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Republicans representing poorer rural and working class communities, Democrats wealthy suburban communities 2025. 26 to 56 vs 69 what this means is that Republicans who in 2009 represented 26 of the poorest 100 House of Representatives Districts now represent 56 in 2023. By Contrast Democrats in 2023 represent 69 of the wealthiest House Districts in the Nation. It is a complete reverse, as big as the change that took place under FDR/Truman and LBJ where the South gradually shifted to Democratic from Republican and the North and Northeast Unites States  moved from Republican to Democratic party.

This puts Republicans traditional position to cut Medicaid in a quandary as it may affect their control of the House in future elections. This report in WSJ looks at details by District of what could happen.

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U.S. states want flexibility in applying the Medicaid program which covers 53 million Americans earning lower levels of income. This amount was $11,616 a year for working parents in 2009, according to the Kaiser Fondation. Some states have a higher income level, as high as $48,400. The problem for states are serious budget deficits, with Medicaid comparing with education as a major cost. The recession and job losses has added 8 million Americans to Medicaid rolls. The Federal government supports 57% of the Meddicaid budget on average. A provision in the 2010 health care law says states cannot limit Medicaid eligibility, or they would lose funding by the federal government. The Obama adminstration's position is that eligibility or provider cuts will not bring in large savings, and will allow larger cost-sharing by Medicaid users, with only minor cuts in eligibility. Its position is also that the law does not give the federal government waiver authority. Some of the issues raised relate to the structure of Medicaid cost and its rapid escalation. Health and Human Services says 1% of benificiaries, especially the long term care, use up 25% of the Medicaid expenditures. One astonishing fact is that two thirds of all U.S. nursing home residents are on Medicaid. The total cost is rising, from $187 billion for Medicaid in 2000, to $346 billion in 2009, according to the Centers for Medicare and Medicaid Services. In July 2011, $26 billion in additional federal Medicaid funding expires, which will be added to state expenses as they struggle with large deficits. In states like Maine, with generous benefits, about one fourth of all residents are in the Medicaid program. ...

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Vast majority of DJT supporters 88% (down from 95%), approve of the president DJT's overall performance. On tariffs and Big Beautiful Bill. Democrats vastly disapproving, the messaging on cuts to Medicaid even though it's funding had grown close to $1 trillion ($909 billion in 2024), the uncertainty on tariffs even though the $1 trillion China trade surplus needed serious corrective action, federal government job cuts, leads to much larger proportions of Democrats opposing than Republicans supporting leading to about 60% unfavorable overall on tariffs and Big Beautiful Bill. Such unpopular action is sometimes the role of government like the action to rebuild the trading system and bring restraint to runaway spending on benefits, and can be overcome with a strong economy and capital investment for growth in future years. Another problem for the DJT administration is in the messaging to get the message across when some of the president's actions can be inconsistent or appear inconsistent. Add to this the distractions such as international diplomacy on Ukraine that take the president's time. Yet changes were needed in the international trading system and tough action is sometimes necessary when most countries and groupings, China EU, Canada, Mexico, can game the system their benefit to the detriment of the American people and jobs/communities at home. On the Big Beautiful Bill at the rate of growth in funding for Medicaid to $909 billion in 2024 from $2 billion at its inception under LBJ in the 1960's some restraint on spending would ultimately keep such help flowing where it is needed over the long haul. ...

