Mar 13, 2025
With the House narrowly passing a budget blueprint that calls for at least $1.5 trillion in spending cuts, fears are being fueled about potential cuts to popular programs like Social Security, Medicare and Medicaid.
The Trump administration, for its part, has asserted it has no such plans. In late February, House Speaker Mike Johnson told CNN’s Kaitlan Collins that the White House made a “commitment” not to touch social programs. “What we are going to do is go into those programs and carve out the fraud, waste and abuse, and find efficiencies,” he said.
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And on March 11, the White House issued a press release, declaring “President Trump will always protect Social Security [and] Medicare” and reaffirming he has no plans to cut Social Security, Medicare or Medicaid.
However, analysts worry there won’t be enough fat to trim from these programs to meet budget cut expectations — here’s what you need to know.
The math doesn’t add up
Medicaid is a joint federal and state program that provides acute, primary and long-term health care services to low-income Americans, including children, seniors and people with disabilities. The program supports more than 70 million people (that’s one in five Americans) at a cost of $871.7 billion annually (as of 2023). Coverage varies by state, both in terms of eligibility and benefits.
The budget blueprint doesn’t specifically mention cuts to Medicaid. However, the House Energy and Commerce Committee (E&C), which has jurisdiction over the program, has been instructed to cut at least $880 billion from its budget.
The committee also has jurisdiction over Medicare, though Republicans have ruled out cuts to that program. By taking Medicare off the table, Medicaid then accounts for 93% of funding under E&C, according to analysis sent to lawmakers by the nonpartisan Congressional Budget Office (CBO).
Recent analysis done by health policy organization KFF backs the CBO’s findings, adding that Medicaid accounts for $8.2 trillion out of the total $8.9 non-Medicare spending in the E&C jurisdiction.
While fraud is an issue — both Medicare and Medicaid are susceptible to improper payments and potential mismanagement, according to the U.S. Government Accountability Office (GAO) — cutting out fraud won’t cover such deep budget cuts. In fiscal year 2023, Medicaid Fraud Control Units (MFCUs) reportedly recovered $1.2 billion in Medicaid provider fraud and patient abuse or neglect, with 1,143 convictions. That’s far from the $880 billion E&C has been instructed to cut.
“The math is conclusive: Major cuts to Medicaid are the only way to meet the House’s budget resolution requirements. There are a myriad of options available for cutting Medicaid, but all of them would leave the states facing difficult choices to raise revenues or cut spending,” according to the KFF analysis.
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Previous proposals have included imposing a per capita cap on federal funding for Medicaid or turning federal subsidies into block grants, which would shift costs to state governments. That, in turn, could increase costs at the state level and result in cuts to eligibility and benefits, according to research from the Center on Budget and Policy Priorities (CBPP).
“Many of those losing Medicaid coverage would be left unable to afford life-saving medications, treatment to manage chronic conditions like cardiovascular disease and liver disease, and care for acute illnesses,” according to CBPP.
Johnson told CNN that per capita caps on federal funding are “off the table.”
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What would Medicaid cuts mean for Americans?
Medicaid reductions would impact low-income and minority populations, which could lead to increased financial hardship and health inequities. Data shows that Americans with the highest reliance on Medicaid tend to live in Republican-leaning states.
The latest KFF health tracking poll finds that most Americans think funding for Medicaid should either increase (42%) or stay the same (40%), while fewer than 17% want to see Medicaid funding decrease. While about half (53%) say they or a family member has received help from Medicaid at some point, nearly all (97%) say Medicaid is at least somewhat important for those in their local community.
But cuts would likely be felt even by those who have never accessed Medicaid supports.
“The impact of national cuts to Medicaid funding would be felt in our economy, our states’ budgets, and our communities. Medicaid is the largest source of federal funding to states and is critical for keeping hospitals and clinics afloat,” according to Partners in Health (PIH).
The impact of cuts to Medicaid on low-income Americans — particularly those in Republic-leaning states — could potentially affect the political landscape in the lead-up to the next election. And that might help explain why politicians like Johnson are treading carefully around how they frame Medicaid reform.
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Vawn Himmelsbach is a veteran journalist who has been covering tech, business, finance and travel for the past three decades. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, Metro News, Canadian Geographic, Zoomer, CAA Magazine, Travelweek, Explore Magazine, Flare and Consumer Reports, to name a few.
