The NPR Politics Podcast - Why Medicaid Cuts Are In The GOP Tax Bill

Episode Date: May 28, 2025

Legislation working its way through Congress to codify President Trump's tax cuts would also make big cuts to Medicaid if it is passed. We look into what the bill proposes, and what the impacts would be. This podcast: White House correspondent Deepa Shivaram, congressional correspondent Deirdre Walsh, and health policy correspondent Selena Simmons-Duffin.This podcast was produced by Bria Suggs, and edited by Casey Morell. Our executive producer is Muthoni Muturi.Listen to every episode of the NPR Politics Podcast sponsor-free, unlock access to bonus episodes with more from the NPR Politics team, and support public media when you sign up for The NPR Politics Podcast+ at plus.npr.org/politics.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

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Find us wherever you get your podcasts. 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 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. This podcast was recorded at 1 o 7 p.m. on Wednesday, May 28th, 2025. Things may have changed by the time you listen to this. For now, I'll say au revoir and of

course, go ponies. Congratulations. Nice present too. Ponies are, what did you say, SMU? Go ponies. I've never heard that one, but I'm here for it. Hey there, it's the NPR Politics Podcast.'ve never heard that one, but I'm here for it. Hey there, it's the NPR Politics Podcast. I'm Deepa Sivaram. I cover the White House.

I'm Deidre Walsh. I cover Congress. And NPR Health Policy Correspondent, Selena Simmons-Duffin is with us today. Hey, Selena. Hi. 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 big picture explaining here. What is Medicaid? Who qualifies to get it? OK, 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 one in five people in America rely on Medicaid for health coverage. 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? 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 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 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 four in 10 births across America, right? 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 number one item in both state budgets all across the country. 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'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. 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 healthcare 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 Selena 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. 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? 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 on to 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 they're going to lose Medicaid and the federal state governments aren't going to have to pay

to keep that person covered. 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 Selena 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 complicated but very important provisions. Yeah, definitely some politics of this that we will get into right after the break. More in a moment. 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 in the hell? 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 health care program. They value the fact that they are covered by Medicaid. They rely on Medicaid. These are working class voters 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. I think what you're describing is 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 zero dollars. I feel like there's a little bit of a gap between the political picture that's being painted and the real world impact. Who exactly would be affected by these provisions? 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?

I think 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 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. 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? 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 rules directly or cut benefits directly or add copays, 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. Republicans remember that the last big midterm election that centered on a debate around healthcare 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. Yeah.

All right. Well, we'll keep watching to see what happens. Longtime friend of the pod, Selena Simmons-Duffin, thanks for joining us. Thank you for having me. I'm Deba Shibaram. I cover the White House. I'm Deirdre Walsh. I cover Congress.

And thank you for listening to the NPR Politics Podcast.