The House Republicans’ budget plan calls for billions of dollars in cuts to Medicaid. Some 72 million Americans rely on the program for their health care. What’s next for Medicaid?
Guests
Scott Macfarlane, congressional correspondent at CBS News.
Megan Cole Brahim, co-director of the Boston University Medicaid Policy Lab. Associate professor in the Department of Health Law, Policy, and Management at BU’s School of Public Health.
Transcript
Part I
DEBORAH BECKER: One of the proposals to help fund President Trump’s vast domestic policy agenda is creating a rift among some Republican lawmakers. A House spending blueprint calls for deep cuts to Medicaid, the nation’s health insurance safety net program.
House Speaker Mike Johnson told reporters this month that to pay for things such as tax cuts and increased border security, it makes sense to look at Medicaid’s skyrocketing costs.
MIKE JOHNSON: Medicaid is infamous for fraud, waste, and abuse. By some estimates, large percentages of the dollars that are allocated there are wasted and stolen.
And we do right to go into those programs and find that and show the people what’s happened and make sure it doesn’t happen again. If you’ve eliminate fraud, waste, and abuse in Medicaid, you’ve got a huge amount of money that you can spend on real priorities for the country.
BECKER: Where President Trump stands on this proposal to cut $880 billion from Medicaid is unclear.
He expressed support for the House plan on Truth Social last week, but hours earlier, Trump told Fox News Sean Hannity that he would not support cutting social safety net programs such as Medicaid.
DONALD TRUMP: Medicare, Medicaid, none of that stuff is going to be touched.
HANNITY: Nothing.
TRUMP: You don’t have to. Now, if there are illegal migrants in the system, we’re going to get them out of the system and all of that, fraud.
But it’s not going to be touched.
BECKER: Some lawmakers say maybe not touched, but perhaps there could be other ways to reduce costs, such as requiring Medicaid recipients to work. Still, several Republican lawmakers are squeamish to try to trim a popular program that provides significant health care funding to both patients and medical providers. Eight moderate Republicans wrote a letter to Johnson recently saying that the cuts outlined in the House spending blueprint would, quote, have serious consequences. Missouri Republican Senator Josh Hawley was asked last week if he has concerns about cutting Medicaid.
JOSH HAWLEY: Yeah, I do. I do have concern. I think the president’s right when he says we should not be cutting Medicaid. Work requirements, sure. Yes, I’m all for that. I think probably every Republican is for that. But if we’re going beyond, that’s not a cut in my view. But if you’re going to talk about people who are working and otherwise qualify, if we’re talking about significant benefit cuts, I’d be really concerned about that.
BECKER: And already, there are ads and billboards opposing the House proposed Medicaid cuts and making this a potential issue for next year’s midterm elections. As for the more than 72 million Americans who rely on Medicaid, many are fearful, like On Point listener Lane Russell in Minneapolis. She needs ongoing care after a liver transplant.
RUSSELL: I have suffered from a rare disease called primary sclerosing cholangitis since my early adulthood. It’s usually made me unable to work full time, so I don’t have another way of accessing health care. If I lose my Medicaid I won’t survive a year. I just want to see my kids grow up.
BECKER: The future of Medicaid is what we’re talking about this hour, and we’re having this conversation live on Tuesday morning.
Joining us from Washington, D.C., is Scott Macfarlane. He’s a congressional correspondent at CBS News. Scott, welcome back to On Point.
SCOTT MACFARLANE: Deborah, very good to be back.
BECKER: So explain to us, what would be accomplished, first off in cutting almost a trillion dollars to Medicaid?
MACFARLANE: Yeah, so why are they doing this in the first place?
Why are they jumping off this subway train and grabbing a third rail of supercharged political toxicity. They’re trying to cut hundreds of billions of dollars or find hundreds of billions of dollars in savings because they want to spend money on other things, and they don’t want to inflame the deficit. Because Republicans have campaigned against deficits.
They’d like to expand or extend Donald Trump’s first term tax cuts. That’s going to cost hundreds of billions of dollars. They want to spend money on the border. That’s going to cost billions of dollars. So they got to save it somewhere. And Medicaid is where the money is. Medicaid is where you can find hundreds of billions of dollars.
And that clip you just played from the U.S. House Speaker tells the tale, that getting rid of waste, fraud and abuse can make up money, can save the taxpayers money. Yes, but it can’t save hundreds of billions of dollars. It would save just a fraction of that. Waste, fraud and abuse is a small fraction of the likely expenses on Medicaid.
So they’re gonna have to find another way. And that’s where Deborah, they’re grabbing that third rail with both hands and both their feet.
