House Republicans aren’t any closer to reconciling the $880 billion dollar question mark that sits at the center of their reconciliation package.
Negotiations over the future of Medicaid are threatening to delay the reconciliation process even further as the party remains divided over the health insurance program that covers more than 72 million Americans.
The Energy and Commerce Committee, tasked with finding $880 billion in cuts, was given another directive Tuesday night by President Donald Trump, when he said Republicans would not cut benefits for “those great people that are in need.”
“House Republicans are working to invest more money in Medicaid than we spend today,” Trump said in the speech.
Republicans are not looking at ways to expand the program but rather debating ways to reduce the federal government’s spending on Medicaid. The committee cannot reach $880 billion in cuts without reducing spending on Medicaid and the Children’s Health Insurance Program, according to the Congressional Budget Office.
“We’re going to spend more money on Medicaid next year and the year after and the year after, spending on Medicaid is going to go up over the next few years,” Rep. Brett Guthrie, the Energy and Commerce Committee’s chair, said Tuesday, hours before Trump’s speech. “The question is, how much is it going to go up? And that’s what we’re working on.”
The government spends more in Medicaid annually in large part due to rising health care costs and increased enrollment during periods of economic turbulence.
There’s been little progress this week on the direction to take the program. Multiple Energy and Commerce Committee members told NOTUS they’re still on track to hit $880 billion in cuts without affecting individuals’ benefits, but didn’t specify how. The full committee is set to meet Thursday morning, as they typically do on fly-out days.
A group of Republicans who have been vocally against Medicaid cuts have met repeatedly with leadership. Some, like moderate Rep. Don Bacon, have set a limit for how much in Medicaid cuts they’d accept. Bacon has said he wouldn’t want cuts to Medicaid to exceed $500 billion.
Rep. Nicole Malliotakis said she doesn’t have a firm number like Bacon, but that his $500 billion maximum “sounds more realistic.”
Malliotakis said she and others don’t want the federal government paying lower rates than what it already does on traditional Medicaid. Those rates vary state by state based on a formula known as the Federal Medical Assistance Percentage, or FMAP. The federal government pays a higher rate in states with lower per capita incomes.
In New York, for instance, the federal government pays the minimum percentage by law of 50%. But in Mississippi, the federal government pays nearly 77%.
Changing the federal government’s contribution to Medicaid wouldn’t technically impact individuals’ benefits, so long as the states make up the difference. But if certain states don’t increase spending to maintain current programs, it could result in individuals losing their benefits. Reducing the federal contribution to states would have a greater effect on states that expanded Medicaid under the Affordable Care Act, the Kaiser Family Foundation found, and decrease enrollment in those states.
One area of agreement between moderate and conservative Republicans has been over work requirements and ensuring undocumented immigrants aren’t receiving benefits. They’re also willing to negotiate on the Medicaid expansion under the Affordable Care Act. The federal government pays 90% of the cost of expansion enrollees.
Rep. Nick LaLota said he has three main changes to Medicaid he’s willing to accept: instituting work requirements for able-bodied adults, moving the registration from every 12 months to every 6 months and barring undocumented immigrants from receiving benefits. He said he’s been told those three changes would amount to $370 billion in savings over 10 years.
When it comes to will cuts beyond that, LaLota said it’s a case-by-case basis.
“We can consider a whole bunch of these different proposals, but the ultimate question that needs to be asked with each of these individual proposals is, are we throwing people off of the program who intended to be the beneficiaries of it?” LaLota said. “If the answer to that question is yes, we should not accept that provision.”
But move to appease one direction of the conference, Guthrie and Speaker Mike Johnson are certain to face blowback from the other side.
Guthrie is set to meet Wednesday night with members of the House Freedom Caucus, who have been adamant they won’t accept a reconciliation package with cuts less than $1.5 trillion.
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Katherine Swartz is a NOTUS reporter and an Allbritton Journalism Institute fellow. Daniella Diaz, a reporter at NOTUS, contributed to this report.