Republicans Should Stay the Course on Reducing Medicaid Spending

National Review Online

Thursday, May 15, 2025

 

As Republicans look to extend and expand the expiring Trump tax cuts, they are locking horns over ways to offset the trillions of dollars in projected reduced revenue. One of the most contentious issues has been Medicaid spending.

 

Moderate Republicans have been uneasy about tackling Medicaid, and, from the populist right, Senator Josh Hawley has said he was a “no” on the current plan.

 

Medicaid is one of the three largest federal programs. While Medicaid traditionally was thought of as a health care program for individuals living in poverty who are unable to work, Obamacare dramatically loosened the eligibility requirements, which has allowed millions of able-bodied individuals to be added to the rolls. Before Obamacare, Medicaid enrollment was around 57 million, and it is now about 79 million. In 2013, the year before Obamacare was enacted, the federal government spent $265 billion on Medicaid. Last year, it spent $618 billion — well more than double. If it is left untouched, the federal portion of the program will exceed $1 trillion within ten years. This doesn’t even take into account the crippling effect spending has on states, where Medicaid is the largest component of state budgets.

 

Republicans, facing pushback, have already substantially watered down any Medicaid changes. For instance, the bill does not touch the increased federal payments to states to cover the population that became eligible as a result of Obamacare. Nor does it institute caps on the amount of federal money states can spend per Medicaid enrollee.

 

Most of the package from the House Energy and Commerce Committee involves good-government measures to ensure better verification over who is eligible. Under the proposal, there would be a requirement to verify enrollees’ addresses and to make sure the Obamacare expansion population has their eligibility confirmed every six months rather than every year.

 

Other changes should be just as uncontroversial for any Republican and certainly any conservative. The proposal would end Biden-era financial incentives that are designed to get holdout states to agree to the Obamacare Medicaid expansion; reduce federal payments to states whose Medicaid program covers illegal immigrants; and prevent funds from going to Planned Parenthood.

 

Other modest reforms include adding a part-time work requirement (80 hours per month) for able-bodied adults between the ages of 19 and 64 and asking the Obamacare population (rather than previously eligible individuals) to pay up to $35 for some services covered under Medicaid.

 

It’s this last point that triggered Hawley to oppose the bill. He ridiculously described it as a “hidden tax on working poor people.” To be clear, we are talking about Obamacare recipients who are relatively better off than the rest of the Medicaid population and enjoy, on average, about $6,500 worth of health benefits paid for by taxpayers. Is it now the Republican position that asking people who receive generous government benefits to pay a relatively tiny fraction of the cost to access some of those benefits is tantamount to taxing hard-earned money?

 

While some are concerned about the political fallout from the message that Republicans would be cutting Medicaid, polling shows the public is much more receptive to the message that changes are being made to ensure taxpayer dollars are spent more wisely and that able-bodied Americans are asked to work for benefits. Having proven willing to take on water to defend Trump’s unpopular tariffs and the shady Qatari plane gift, Republicans should certainly be willing to take heat for policies they have claimed to support for decades.

 

Republicans have already missed many opportunities to bring federal spending under control. President Trump started his term by disavowing any cuts to the two largest federal programs, Medicare and Social Security. Elon Musk has stepped back from DOGE with the much-ballyhooed effort achieving, at best, a small fraction of the $1 trillion in promised savings. This spring, Republicans sidelined fiscal hawks to pass a spending bill that did nothing to tackle deficits. In that case, at least, they faced the alternative of a government shutdown. They have no good excuse for blowing yet another chance by squandering the opportunity to make even modest changes to Medicaid.