Why Medicaid Cuts Are In The GOP Tax Bill

Summary

Summary of NPR Politics Podcast Episode: "Why Medicaid Cuts Are In The GOP Tax Bill"

Release Date: May 28, 2025

In this episode of The NPR Politics Podcast, hosts Deepa Shivaram and Deirdre Walsh engage in an in-depth discussion with NPR health policy correspondent Selena Simmons Duffin about the inclusion of Medicaid cuts in the recently passed GOP tax bill. The conversation delves into the intricacies of Medicaid, the strategic placement of its cuts within the legislation, the potential impact on millions of Americans, and the evolving political landscape surrounding this contentious issue.

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Understanding Medicaid: Scope and Significance

Selena Simmons Duffin begins by clarifying the distinction between Medicare and Medicaid, emphasizing Medicaid's role as a vital health coverage program for low-income individuals across the United States.

Selena Simmons Duffin (01:34): "Medicaid is the program for anyone low income across the country... All in all, 80 million people across the country. So like 1 in 5 people in America rely on Medicaid for health coverage."

She highlights Medicaid's expansive coverage, which includes children, adults, and the elderly, and underscores its financial magnitude, with annual expenditures reaching approximately $880 billion.

Evolution of Medicaid: Expansion and Challenges

Deepa probes further into Medicaid's trajectory, prompting Selena to discuss the program's expansion under the Affordable Care Act (ACA) and the subsequent Supreme Court decision that made Medicaid expansion optional for states.

Selena Simmons Duffin (02:25): "The Affordable Care act did a couple of things to try to get more people covered... Medicaid expansion became a whole Supreme Court battle... there are only 10 holdout states."

She notes the significant reduction in the uninsured population, from 50 million before the ACA to under 30 million post-expansion, while acknowledging that Medicaid remains the largest item in most state budgets.

GOP Tax Bill and Medicaid Cuts: Rationale and Mechanisms

Deirdre Walsh explains the GOP's strategic use of the reconciliation process to pass the tax bill, which necessitated finding savings to offset tax cuts. Given that discretionary programs like education offer limited savings compared to entitlements, Medicaid emerged as a primary target.

Deirdre Walsh (05:01): "Republicans are using a process called reconciliation... They needed to come up with savings to offset those costs. Getting those kinds of savings just from cutting... Medicaid was the one that House Republicans focused on."

She highlights the GOP's long-standing agenda to restructure entitlement programs by eliminating waste, fraud, and abuse, positioning Medicaid cuts as a continuation of this objective.

Impact of Medicaid Cuts: Eligibility and Coverage Reductions

Deepa turns the focus to the specific provisions of the tax bill affecting Medicaid, seeking clarity on who would be most impacted.

Deepa Shivaram (06:54): "So Selena, if this bill passes as is Medicaid, changes are implemented, who is that impacting exactly?"

Selena Simmons Duffin responds by detailing that the cuts target "able-bodied, non-working" individuals within Medicaid, constituting about 8.8% of beneficiaries. The bill introduces work requirements, mandating that recipients demonstrate employment efforts twice a year to maintain coverage.

Selena Simmons Duffin (07:05): "It says... you have to show that you've worked a certain amount to be able to hold onto your Medicaid. And if you can't do that, then you lose coverage."

Additionally, Deirdre points out changes affecting state Medicaid funding formulas, particularly those that could strain rural hospitals, leading to broader healthcare access issues.

Deirdre Walsh (07:52): "States now... have to tax providers. This bill freezes that... rural hospitals won't get enough money and they will be forced to close."

Political Dynamics and Republican Divisions

As the bill moves to the Senate, internal Republican disagreements surface. Deirdre Walsh explores the tension between Republicans advocating for Medicaid cuts and those opposing them due to constituent reliance.

Deirdre Walsh (10:58): "There are some Republicans that just don't think that these kinds of changes to Medicaid are what Congress should be doing... A lot of them have said... '40% of the people in my district are on Medicaid. I don't want to cut Medicaid.'"

