In a move that could affect millions of low-income and disabled Americans, House Republicans have passed a budget resolution that could lead to significant cuts in Medicaid.
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The plan includes $880 billion in spending cuts over the next decade, with Medicaid being a likely target.
Medicaid, which costs the federal government around $584 billion in 2024, currently provides health coverage for 72 million people, including low-income families, children and people with disabilities.
Republicans defended the cuts as necessary to eliminate waste and fraud in government spending, though critics warn that this could come at the expense of vulnerable Americans who rely heavily on the program for critical healthcare services.
House Speaker Mike Johnson assured that the resolution won't bring "major structural changes" to Medicaid, but there's still worry about the smaller policy changes that could add up to big savings. Experts caution that past attempts to cut Medicaid funding have led to reduced benefits, with some people losing essential coverage or facing higher costs for care.
If the proposal moves forward, states may struggle to maintain the program. Medicaid is funded by both the states and the federal government, which means that if federal funding gets cut, states could be forced to make tough choices -- like cutting Medicaid further, reducing other programs or raising taxes.
The effects of a per capita cap -- imposing a cap on federal spending per Medicaid enrollee -- would vary by state, with some potentially facing more severe challenges in maintaining their Medicaid programs depending on the mix of enrollees.
States with higher Medicaid spending and more enrollees -- such as California, New Mexico, Arkansas, Louisiana, Kentucky, West Virginia and New York -- would be hit the hardest by federal cuts. These states could face significant financial burdens, with state spending potentially increasing by up to 57% if they chose to offset the loss in federal funding, according to an analysis by KFF.
Alternatively, states might cut enrollment or restrict eligibility, which could result in similar levels of reduced coverage for millions of individuals who depend on the program.
Smaller states with fewer enrollees would also feel the impact, though to a lesser extent.
"Capping federal spending doesn't make health care needs go away," Allison Orris, the director of Medicaid policy at the Center on Budget and Policy Priorities, told NBC News. "It just shifts the risk of higher spending to states and makes states make choices about: do they cut coverage, do they cut eligibility, do they cut provider rates?"
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