BECKER: So maybe they don’t want to inflame the deficit, but they don’t want to inflame constituents either, right? There’s a lot of people here who are very concerned about these proposed cuts to Medicaid.
It’s incredibly popular. So do you think this has significant, is this a significant divide among Republican lawmakers?
MACFARLANE: This is the issue. This is the issue that could stall out the plans this week to have a vote to pass the Republican budget, an urgent priority for Republicans trying to move Donald Trump’s agenda forward.
This is an issue that could eventually trigger a government shutdown in mid-March if they tie up things on this issue. This could break down the Republican conference in a way that risks a debt ceiling crisis later this year. It all comes back to Medicaid at this moment, because the fracture is growing.
You have moderate Republicans, the ones who represent districts that are a little more purple, that may have supported Vice President Harris in November. They’re not keen on enraging their constituencies. Then you have the conservatives, those who are always against big budgets, who are consistently against spending too much money, who think these cuts may need to be more ambitious to the budget.
So you’ve got a fracture. And at this moment, with the narrow margins in Congress, especially in the U.S. house, Republicans can only lose one or two votes. And they are at this moment, risking losing people from both sides.
BECKER: Is this proposed slicing of Medicaid, this is the biggest, right? Could this funding be found somewhere else or does it have to be Medicaid?
MACFARLANE: There’s other places that have money. Social Security has a pot of money, likely measurable in the trillions.
BECKER: There’s another non controversial place. (LAUGHS)
MACFARLANE: Do they really want to touch that at this moment? There’s military spending, there’s getting rid of the, extending the Trump tax cuts, raising taxes.
Also, a very politically popular idea. It’s all unpopular. Medicaid at this moment seems to be where the fear is, because getting into the intricacies here, Deborah, what the House Republicans have done in their budget is called for their energy and commerce committee to lop off about $800 billion in spending.
And for the energy and commerce committee, which does have broad oversight, Medicaid is where the money is, and they have not proposed cutting back benefits for people they haven’t formally proposed or codified a proposal to make people do more to satisfy work requirements to get Medicaid. But it seems unavoidable, because the terms waste, fraud and abuse have been thrown around a lot for the last month, but there’s not a sense of how much money that would yield. And all this fraud that is being rooted out of the federal government right now may be a misnomer.
There may be a misuse of that term, because there have been no fraud prosecutions in the last month of people who’ve been fleecing the federal government. They may be equivocating between fraud and things they don’t like.
BECKER: Steve Bannon former Trump strategist and Breitbart executive warned Republicans about Medicaid cuts.
Here’s what he said on a recent episode of his War Room podcast.
STEVE BANNON: Medicaid, you got to be careful because a lot of MAGA’s on Medicaid. I’m telling you, if you don’t think so, you are dead wrong. Medicaid’s going to be a complicated one. Just can’t take a meat axe to it, although I would love to.
BECKER: That was a former Trump strategist, Steve Bannon, on his podcast.
And so people are well aware that this is a difficult issue and getting any Medicaid cuts through would be very tough. But it looks as if that may be really one of the few options that they have, if they’re going to carry out this domestic agenda of the president. Is that right?
MACFARLANE: Yeah. They’re going to have to find the money somewhere to satisfy their own membership and Medicaid’s where the money is. But Medicaid is not a blue state, red state type program. It is popular. It is used everywhere, which means they’re going to find irate constituents. And you don’t have to go very far back, Deborah, to find the political ramifications of messing with people’s health care.
Go back to 2010, when the Affordable Care Act was emerging from the Obama administration. Republicans won dozens of Democratic seats in those midterm elections campaigning on preserving health care. 2018, Democrats ran this playbook, in the first Trump term that Trump was messing with their health care, and they won dozens of Republican seats in some particularly red areas of the country.
You can just see in 2026 how Democrats would leverage these cuts in Medicaid to win back control of the House. And though that seems far off, that could take a meat cleaver to the Trump agenda in this term.
BECKER: Could the House do what the Senate has done? Divide it? … Kind of put off on any discussion about the difficult issue of cutting Medicaid for the moment.
MACFARLANE: They could. They could reconfigure things. They could find a way to find savings elsewhere. But these Medicaid, these potential Medicaid cuts would be devastating if they pop up anytime between now and 2026 politically. If they find a way to slow the roll here, sure, that makes the coming months a little easier for them.
But if they have to get there eventually to save the money that their conference is requiring them to save, the closer and closer they get to 2026, the more politically injurious it is. And to be clear, the people making the biggest vocalized protests right now among Congressional Republicans are those facing the toughest reelections.