She cites Senator Josh Hawley as a notable Republican dissenting voice, who argues that Medicaid cuts are "morally wrong" and "politically suicidal."

Senator Josh Hawley (13:35): "[Cuts to Medicaid] are morally wrong and politically suicidal."

This division indicates a shifting Republican stance, influenced by the political climate and voter dependence on Medicaid. Selena adds that voters have strongly supported Medicaid expansions, making any attempts to curtail the program politically challenging.

Selena Simmons Duffin (16:18): "Voters are paying attention to Medicaid and they like it. It's a really challenging political problem."

Democratic Opposition and Electoral Implications

The Democrats' opposition to Medicaid cuts is rooted in both ideological commitments and electoral strategy. Deirdre Walsh suggests that cutting Medicaid could become a pivotal issue in upcoming midterm elections, potentially mobilizing Medicaid-dependent voters against Republican candidates.

Deirdre Walsh (17:07): "If they make this midterm election about Republicans trying to take away your health care... that's something that a lot of voters who rely on this program will remember."

Selena reinforces that Medicaid enjoys broad public support, making it a significant factor voters consider when evaluating candidates and party policies.

Looking Ahead: Senate Negotiations and Political Fallout

As the tax bill proceeds through the Senate, negotiations are expected to continue surrounding Medicaid provisions. The potential for amendments and compromises remains, especially as Republicans seek to balance deficit reduction with preserving essential healthcare services.

Deirdre Walsh (14:36): "Republicans are trying to get additional spending cuts while keeping some Republicans who don't want to change some of these Medicaid programs."

The ongoing debate will likely center on finding a middle ground that addresses fiscal concerns without disproportionately affecting vulnerable populations reliant on Medicaid.

Conclusion: Medicaid Cuts as a Central Political Battlefront

The inclusion of Medicaid cuts in the GOP tax bill represents a critical intersection of healthcare policy, economic strategy, and political maneuvering. With substantial implications for millions of Americans and significant electoral consequences, the fate of these cuts remains a focal point in U.S. politics.

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Notable Quotes with Attributions and Timestamps:

• Selena Simmons Duffin (01:34): "1 in 5 people in America rely on Medicaid for health coverage."

• Deirdre Walsh (05:01): "Republicans are using a process called reconciliation... Medicaid was the one that House Republicans focused on."

• Senator Josh Hawley (13:35): "Cuts to Medicaid are morally wrong and politically suicidal."

• Selena Simmons Duffin (16:18): "Voters are paying attention to Medicaid and they like it. It's a really challenging political problem."

This episode provides a comprehensive analysis of the GOP's tax bill's Medicaid cuts, elucidating the complexities and broader ramifications through expert insights and informed discussion. For listeners seeking to understand the nuances of this policy shift and its potential impact on the American healthcare landscape, this episode serves as an essential resource.

Transcript

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[Nina]

Hey, this is Nina from Dallas, Texas, and I'm currently on my way to the airport to celebrate my graduation from the SMU Cox School School of Business, where I got my MBA while working full time and going to school at night. My husband is treating me to Scotland, England and France for the next two and a half weeks, and I fully plan on soaking up this holiday in the sun.

[Deepa Shivaram]

This podcast was recorded at 1:07pm on Wednesday, May 28, 2025.

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[Deepa Shivaram]

Congratulations. Ponies are what did she say? SMU Go Ponies. I've never heard that one, but I'm here for it. Hey there. It's the NPR Politics Podcast. I'm Deepa Shivaram. I cover the White House.

[Deirdre Walsh]

I'm Deirdre Welsh. I cover Congress.

[Deepa Shivaram]

And NPR health policy correspondent Selena Simmons Duffin is with us today. Hey, Selena.

[Selena Simmons Duffin]

Hi.

[Deepa Shivaram]

All right. So today on the show, we're talking about what the congressional spending bill that House Republicans passed already would mean for programs like Medicaid. And Selena, I'm going to start with you can be a complicated topic, but let's just do some, like, big picture explaining here. What is Medicaid? Who qualifies to get it?

