House GOP unveils plans to reshape Medicaid
The bill includes Medicaid work requirements and a crackdown on some ways that states boost funding
By John Wilkerson
May 12, 2025
WASHINGTON — House Republicans are proposing to add work requirements for some Medicaid recipients and to reduce federal Medicaid funding for states that cover undocumented immigrants.
The policies were included in plans for reducing Medicaid spending released late Sunday by the Energy and Commerce Committee. The committee is holding a markup Tuesday of its share of the budget reconciliation package that Republicans are using to pass President Trump’s tax cuts and other legislative priorities. It’s aiming to reduce government spending by $880 billion over a decade to help pay for those tax cuts.
The nonpartisan Congressional Budget Office said Monday that the committee’s bill exceeds the $880 billion target, but hasn’t yet provided detailed estimates on specific provisions. The bill includes measures beyond health care, such as auctioning off wireless spectrum and reversing some Biden-era energy policies.
The CBO released preliminary estimates Sunday that the Republican plan could save more than $700 billion through 2034 from its health care provisions, but that at least 8.6 million people would go without health coverage as a result.
Medicaid is jointly funded by states and the federal government. Overall, Republicans said they would not reduce the amount that the federal government provides to states. But for states that provide coverage to undocumented immigrants, the bill would reduce the amount the federal government pays to cover people who gained coverage under the Affordable Care Act’s Medicaid expansion from 90% to 80%.
Undocumented immigrants are generally not eligible for Medicaid, but some states pay to provide coverage themselves. A committee staffer said the bill would cut funding to 12 states and Washington, D.C., if they continue to provide health insurance to those residents.
The Republican plan also includes work requirements for Medicaid eligibility. While a handful of states have implemented work requirements, this would be the first time that the federal government imposed a blanket work requirement in the health coverage program.
The policy would require that working-age adults without children and who are not disabled document that they work 80 hours a month to maintain coverage. They could also perform community service or enroll in educational programs.
“When so many Americans who are truly in need rely on Medicaid for life-saving services, Washington can’t afford to undermine the program further by subsidizing capable adults who choose not to work,” Rep. Brett Guthrie (R-Ky.), the chair of the committee, wrote in a Wall Street Journal op-ed Sunday.
He said that while “Democrats will use this as an opportunity to engage in fear-mongering and misrepresent our bill as an attack on Medicaid,” the bill “preserves and strengthens Medicaid for children, mothers, people with disabilities and the elderly — for whom the program was designed.”
Democrats, hospitals, and health advocates have been warning about the impact of Medicaid cuts on patients and providers.
“This is not trimming fat from around the edges, it’s cutting to the bone,” Rep. Frank Pallone, Jr. (D-N.J.), the top Democrat on the committee, said in a statement Sunday. “The overwhelming majority of the savings in this bill will come from taking health care away from millions of Americans. Nowhere in the bill are they cutting ‘waste, fraud, and abuse’ — they’re cutting people’s health care and using that money to give tax breaks to billionaires.”
Under the Republican proposal, states would have to check Medicaid enrollees’ eligibility twice a year, up from the current annual determinations.
The bill would also limit states’ use of common tactics, such as provider taxes, to increase funding for their Medicaid programs, by banning new or increased taxes. And it would remove a Biden administration policy around staffing requirements for long-term care facilities.
It’s not yet clear whether House conservatives will back the bill. The bill could be amended during Tuesday’s markup. Then it will proceed to the House floor, if the committee passes it. If it passes the House, the bill would still need to win approval in the Senate, too, where Republicans hold a 53-47 majority.
On Monday, Sen. Josh Hawley (R-Mo.) criticized the idea of cutting Medicaid in an essay for The New York Times. The article didn’t speak to the House bill specifically, but he warned against significant cuts to Medicaid.
“Republicans need to open their eyes: Our voters support social insurance programs,” Hawley wrote.
The bill also includes some changes to Medicare. For the first time, Medicare pay rates to doctors would increase based on inflation. Currently, doctors do not receive pay increases tied to inflation. The bill would increase pay by 75% of the rate of inflation in 2026, and pay rates would increase by 10% of inflation in subsequent years.
Doctors would like pay rates to keep up with inflation. However, Shea McCarthy, a partner at Thorn Run Partners who lobbies for specialist physicians, called the measure “the camel’s nose under the tent” because it gives doctors an opening to lobby for bigger inflationary increases each year.
“This is significant to the physician community,” McCarthy said. “They achieved a policy that was elusive but also was a big priority.”
The bill includes a list of reforms to drug middlemen. It would limit how pharmacy benefit managers can receive money from drugmakers and impose transparency requirements.