Not because they’re necessarily concerned about their reelections, but they’re reflecting the views of their constituency, a more moderate constituency in places like Northeast Pennsylvania. Omaha, Nebraska. Long Island. California, where there are Republicans in districts that could swing blue at a moment’s notice.
BECKER: So where does this stand now? We’re calling it a blueprint, right? The House blueprint. What’s going to happen next? And will President Trump have to get involved?
MACFARLANE: There are so many political hurdles between now and this thing becoming law. There are a lot of inflection points for President Trump to get involved or for this thing to fall off the train tracks.
If the House passes a budget that includes potential cuts to Medicaid, a similar plan has got to pass or be married with whatever the U.S. Senate does. Then that thing’s got to get signed by the president. There are steps and there are hurdles. There are off ramps for this thing to get off the tracks. But, that being said, all of this is a prelude.
To another fight that’s going to impact Americans. Not to minimize this particular issue with Medicaid, but this is a warning sign, Deborah. Come March 14th is a deadline for a government shutdown. Republicans still face fractures in their caucus, and it could derail the government in about three weeks.
Part II
BECLER: We’re talking about Medicaid this hour and potential cuts to the program. It’s causing a lot of debate in Congress and a lot of concern among folks who are worried about potential cuts to their health care. We asked On Point listeners about this, and On Point listener Sarah in Fayetteville, Georgia says, on the surface, a proposal that maybe would add work requirements to Medicaid might seem reasonable, but she’s worried about her son.
He has severe colitis and mental health issues.
SARAH: Now, in my son’s case, he not only has delusional thought, he also has this severe colitis. He has to get an infusion at least every other month, at the cancer place, even though it’s not cancer. And it costs up to $200,000 a year for this infusion.
So how in the world would he paid for that if he had to work? Do you think people with psychosis can really work and hold a job?
BECKER: Another On Point listener, Deanna Kepler, works as a case manager for people with developmental disabilities and she is also opposed to this suggestion of cutting Medicaid to fund tax cuts and other parts of the president’s domestic policy agenda.
She says it won’t work to cut benefits like that. Social Security, Medicare, or Medicaid.
DEANNA KEPLER: Our government is forcing people with disabilities to be absolutely living in poverty to receive the care that they receive. With inflation in this country, it is absolutely unlivable. I think we need to cut the abuse toward disabled community by our government so that they can have a safety net if something goes wrong.
BECKER: There are also concerns about what this might do to long term care and care for seniors. Ted, who’s an On Point listener in Seattle, Washington, says his mother is in her 80s, she has Alzheimer’s disease, and lives in an assisted living facility.
TED: Her assets are almost drained to zero at this point.
Our only hope of being able to continue paying for assisted living is through Medicaid. This point may get overlooked. Yes, Medicaid is for poor people, but a lot of seniors, after they retire and use up their income, I mean their assets, on something like dementia, are also poor. If there is a work requirement, seniors with dementia simply cannot work.
BECKER: A lot of feedback there from On Point listeners who are concerned about this proposal to potentially cut Medicaid to fund other programs. Scott MacFarlane is with us. He’s a congressional correspondent. And Scott, I’m going to ask you to hold for a minute because I want to introduce Megan Cole Brahim.
She’s co-director of Boston University’s Medicaid Policy Lab and associate professor in the Department of Health Law Policy and Management at BU’s School of Public Health. She’s with me in the studio. Welcome to On Point, Megan.
MEGAN COLE BRAHIM: Thank you for having me.
BECKER: A lot of comments from our listeners there, and let’s start with Ted, who we heard in Seattle, Washington, who talked about Medicaid, a lot of people thinking Medicaid is for poor people, right?
And this is a program that has expanded enormously since it was signed into law in 1965. So I wonder if you can explain, what is Medicaid? Who would be affected here if in fact there had to be cuts made to Medicaid?
BRAHIM: Sure. So as you’ve said, Medicaid is our health insurance program for low-income Americans.
It covers over 72 million people across America, and that really translates to about a quarter of all Americans being enrolled in Medicaid. So it covers about half of all children, it covers nearly half of all births, it disproportionately covers persons with disabilities, low-income elderly, people needing long term care.
It’s also the single largest payer for mental health services and for long term care services. So the program really has wide reach. It affects lots of people and it’s very politically popular. So it isn’t just this program to be a safety net for folks who can’t afford health care. It’s way beyond that.
It fills in the gaps not just for people who can’t afford health care, but provides services that aren’t otherwise covered by people’s health care.
BECKER: So I wonder this argument about waste. We heard Speaker Johnson saying that there’s a lot of waste here. We’ve been hearing this from the president and from others in the administration that they need to look at this huge amount of money spent on the Medicaid program.