[Selena Simmons Duffin]

Okay. So just in case anybody's confused about this, Medicare, Medicaid, different programs. Medicare is the program for people who are 65 and older. Medicaid is the program for anyone low income across the country. And it's a really different system. It's actually a shared program between the federal government and the states. And every dollar spent in Medicaid has some coming from states and some coming from the federal government to give coverage to low income people, whether they are kids or everybody else, adults all the way through, elderly people. All in all, 80 million people across the country. So like 1 in 5 people in America rely on Medicaid for health coverage.

[Deepa Shivaram]

That is a lot of people. Okay. And so you're saying one in five people are on Medicaid, which is a large number of Americans, kids, adults, elderly people and how has the program changed over time? I mean, has it expanded? Has it contracted? What does that look like?

[Selena Simmons Duffin]

Yeah. So in 2010, when the Affordable Care act was passed, there were almost 50 million people without insurance across the country. That's a lot, right? So the Affordable Care act did a couple of things to try to get more people covered. And one of the things it did was to say, hey, states, if you expand Medicaid, we will give you a really good deal. We will give you 90 cents for every 10 cents that you spend on this population, the Medicaid expansion population. And that population was adults who were mostly working, very low income, did not have other sources of coverage, and who up until that point, really didn't have any options. So Medicaid expansion became a whole Supreme Court battle. I don't know if you remember 2012, the Supreme Court said, okay, the federal government can't require states to do this. It became optional. But it is such a good deal that states all over the country, red states, blue states, so many states have actually decided to expand at this point. There are only 10 holdout states. Most uninsured people live in those states. But I should say that along with healthcare.gov, the individual marketplaces, and the Medicaid expansion, it really did help the US get the number of people who were uninsured down by a lot. So from 50 million million people when the Affordable Care act was passed, now it's under 30 million. So still a lot of people who don't have insurance in the US but one might say it's progress. Right? Like, having more people having health coverage often means that they're healthier, they live longer. Medicaid pays for 4 in 10 births across America. Right. Like, this is a huge program. And it's also. All of that care for all of those people is really expensive. So it's like we're looking at like, $880 billion a year getting spent in Medicaid, most of that coming from the federal government, and then a good chunk of it coming from state budgets. It's the. The number one item in most state budgets all across the country.

[Deepa Shivaram]

Okay, I want to get to the bill now. And Deirdre, let's bring you in here as well. So this bill that passed in the House, it's a tax bill. There's a number of tax provisions in this. I'm kind of wondering if you could explain why Medicaid is even in this bill, especially because there. There's been a lot of back and forth on whether or not it should be in there in the first place and getting rid of it.

[Deirdre Walsh]

Right. So Republicans are using a process called reconciliation, which lets them pass a big bill basically along party lines and avoid a Democratic filibuster in the Senate. So under these rules, they're coming up with savings to offset the costs of the tax cuts. The bill renews the 2017 tax cuts that were enacted in President Trump's first term to renew those tax cuts and to pay for some additional ones that are in this package. They needed to come up with savings to offset those costs. Getting those kinds of savings just from cutting sort of discretionary programs like education, other domestic policy programs. That's not where the big expenditures in the federal budget are. They are in the health care programs like Medicare, Medicaid, obviously Social Security, the other big entitlement program. The rules around this process say nothing in this bill can touch Social Security. So Republicans looked at Medicaid as sort of the big place where they saw they could take savings. It's also a program which the constituencies of the program may not be as sort of politically active as reliable elderly voters on Medicare are. And I think that Republicans for many years have talked about the need to restructure entitlement programs. And there's been a lot of support in the Republican Party for getting rid of waste, fraud and abuse in federal entitlement programs across the board. And this was sort of the opportunity to target some of that to Medicaid. And as Selina talked about, a big chunk of the savings in this bill come from major changes to Medicaid, who's eligible for the program, how the program is run, et cetera.

[Deepa Shivaram]

Okay, so Selena, if this bill passes as is Medicaid, changes are implemented, who is that impacting exactly? And what does that end up looking like for the population that relies on Medicaid?

