House Republicans have unveiled a proposal to cut Medicaid funding as part of a broader budget plan aimed at reducing federal spending by $880 billion over the next decade. The proposed cuts are designed to help finance a $4.9 trillion tax package, which largely benefits wealthier Americans and includes extensions of the 2017 tax cuts and new deductions.
If it passes, it will be the largest Medicaid cut in history, according to the Georgetown University Center for Children and Families.
Preliminary estimates from the nonpartisan Congressional Budget Office indicate that 8.6 million more people will become uninsured as a consequence of the bill’s Medicaid and ACA marketplace provisions.
The legislation also includes significant cuts to SNAP nutrition assistance, threatening access to food for many Texans. Congressional leaders are aiming to pass the bill through committee this week and bring it to the full U.S. House of Representatives prior to Memorial Day.
One of the most contentious elements of the proposal is the introduction of a "community engagement requirement." This mandate would require able-bodied adults without dependents to work, volunteer, or attend school for at least 80 hours per month to maintain Medicaid eligibility. In addition, the plan calls for more stringent income verification processes and shorter enrollment periods, potentially making it more difficult for individuals to qualify for Medicaid.
According to the Congressional Budget Office (CBO), these changes could especially impact states like Texas — which did not expand Medicaid under the Affordable Care Act. Texas may face financial strain as hospitals and clinics lose federal support. Critics warn that the cuts could lead to hospital closures, particularly in rural areas, and reduced access to essential health care for vulnerable populations, including seniors, low-income families, and people with disabilities.
While many of the proposed cuts are aimed at Medicaid expansion states, the two types of Medicaid cuts in the bill that will most directly affect the current Texas Medicaid program are new limits on provider taxes and additional red tape when Texas children enroll in Medicaid or CHIP or renew their coverage.
Texas uses taxes paid by hospitals as a key Medicaid funding source. Restrictions on state-directed payments and new provider taxes proposed in the bill will disproportionately affect Texas compared to other states, limiting the state’s Medicaid finances and ability to accommodate a growing population, according to the Texas Hospital Association.
Guests:
David Machledt, PhD, is a senior policy analyst at the National Health Law Program (NHeLP) and expert on Medicaid accountability and access. His latest blog, "Medicaid Is Even Leaner as Accountability Improves", explains how Medicaid has made major improvements in transparency and efficiency, countering myths that the program is riddled with waste.
Lynn Cowles, PhD, is Director of Health and Food Justice with Every Texan. She works to increase food security and access to affordable health care coverage for all Texans, regardless of income, immigration status, employment status, education, primary speaking languages, gender identity, or medical history. She is a community health worker and a subject matter expert on the Affordable Care Act, Texas health programs and policies, health education, and health communications.
"The Source" is a live call-in program airing Mondays through Thursdays from 12-1 p.m. Leave a message before the program at (210) 615-8982. During the live show, call 833-877-8255, email thesource@tpr.org.
This discussion will be recorded on Wednesday, May 14, 2025.