Is there an argument to be made? I think I read some folks saying I think Senator Roger Marshall. He’s a Kansas Republican, he’s also a physician, and he says he’s seen firsthand that there’s an awful lot of waste in Medicaid. 50%, he thinks, of the spending on Medicaid is fraud and incompetence.
So do you think there’s any sort of truth to those numbers, or is there some amount of fraud that could be rooted out and save the government some money?
BRAHIM: Sure, we hear this argument a lot, and I think it’s important to note that it’s very difficult to both define and measure fraud, waste, and abuse, there just really aren’t any great or valid estimates out there, that 50% is certainly not a valid estimate, but what we do know is that every year, as required by law, we measure what’s called the payment error rate in Medicaid, that rate is about 5%, that is not fraud, waste, or abuse.
It’s error, which could be, for a number of reasons, including kind of lack of documentation around eligibility, but that percentage really wouldn’t get us to anywhere near kind of the level of savings that they’re implying that we could have through reducing fraud, waste, or abuse. But because we have lawmakers saying things such as 50%, you’re saying 5% in terms of payment error.
Is there something in the middle there that maybe a payment error calculation doesn’t catch?
BRAHIM: It could, but I just haven’t seen any valid data that otherwise suggests that fraud, waste, and abuse is at that scale. I think there are kind of opportunities for reducing administrative waste.
In some ways, that’s at odds with some of the proposals that I think Republicans are discussing, as we talk about administrative burdens that we may need to implement. For example, in implementing work requirements, which actually requires a lot of administrative spending in order to monitor those things.
BECKER: Let’s talk about that because that is a proposal that has gone forward in other states. If there were a so-called work requirement, what would that mean? And what does it look like in some of the other states, and what do we know about whether that’s an effective way to reduce Medicaid costs?
BRAHIM: Sure. So I think the most important thing to note is that 92% of able bodied Medicaid enrollees either work or they have caregiving responsibilities or perhaps they’re in school. So there’s very few people who are currently enrolled in the Medicaid program who could work, really not a lot of opportunity for gain, but what that would do is that it would impose a reporting requirement for all enrollees to document a certain number of worked hours on a regular basis.
In Georgia, for example, which is the only state that currently has a work requirement in place, at first, they required enrollees to document their hours every month. There were a lot of technical glitches with that. It was very confusing. It was very difficult for people to report their hours.
And as a result, we’ve seen a lot of administrative spending on trying to track and build the systems to just understand if people are working. And also, we’ve seen that enrollment in those programs has been very low.
BECKER: And what does it do to the number of people insured?
BRAHIM: It will reduce the number of people insured significantly to the extent that it imposes administrative burdens on people remaining enrolled in their coverage.
BECKER: Are there lessons from other states that have tried the work requirement issue, and it hasn’t gone successfully. And what can be taken from that?
BRAHIM: So we know a little bit. So a number of states have proposed to do this, but we really only have seen this play out somewhat in really two states. In Arkansas, back in the first Trump administration, we saw about eight months of work requirements being implemented.
What we saw in that state was that many people were disenrolled because of the work requirement, in large parts part because of the administrative burden and confusion around reporting worked hours. The other state is Georgia so through their Pathways to Coverage program, which is currently being implemented.
What we’ve seen is that enrollment in their Medicaid program through this expansion that includes a work requirement has been very low. It’s actually cost the state a lot of money, and because of that, they’re really rethinking how they’re doing this. They’re realizing that they really can’t ask people to report their working hours every month, because of the administrative burden that comes with that, and we just haven’t seen any evidence that it’s resulting in anything positive.
We see reductions in health insurance, and we don’t see any evidence that it’s otherwise increasing participation in the labor force.
BECKER: And so the research on work requirements thus far does not show that it actually either causes people to work or reduces costs.
BRAHIM: Yes, absolutely. There is no evidence that work requirements either improve labor participation and we know that they reduce health insurance.
Are there other ways to potentially reduce costs, if you didn’t have work requirements. What would be some of the other ways that might be less painful? Has anyone come up with a brilliant solution there?
BRAHIM: I don’t think there’s any golden ticket. I think there’s a lot of things that we can do to try to be smarter about Medicaid spending, which I think is particularly important at the state level because we know for every dollar we spend on Medicaid, that’s a dollar that’s not spent on something like K-12 education.
So while it’s important that we are continuing to provide benefits for as many people as we can. I think there are some small things that we can do. We’ve seen some shifts to more value-based payments, for example. I don’t think that’s the answer to completely reducing costs, but moving away from what’s known as a fee for service system where you pay a set fee for every service received, and instead move to a different kind of financing model, that pays on a more kind of predictable basis per patient.