[Selena Simmons Duffin]

So the population that's affected by this bill is able bodied, non working parts of the Medicaid population. So as I said, many people on Medicaid are children or elderly, disabled. This is focusing on what works out to be only about 8.8% of everybody on Medicaid. And what it does is it says, I think it's twice a year, you have to show that you've worked a certain amount to be able to hold onto your Medicaid. And if you can't do that, then you lose coverage. And that's where the savings come in. Because if people can't keep up with these requirements to show that they're working, then their going to lose Medicaid and the federal state governments aren't going to have to pay to keep that person covered.

[Deirdre Walsh]

I think the other policy that people critical of this bill have been highlighting is that it changes the way that states can pay for Medicaid in a way that states and rural hospitals argue will force them to cover fewer people. So states now, as Selina mentioned, when they expanded the Medicaid program, got a big chunk of change from the federal government and pay their share. But in order to boost sort of the money they get overall for Medicaid, they have to tax providers. And this bill freezes that because of the complicated way that they finance their Medicaid programs. A lot of red state Republicans, people like Missouri Republican Josh Hawley, argue that the result will be rural hospitals won't get enough money and they will be forced to close. That will affect the people enrolled in Medicaid, but it will also affect people in rural communities that rely on those hospitals for their care, whether it's under Medicare or private insurance. So I think that there is the work requirements and the targeting of people in the program once it got expanded, but there is also just sort of the state, federal formula for how this program really gets implemented around the country that a lot of people argue is going to be changed by some, you know, complicated but very important provisions.

[Deepa Shivaram]

Yeah, definitely some politics of this that we will get into right after the break. More in a moment.

[Selena Simmons Duffin]

I'm Tanya Moseley, co host of FRESH air. At a time of sound bites and.

[Deirdre Walsh]

Short attention spans, our show is all.

[Selena Simmons Duffin]

About the deep dive. We do long form interviews with people behind the best in film, books, tv, music and journalism. Here our guests open up about their process and their lives in ways you've never heard before. Listen to the FRESH AIR podcast from NPR and whyy.

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[Deepa Shivaram]

And we're back. Deirdre, let's get into the politics here. Democrats, of course, are opposed to these cuts to Medicaid. They didn't vote for it in the House bill. But you know, it's kind of interesting because there are a lot of Republicans, you mentioned Missouri Senator Josh Hawley earlier, who aren't happy with these cuts either. How is that sort of shaking out on the Hill?

[Deirdre Walsh]

I think it means that this Medicaid debate will continue to be the center of the debate as this bill goes to the Senate. That is what we're watching. The Senate is trying to pass its version of the package sometime by July 4th and iron out a final version with the House and get it to the president sometime before the August recess. But as you said, there are some Republicans that just don't think that these kinds of changes to Medicaid are what Congress should be doing. I think this says a lot about the politics of this issue, majorly shifting. Not that long ago, there was a House Republican speaker by the name of Paul ryan in Donald Trump's first term in 2017 who talked a lot about the need to get control of the drivers of the debt and reform federal entitlement programs like Medicare, like Medicaid. A lot of Republicans supported those kinds of changes as a way to sort of shrink the federal budget, reduce federal spending on programs and do away with what they continue to say is waste, fraud and abuse in these programs. Sort of a popular refrain back then and still to this day in this bill. I think the thing that's changed is that a lot of people in red states voted for President Trump, support Republicans on Capitol Hill and really like their healthcare program. They value the fact that they are covered by Medicaid. They rely on Medicaid. These are working class voters who, who don't have jobs that offer private insurance. So they are covered under Medicaid. A lot of them are covered in the Medicaid expansion that happened after the enactment of the Affordable Care Act. And that's why the program has really grown so much and why it's become more expensive, because the more people you cover and insure and the federal government offsets the cost of the states, the more expensive it gets. But I think the rub for Republicans is a lot of them have said in the hallways as we've been staking out these meetings, look, 40% of the people in my district are on Medicaid. I don't want to cut Medicaid. I want to preserve the program for the people. It's meant to cover. And that's where the political argument for Republicans is. We should be cutting out waste, fraud and abuse. We should be covering low income, elderly, disabled. But hey, some of these people that are playing Xbox in their parents basement who should be getting jobs, should get jobs to continue earning their Medicaid coverage. That's where they argue the work requirements are appropriate.

