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Dow Jones NewsMay 12, 1:41 AM UTC
DJ Proposal Cutting Medicaid Aims for GOP Middle Ground -- 2nd Update
By Olivia Beavers and Liz Essley Whyte
WASHINGTON -- House Republicans are releasing their plan to cut Medicaid spending, with the program's defenders in the GOP appearing to win the intraparty clash over how aggressively to change the system that provides health insurance to more than 70 million low-income and disabled people.
A section-by-section summary of the bill text, which was viewed by The Wall Street Journal, includes some of the changes Republicans have weighed for Medicaid, including work requirements and more frequent eligibility checks. But it doesn't lower the minimum share the federal government contributes to Medicaid in each state, cap per-person federal spending in the program or other steps some spending hawks sought.
House Energy and Commerce Committee Chair Brett Guthrie in an interview cast the changes as slowing down runaway growth in Medicaid, rather than as cuts, while warning that the program is going to cost more than $1 trillion a year in the next decade if lawmakers don't rein in spending. The Kentucky Republican acknowledged that Republicans' plan to trim Medicaid spending will likely be more politically palatable to moderates and centrists than to the conservative wing, which wanted a more dramatic winnowing of the program.
"I think that the people who will have the most difficult time with it would be that it doesn't go far enough," Guthrie said in an office boardroom lined with the committee's policy staffers. "We're going to go as far as we can go to get 218 votes."
The panel was set to release the bill text as soon as Sunday night, ahead of a committee hearing on Tuesday. Guthrie's panel has been charged with finding $880 billion in cuts over a decade, but the tally of the planned reductions crafted by the committee wasn't available.
Party leaders want to pass the measure in the House by Memorial Day, along with the rest of President Trump's "big, beautiful" tax and spending bill.
While members of the Energy and Commerce committee say Guthrie has given everyone on the panel a chance to have input in the bill, the chairman is still predicting a series of negotiations with various factions of the party ahead of final passage.
Aside from healthcare, the committee focused heavily on clawing back funding that was directed to clean-energy projects as part of President Joe Biden's Inflation Reduction Act as well as unrelated energy projects, including nixing unspent funds from certain grants and loan programs. The committee is also looking to auction off wireless spectrum, which Guthrie predicted would bring in $88 billion in revenue.
The proposal includes efforts to clamp down on states' use of special tax arrangements to pay their share of Medicaid costs. The Republican plan would freeze at current rates the arrangements known as "provider taxes" and ban states from establishing new ones. The legislation also seeks to ensure only those who are eligible remain on Medicaid rolls, delaying Biden-era rules on looser eligibility checks and blocking federal funds for Medicaid recipients whose citizenship or immigration status is unverified.
The proposal would also require some able-bodied Medicaid recipients -- those making more than 100% of the federal poverty level, or $15,650 for a single adult -- to pay for some of their coverage. The contributions would be capped at $35 a service, or 5% of an individual's income, and wouldn't be required for primary, prenatal, pediatric or emergency care.
The bill includes work requirements -- a policy broadly popular across the GOP -- though not as strict as some fiscal hawks had hoped. It also aims to stop federal dollars from going to facilities and organizations that provide abortion services such as Planned Parenthood, a provision some centrist Republicans have tried to block.
The bill is set to face unified opposition from congressional Democrats, hospitals and other groups that depend on Medicaid funding. They say cuts to Medicaid would devastate state budgets, force rural hospitals to close and leave vulnerable people without coverage.
Rep. Frank Pallone Jr. of New Jersey, the top Democrat on the Energy and Commerce committee, said the GOP proposal is "designed to take healthcare away from millions of people," with the money instead being used for tax breaks for the wealthy.
Medicaid is one of the largest targets in the broader bill House Republicans are looking to pass by the end of this month, which will fund Trump's top priorities. The GOP is using a process called budget reconciliation that allows lawmakers to bypass the Senate's 60-vote filibuster threshold.
While GOP budget hawks are trying to find at least $1.5 trillion in spending cuts over the next decade, with the goal of reaching at least $2 trillion, a bloc of Republicans have vocally warned that deep reductions in Medicaid coverage will hurt GOP voters who depend on the program and hamper their efforts to keep the House majority in 2026.
Trump has promised not to cut Medicaid benefits, but his position on many details has been unclear. Guthrie says his efforts to run through his plan with the president at the White House earlier this month were cut short, given the meeting was running behind schedule. Guthrie did, however, leave the White House meeting with a red "Gulf of America" hat and the president's challenge coin.
The bill would require Medicaid recipients to work, volunteer or attend school for 80 hours a month. The requirement would apply to most able-bodied adults through age 64 without dependents and includes exceptions for pregnant women, people with substance-use disorders and others.
Not included in the bill: Major changes to the minimum share the federal government shoulders for Medicaid, which is also funded by states. Some conservatives had wanted to see the federal government lower the percentage it pays for Medicaid in wealthier states such as California or for able-bodied Medicaid recipients who joined under the ACA expansion.
Per-person federal spending limits for the Medicaid expansion population, considered by the committee as recently as last week, also aren't included.
Additionally, a drug-pricing policy the White House embraced as a way to help pay for Trump's tax cuts isn't making it into the bill. Trump said in a post on Truth Social Sunday night that he would be signing an executive order related to the policy.
The White House's proposal, known as "Most Favored Nation," would have tied the price Medicaid pays for drugs to those paid by other countries, many of which pay lower prices because their single-payer healthcare systems negotiate for deals. The White House's position startled the drug industry, people familiar with the matter said, triggering a last-minute dash by pharmaceutical lobbyists to get Congress to kill the plan.
Write to Olivia Beavers at Olivia.Beavers@wsj.com and Liz Essley Whyte at liz.whyte@wsj.com
(END) Dow Jones Newswires
May 11, 2025 21:41 ET (01:41 GMT)
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