BECKER: And there has been a proposed cap on the amount enrollees could receive. Would that be effective at all?
BRAHIM: So that’s a bit different than what I’m talking about, but yes that’s one of the major proposed changes that would go into place in order to achieve some of these cuts where right now there is no federal ceiling on the amount of money that you can spend per Medicaid enrollee.
So right now, it’s financed through both state and federal dollars. There’s a federal match. It depends on the state and the population, that goes to the state to pay for those costs. So with a per capita cap. Essentially, what it would do is it would cap the amount of dollars that you could spend per person.
We don’t know exactly what those caps would look like, but it would really have devastating consequences for both enrollees and for providers. So on the enrollee side, if we limit the amount of spending per enrollee, what that means is that for certain benefits, particularly optional benefits, things like prescription drugs, physical therapy, dental services for adults, vision services, certain mental health support services, those things could all be cut or significantly reduced in order to get spending down and make it so that states could afford care.
BECKER: So let’s talk a little bit about, I know it’s really complicated.
It depends on a lot of factors, but generally speaking, when we’re talking about Medicaid state dollars and Medicaid federal dollars, if there’s a reduction in Medicaid federal dollars, what does that mean for states? They just pick up the slack or it’s a little, I know it’s more complicated than that, but would states be detrimentally affected here?
If in fact federal dollars for Medicaid are reduced, would they have to pick it up?
BRAHIM: States would be detrimentally affected. States could compensate in some ways. So if they could raise taxes to try to mitigate some of that impact, but there’s just not really a viable path to replacing the federal dollars with state tax dollars, particularly because states have to balance their budgets every year.
It’s harder to navigate that kind of budgetary decision. So states could pick up a little bit of it, but ultimately, I think they would need to make really catastrophic cuts in order to compensate for some of the federal cuts.
BECKER: And I wonder, it’s not just people who might lose their health insurance, right?
And have really devastating consequences. If in fact they aren’t insured, for various health events. It’s also health care providers, explain what we know about the amount of Medicaid funding and how health care providers, hospitals, especially I’m hearing rural hospitals. How they might be affected if this budget proposal goes through or some form of it goes through?
BRAHIM: So this really would have wide reaching implications for lots of providers, particularly providers that disproportionately serve Medicaid patients, including safety net hospitals and systems and community health centers. As we implement cost cuts to Medicaid, what that means is that these providers are receiving less patient revenue.
Their uncompensated care costs are going up, and in turn, they’re going to have to make decisions. That may mean reducing certain lines of service that may not be high profit, like obstetrics care, for example. It may mean reducing staffing. It may mean closing certain sites altogether. For rural hospitals, we’ve already seen a lot of closures.
A lot of them are on the brink of closure now, and in fact, we’ve seen that Medicaid expansions under the ACA really help to mitigate some of those impacts on both rural hospitals and other types of community providers that serve a lot of Medicaid patients. Scaling back any kind of eligibility or funding would really be detrimental to those providers, who are already on the brink of closure.
And I think for community health centers and safety net hospitals in particular, those groups already serve lots of Medicaid patients and would have to cut significant services.
BECKER: And potentially health care facilities will close.
BRAHIM: Absolutely. Absolutely. And we’re already seeing a lot of health care facilities, even with the uncertainty, thinking about what to do, reducing staffing.
And we’re hearing reports of clinics closing across the country.
BECKER: We always hear that reimbursement rates are low, right? Health care providers are always saying the Medicaid reimbursement rates are too low. We’ve seen healthcare systems fail and they’ve blamed the low reimbursement rates.
At the same time, we’re seeing the ballooning costs of this program that pays these rates that folks say are too low. What’s happening here? What does that say about how our healthcare system in general is funded? I think it raises big questions.
BRAHIM: It’s a big challenge. So Medicaid pays a lot less per service compared to Medicare, and particularly compared to commercial providers.
Those rates are already low. It means that a lot of those providers already may not be accepting Medicaid patients, or they may not accept many Medicaid patients. So the extent to which per capita caps may result in lower reimbursement rates, I think we’re just going to see that workforce and that network fall apart even more.
It’s really difficult to get care if you’re enrolled in Medicaid, particularly certain kinds of specialty care, psychiatry care, for example. Very few psychiatrists accept Medicaid as a form of insurance. So I think access to services will really be detrimentally impacted if those reimbursement rates are further lowered through this.
BECKER: And it’s clear though that some kind of reform must be needed. It’s a system that isn’t working well at the moment.
BRAHIM: There are certainly needs for reform. Nothing is perfect, but I think … Medicaid is very popular. Access to health care, I think, is an essential first step in providing access to quality services.