[Selena Simmons Duffin]

I think what you're describing as the kind of political rhetoric and that the painting that picture of the 25 year old able bodied man, that's just like playing video games instead of working. Health policy experts have been busy trying to understand what demographic actually would be affected by these provisions. And it is not that person. Okay, so like this study just came out from UMass Boston researchers and they found the average population that would be affected, 41 years old, female, high school education or less, medium individual income of $0. I feel like there's, there's a little bit of a gap between the political picture that's being painted and the, the real world impact. Who exactly would be affected by these prov.

[Deepa Shivaram]

In the meantime, this bill is moving to the Senate where it might see some changes in all of this. What are you watching for with that?

[Deirdre Walsh]

I think that the Medicaid discussion will continue. In addition to people like Missouri Republican Josh Hawley who has said some very strong things about the House bill, he's said that the cuts to Medicaid were morally wrong and politically suicidal, which is what he wrote in New York Times op ed. That's pretty strong language. It's also really strange when House Democrats on the floor are quoting Missouri senators. Senator Josh Hawley, who when he wasn't senator was an Attorney General trying to repeal Obamacare. That's what he ran on before he entered the United States Senate. There are other senators from states that rely heavily on the Medicaid program. People like Lisa Murkowski in Alaska, people like Susan Collins in Maine, Jerry Moran in Kansas. There are a lot of red state Republicans who are comfortable with changes to the program. And a lot of them have publicly said, including Josh Hawley, that work requirements are an appropriate change. But other changes in the program that would affect rural hospitals are things they have a big problem with. And so I see that part of the bill being a problem. But on the flip side, the other problem from this bill in the Senate is other Republicans saying it does not cut enough spending, it is not doing enough to reduce the deficit. And as we talked about earlier, the place that you go for those kinds of significant federal cuts are big entitlement programs. And Medicaid was the one that House Republicans focused on. So where do they get additional spending cuts to get the votes of conservatives while still keeping some Republicans who don't want to change some of these Medicaid programs?

[Selena Simmons Duffin]

The way that Medicaid expansion came to be adopted in a huge part of the country is voters demanded it. You know, like some, sometimes some lawmakers took it up and said this would make sense for our state. But in a lot of places, voters were like, we need this. And so even, even provisions that just affect Medicaid expansion, it's something that voters have shown they're conscious of and in favor of. And in general, Medicaid is very popular. So I think even with this, like slicing and dicing of asking people to cut the rolls directly or cut benefits directly or add co pays, that was another idea that came up. I feel like voters are paying attention to Medicaid and they like it. And so it's a really challenging political problem.

[Deirdre Walsh]

Republicans remember that the last big midterm election that centered on a debate around health care wasn't a great one for them. Back in 2018, Democrats won back control of the House of Representatives, arguing, attacking Republicans for their votes, repealing and replacing Obamacare. That didn't ultimately happen, but the political damage from that debate was really done during that debate. And I think that Democrats see an opening here because they know that their constituents and constituents in red states rely on Medicaid, maybe even to a bigger extent than they did in 2018. I think that the program has clearly covered a lot of people, and they understand that some of those voters are supporters of President Trump's, and they see it as a way to make inroads into a group that didn't support them in 2024. Their argument is if they make this midterm election about Republicans trying to take away your health care to pay for tax cuts for people like Elon Musk, that's something that a lot of voters who rely on this program will remember.

[Deepa Shivaram]

Yeah. All right, well, we'll keep watching to see what happens. Longtime friend of the pod, Selena Simmons Duffin. Thanks for joining us.

[Selena Simmons Duffin]

Thank you for having me.

[Deepa Shivaram]

I'm Deepa Shivaram. I cover the White House.

[Deirdre Walsh]

I'm Deirdre Walsh. I cover Congress.

[Deepa Shivaram]

And thank you for listening to the NPR Politics podcast.

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[Selena Simmons Duffin]

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