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U.S. president Trump's 2017 budget is an effort to reshape spending priorities by the Republican party. Apart from Medicare and Social Security all other entitlement programs from the days of Lyndon Johnson's Great Society are subject to cuts. Deep cuts to Medicaid and food stamps, including introducing work requirements. The philosophy behind it is that compassion will now be measured not by how large these programs are but by how much the government can get people "off these programs and back in charge of their lives,"  according to Budget Director Mulvaney.  The cuts are $616 billion to Medicaid and Children's Health programs, $193 billion in cuts to Food Stamps, $143 billion in student loans, $72 billion in disability programs. The overhaul of the Affordable Health Care Act is part of this change. The reallocation would put more money into infrastructure for $200 billion, and in tax cuts, $19 billion in a parental leave program and $29 billion for veterans programs, plus added spending on the military. William Hoagland of the Bipartisan Policy Center, a Republican who worked on budget issues says it will be politically difficult as the cuts to lower income groups come with tax cuts for small businesses and higher income individuals.  Beyond the policy priorities there is an area where both Republicans and Democrats are skeptical of the budget. This is how it impacts the U.S. debt. Under Congressional Budget Office estimates the U.S. debt as a percentage of GDP which rose to about 75% after the Great Recession starting in 2008, is projected to grow to about 85%. In sharp contrast the Trump administration estimates of the Office of Management and Budget are for it to drop to 65% based on rosier estimates of 2% inflation, 3% growth for the decade ahead. Experts say this is unlikely once the Fed raises interest rates and the unemployment rate currently at 4.4% leads to rising inflation, undercutting growth which has remained below 2% for a long period. These concerns are also voiced by Hilsenrath in the WSJ based on the experience of other countries such a Britain that cut corporate taxes without seeing an uptick in economic growth. ...

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The $350 billon in proposed cuts to Medicare and Medicaid in the 2011 deficit reduction talks will do little to reduce the rapid rise in medical costs. Instead it shifts the costs to seniors, state governments and public hospitals. Gail Wilensky, former head of Medicare under the first President Bush and now a senior fellow at Project Hope, says this should not be confused with real reform to Medicare which reduces the rapid increase in costs. It does little in the way of fundamental changes that would reduce the growth in costs. About $53 billion comes from reductions to senior's ability to buy extra Medicare supplemental insurance or Medigap. Another $14-26 billion would have the government reduce payments to hospitals for unpaid debt. The few items to curtail fraud in the use of CT scans or purchase of power wheelchairs would provide savings of $2-3 billion over 10 years. $4 billion comes from lowering Medicaid payments to hospitals treating a high percentage of low income patients, hospitals such as Cook County Hospital in Chicago, San Francisco General Hospital, and Parkland Hospital in Dallas....

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Differing views of Republicans in the Senate on cuts to Medicaid and shifting of Medicaid to the states, cuts in food aid and distribution of the aid, green tax credits, business deductions are likely to lead to a revised bill being passed in the US Senate. It will then have to be passed in the US House of Representatives. DJT calls it the biggest tax cuts in history and one that aids small business.

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Margot Sanger-Katz of the NYT provides an excellent summary of winners and losers under the new Republican House healthcare bill that passed the House in a 217-213 vote on May 4, 2017. On the whole middle income people and higher income people stand to benefit, with sharp cuts in Medicaid, and higher premiums as well as smaller subsidies based on age affecting older people. Pre-existing conditions and minimum benefits are included as in ACA, with the provision that states can in some ways limit that coverage. Employers are no longer required to provide mandatory health coverage, helping large and small business owners.

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Senate Finance Committee chairman says Senate Democrats have found ways to reduce the cost of the health care plan from $1.6 trillion to $1 trillion. A tax on some employer provided health benefits, cuts in Medicare and Medicaid spending, employers helping to pay the cost of health insurance for low-income workers, and limiting the eligibility for subsidies to households with incomes at 3 times the poverty level or $66,150, instead of 4 times the poverty level. Also a reduction in the plan to give tax credits to small businesses to help them buy insurance. And expansion of Medicad would be delayed to 2013.

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WSJ shows breakdown on federal spending hikes and cuts in the big DJT US Tax Bill. 2025 US Tax Bill renews the tax cuts put in place by Trump in his first term that expire in 2017. About $2.75 trillion in spending increases are not offset says WSJ. Briefly it has spending hikes for $2.18 trillion      DJT Tax Cuts from first term  $1.31 trillion       Increase Standard Deduction $820 billion         Deduction for businesses $797 billion         Child tax credit $1.41 trillion        Limits on Alternative Minimum Tax The goal is to promote business growth and help small business owners, parents with children, help ordinary Americans take more in take home pay during cost of living pressures for the average American. Savings come from $1.87 trillion repealing personal dependent exemption and $916 billion from capping state and local tax deductions. Added savings from repealing clean energy tax incentives and EV credits. Increasing work requirements for Medicaid saves $625 billion, tution aid cuts $346 billion, $300 billion from SNAP changes.   ...