I think protecting access through spending is something that we have to think about how we value that as a society, so there’s certainly ways we can improve the delivery of care and think about creative ways to rebalance care, perhaps more spending on primary care and on behavioral health services to really ensure that we’re being smart about access.
BECKER: And just in the last minute before we go to a break. Do we know that more Medicaid spending improves people’s health?
BRAHIM: We see lots of evidence that expansion of Medicaid results in improved health. So under the Affordable Care Act there’s been a very large body of evidence that has suggested that because of these expansions and expanding eligibility and spending on the Medicaid program, in turn has significantly impacted quality of care, it’s impacted access to care, critical prescription drugs and lots of health outcomes.
Part III
BECKER: We’re talking about Republican plans for Medicaid and the potential for deep cuts to the program. It’s striking a nerve with a lot of people. We asked On Point listeners to weigh in on this, and we heard from Susan Murphy. She has a son with disabilities. She lives in Wisconsin.
She says her son gets food benefits and Medicaid, but she still has to help make ends meet, and she’s worried about potential reductions in his care.
SUSAN MURPHY: I don’t know how they’re going to cut. Medically, he is at risk, diabetic too. He’s overweight, and he has had thyroid cancer. I can’t imagine what they’re cutting, because in my opinion, he lives pretty minimally and can’t make it every month.
We have to give him help.
BECKER: And Janet Johnson is an On Point listener and senior citizen in the Twin Cities area, and she has cancer.
JANET JOHNSON: I don’t know how I would be affected by $880 billion in Medicaid cuts, but I know it would be bad. I don’t know if I could get my cancer care or not.
It’s really an astounding thing to think that this $880 billion, it’s going to go to a few very wealthy people in corporations.
BECKER: Those are On Point listeners weighing in on the plan to cut Medicaid to help extend President Trump’s tax cuts and pay for other parts of his domestic policy agenda.
We’re talking about this hour with Scott MacFarlane, who’s congressional correspondent at CBS, and Megan Cole Brahim, who’s an associate Professor in the Department of Health, Law, Policy, and Management at Boston University School of Public Health. She’s also co-director of the BU Medicaid Policy Lab.
And I want to go back to you for a minute here, Scott, and obviously this is hitting a nerve. We’ve heard from so many On Point listeners who are talking about this and talking about using Medicaid funding to help extend tax cuts. We heard from another listener, Jan in Maine, who said a grasp of the obvious here would be to have rich people who do not pay taxes, pay fair taxes, stop giving them cuts, and do not cut these programs that hurt the vulnerable.
So there’s a lot here for lawmakers to face in this potential reduction of Medicaid. Do you think that lawmakers realize that this is really a difficult issue, and they may not, in fact, listen to President Trump here and give him the necessary funds he needs for other parts of his agenda?
MACFARLANE: It’s not so much they think this is a politically toxic issue. Deborah, they know this is a politically toxic issue. They hear from their constituents, the same callers whose clips you just played are calling their members of Congress and saying the same thing, but Megan touched on something that was so critical. That, for example, these work requirements may not save money, but for members of Congress at this moment in time, it’s not so much will it save money, but can you say it might save money, because they’re not necessarily trying to make a huge dent in the deficit.
They’re trying to say they’re trying to make a huge dent in the deficit, to gather and galvanize the support to make these things happen. So if they say work requirements could offset the deficit, it doesn’t so much matter at this moment to get the votes whether they actually will.
BECKER: I see. What about increasing the debt ceiling?
How would that go over?
MACFARLANE: Let’s start with how potentially devastating that is just flirting with breaching the debt ceiling. As was the case in 2011, dinged the U.S. credit rating. Caused a hemorrhaging on the stock market and real impacts on our wallets. That was just a close call. If they actually breach the debt ceiling, it’s unclear just how devastating it’ll be to the economy, to all of our lives.
But the experts say it certainly will be devastating to the economy, in all of our lives. And this is potentially the most underreported story in Washington right now, Deborah. They’re nowhere on figuring out how to raise the debt ceiling when it’s due, likely in the late spring, because Republicans, a number of them on principle never vote to raise the debt ceiling.
They just won’t do it on principle, and they won’t bend off of that, which means you’re going to need some Democrats to join them. If it hasn’t been clear over the past few weeks, the President and Republicans haven’t just burned bridges to Democrats. They have napalmed and incinerated the bridges with Democrats.
So getting them on board is going to require something. And potentially that something is sparing these Medicaid cuts.
BECKER: Remind us of how much money is needed here and what it’s needed for. We’re hearing a lot about tax cuts and folks worried that money from Medicaid is going to go pay for tax cuts to billionaires.
Explain the tax cuts that need to be funded and other things that need to be funded out of this budget. How much are they looking for to begin with?
MACFARLANE: These tax cuts, which passed in the first year of the first Trump term, come due at the end of 2025. Think of the Christmas, New Year’s as the deadline for those.
If those are not extended, there will be a tax increase in any number of Americans and corporations, which could impact the economy. Certainly, be politically unpopular, whether they do or not. They need to extend those tax cuts in the minds of the congressional leaders. But to do that means assuming trillions more in national debt.
And that’s a non-starter for the president’s party. They’ve got to find ways to offset it or at least signal they’re trying to offset it. And that’s where this whole Medicaid thing comes from. This idea of starving some money for Medicaid, because that’s where the money is. The money is not in making cuts to a few thousand workers at the VA, or a few hundred workers at the State Department.
That doesn’t save you billions of dollars. Medicaid, Social Security. That’s where the money is.
BECKER: So this is maybe an opening to other entitlement program cuts?
MACFARLANE: They’re no easier than Medicaid. If you try to get into Social Security, you get the same kickback, if not more vitriolic kickback, because these types of programs are universal in America.
They don’t just benefit small towns or big cities. They don’t just benefit the suburbs or rural America. They benefit everyone. So everybody has skin in the game. And you can just see the toxicity of this idea, not just based on the calls we’ve heard, but you’re going to hear this at town hall meetings members of Congress held, and by the way, some of those have gotten off the rails in the past few weeks.
So much Deborah, I think we’re going to see fewer and fewer town hall meetings at all, because members don’t want to expose themselves to that type of vitriol.
BECKER: And just if we go back a minute though, it’s also, isn’t it helping to fund the president’s promise to say, eliminate taxes on tips, overtime pay, things like that as well.
MACFARLANE: And I think the campaign trail, there was some reference to some type of tax benefit or reimbursement for IVF treatments. All of this money ends up accumulating. No taxes on tips impacts the treasury. So this is why trillions of dollars are needed. And why Congress is going to find themselves log jammed, if not today, later this week or later this month, which is why I keep bringing this back to the two things Congress has to do in the next few months.
A log jam Congress is in danger of the government shutting down March 14th. And that debt ceiling crisis we talked about.
BECKER: And of course this is a political issue. So let’s go back to the politics a little bit. Yes, town halls. There were all sorts of controversies at lawmaker’s town halls.
Maybe we will see fewer of them because people are very concerned about what’s happening in Washington, D.C. right now. But also, there are already ads about Medicaid funding that have come up. The advocacy group. Protect Our Care is running TV and digital ads in 10 key congressional districts, calling on lawmakers to reject Medicaid cuts.
Here’s a clip from an ad that’s directed at Republican Representative Mike Lawler of New York’s 17th district.
AD: We’re talking veterans, seniors, kids with disabilities, everyday working people. all losing their health care while Congress passes another tax break for billionaires. Congressman Lawler, we’re counting on you to be there for us and to stop these cuts to Medicaid.
BECKER: Scott MacFarlane, so looks like the ads are already up and running and making sure that lawmakers know that this is a political issue. So we will see this, don’t you think as an issue that could affect the midterms?
MACFARLANE: Especially for somebody like Congressman Lawler, who aspires to be potentially New York’s governor.
I’m less cynical than others who cover the Capitol. I don’t always believe there’s a political motivation for members of Congress. I think that there is a frustration when they get that kind of a kickback from their constituents, those ads. They have a concern they’re not really representing their constituents accurately.
If your constituents are yelling at you at a town hall meeting, you’ve done something that didn’t represent them properly, and they feel like they’ve lost something or they’ve failed in some way. But the members of Congress who have oversight over Medicaid, those on the Energy and Commerce Committee, they’re familiar with the types of research Megan has done wonderfully at Boston University, they know some of these dynamics, they’ve studied it.
They recognize not just the political peril, but the difficulty in actually cutting it back. These ideas that are passable politically don’t actually save money or do negatively impact those who suffer food and housing insecurity. That’s why they’re jammed up too. They recognize these solutions may not actually be solutions.
BECKER: So how does the White House navigate all this?
MACFARLANE: The White House is ultimately going to decide this, because even if they can get something through the House and the Senate that impacts Medicaid, the president still must sign it for it to become law, which means he takes ownership of this too.
And he takes ownership of this, as Steve Bannon warned earlier in this program, in that clip, he takes ownership in MAGA communities where Medicaid is critically important, and areas that overwhelmingly voted to elect President Trump. This is still, as we open the conversation, Deborah, the third rail, and everybody is flirting with grabbing it, not with one hand, but with both.
BECKER: Megan Cole Brahim, I wonder, have we ever been at a point like this in the past where we’ve seen proposals for significant cuts like this to Medicaid and that have been widely supported by the president, who may end up determining what happens here.
BRAHIM: Not in recent time, under the prior Trump administration, we did see a lot of discussion about a lot of the same cuts that we’re talking about now or the changes around per capita caps or block granting Medicaid programs. There was a lot of discussion and some implementation of Medicaid work requirements, but no recent proposals that have been this extensive and that would be this catastrophic.
BECKER: And so it’s never had to be a vote before, it’s never gone forward before. So this would be something completely new for Congress to deal with.
BRAHIM: And I think too, because the Medicaid program has expanded so much over the last decade, in part through the ACA’s Medicaid expansion, we now have a program that’s bigger than ever. So there’s just that much more to lose. And one of the proposals here is scaling back that specific Medicaid expansion program.
BECKER: And the work requirement, it’s my understanding that in order for that to happen, it isn’t as if, and this is what we learned from the Trump administration the first time around, it isn’t as if there needs to be a federal change.
What needs to happen is states get waivers to allow this to go forward. That could still happen, isn’t that right?
BRAHIM: And it probably will happen. On one hand, you could have federal legislation, but what has been happening is that each state can decide to ask the federal government to waive the standard requirements that would allow them to implement Medicaid work requirements.
And we already have a lot of states that are putting forward those waivers.
BECKER: And I guess to you, Scott, and your point that it isn’t necessary, it isn’t necessarily that cutting this program would save money, but what has to happen for the lawmakers involved here for the political argument is that they have to say they’re trying to save money.
MACFARLANE: They have to forecast they’re saving money. Obviously, the money doesn’t get saved immediately when you make adjustments to programs and that forecast is what helps you get over some of those conservative members who may not vote for anything unless it does impactfully adjust the deficit. And whether it does or not, they can at least forecast it does.
And that’s a political tool both parties use regularly. And that’s one, I think, is going to be employed here.
BECKER: Now, we briefly spoke at the beginning of the show about the difference between the Senate and the House and what they’re doing here. I wonder if you could explain that a little bit and what might happen in reconciliation.
And really, is this something that is going to go forward? What are your thoughts?
MACFARLANE: Reconciliation is one of those frustrating Washington words that’s actually simpler than you think. It means that they can pass something through this very arcane budget tool called reconciliation without needing 60 votes in the Senate, which means you don’t need any Democrats to support any of it.
You can do this on a party line vote, which is rare in the U.S. Senate. They’re trying to find this reconciliation path forward. The Senate has an idea for it. The House has an idea for it. They’re both run by Republicans at this point. The Senate idea is a little more conservative, takes a little more time, a little easier perhaps to swallow this medicine in two different doses.
The House is trying to get it done faster in one big dose. Both have their downsides. Both are going to have to come up with the same plan eventually. And there’s a little bit, Deborah, there’s a little bit of a race to see who can please the president more and get theirs done first.
BECKER: But a party line vote.
It looks like this is really a bipartisan controversy. So how likely is that to happen?
MACFARLANE: I don’t know how they’re going to get this done. Or keep the government open March 14th. And there’s many days we don’t know how Congress is going to do something, but boy are we close to that deadline to be saying things like, I don’t know how they’re going to do it.
And I don’t. They are lost right now. And they’re going to have to find themselves in a matter of days.
BECKER: And I wonder, Megan, how do folks prepare for this? For these potential cuts, especially providers who have to worry about what might be happening in Washington and how that might affect their bottom line and their ability to operate.
If you say so many of them might face closure.
BRAHIM: Right? I think everybody’s nervous and waiting to see what’s happening. But I think in the meantime, I think there it’s freezing a lot of some of the forward momentum that might be happening with some of these providers. I think expanding service lines is something they’re probably not thinking about right now.
If anything, they’re trying to really protect their staff as is, and I think they know they may very well face staff layoffs and site closures if some of these cuts go forward. At the same time, some of these providers like community health centers are also being hit by potential cuts to federal grant funding freezes.
So they’re really being hit in two ways that could really be just devastating to their ability to provide care.
BECKER: And I guess, Scott, I’ll give you the last word in the last minute here. Is this a standoff or are we going to see a resolution?
MACFARLANE: I don’t see how it’s viable to make massive cuts to Medicaid at this moment in time.
Whether it’s being threatened, whether it’s being forecast, there’s a reason for that. Actually doing it, I don’t see how anybody survives politically in that environment, and that is it, that is the solace those who need Medicaid should take right now.