Inside the GOP’s secret plan to destroy Medicaid

You may have heard some of our federal lawmakers attest to their respect for Medicaid and its generally low-income enrollment base.

Listen to House Speaker Mike Johnson (R-La.) on Fox News a couple of weeks ago talking about the need to preserve the state-federal program so it serves “young single mothers down on their fortunes for a moment, the people with real disability, the elderly.”

As articulated by Johnson and other GOP lawmakers, this idea seems pretty unexceptionable. Unless, that is, you examine what’s really behind this declaration of service for the less fortunate among us.

What they’re really talking about is killing the Medicaid expansion that was passed as part of the Affordable Care Act in 2010. They have a plan to do exactly that. It’s not exactly secret, but it’s abstruse enough that they hope most people, who aren’t fully conversant with the complexities of the program, won’t get the drift. So I’m here to explain what they’re up to.

To understand, you have to be aware of two facts. One is that the federal government contributes 90% of the cost of medical service for expansion enrollees.

The other is that the federal match for traditional Medicaid, which principally serves low-income families with children, is lower. It varies state by state and ranging from 50% for wealthier states such as California to more than 70% for poor states such as Mississippi, Alabama and West Virginia.

The idea floating around in the GOP caucus is to reduce the expansion match to each state’s level for traditional Medicaid. The idea can be found in Project 2025 and in a proposal from the Paragon Health Institute, which has been funded in part by right-wing foundations, including the Koch network.

Make no mistake: This is an effort aimed at destroying Medicaid expansion programs. The healthcare of as many as 21 million Americans is at stake; that’s how many people are receiving health coverage via the Medicaid expansion.

“Medicaid expansion is responsible for the largest share of the reduction of this nation’s uninsured rate,” says Joan Alker, a Medicaid and children’s health expert at Georgetown University. That rate fell from 16% when the ACA was passed to about 8% now.

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Not only would expansion enrollees be affected: Medicaid is the biggest source of federal dollars flowing to the states, coming to $616 billion for state and local governments in fiscal 2023, swamping the sum provided by the second-largest program, the federal highway trust fund, which funneled $47.7 billion to them. The match reduction would amount to about 10% of total Medicaid funding per year.

“There would be no good way out of this for any state, no matter how rich or well-intentioned,” Alker told me. “It’s simply too much money.”

Some Republicans seem to understand that implication, as well as the popularity of Medicaid among the voting public. In an April 14 letter to the House Republican leadership, 12 GOP representatives stated that they would not support any budget bill that “includes any reduction in Medicaid coverage for vulnerable populations.”

They were walking on a razor’s edge, however, by also echoing Johnson in endorsing “targeted reforms ... that divert resources away from children, seniors, individuals with disabilities, and pregnant women — those who the program was intended to help.”

Among the signers was Rep. David Valadao (R-Hanford), whose Central Valley district has 139,800 expansion enrollees, one of the largest such cadres in California. I asked Valadao’s office to clarify his position but got no response.

Before delving into how changing the federal match would affect Medicaid, a few more words about the partisan context.

Notwithstanding Republicans’ protestations of reverence for Medicaid, the truth is that they and their fellow conservatives have had their knives out for the program virtually since its inception in 1965. They’ve assaulted it with lies and misrepresentations for years.

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As Drew Altman of the health policy think tank KFF has astutely observed, conservatives’ historical disdain for Medicaid derives in part from the divergent partisan views of the program: “Democrats view Medicaid as a health insurance program that helps people pay for healthcare,” he wrote. By contrast, “Republicans view Medicaid as a government welfare program.”

Thinking of Medicaid as welfare serves an important aspect of the conservative program, in that it makes Medicaid politically easier to cut, like all “welfare” programs. Ordinary Americans don’t normally see these programs as serving themselves, unlike Social Security and Medicare, which they think of as entitlements (after all, they pay for them with every paycheck).

From the concept of Medicaid as welfare it’s a short step to loading it with eligibility restrictions and administrative hoops to jump through; Republicans tend to picture Medicaid recipients as members of the undeserving poor, which aligns with their view of poverty as something of a moral failing.

That explains another frontal attack on Medicaid mounted by the GOP: the imposition of work requirements on Medicaid enrollees. This is a popular idea among Republican lawmakers despite evidence that they fail to achieve their putative goal of encouraging poor people to find jobs.

Only two states implemented work requirements when they were authorized during the first Trump administration.

Both were abject failures. In Arkansas, more than 18,000 people lost their coverage during the nine months the program was in operation, before it was blocked by federal Judge James Boasberg in 2019. (He was upheld by an appeals court, and the matter ended there.)

In Georgia, state officials expected 345,000 people to apply for eligibility under its work rules; by late 2024, fewer than 4,500 people enrolled, in part because the administrative rules the state imposed were onerous. Georgia also discovered a seldom acknowledged reality about work requirements — they’re immensely expensive to administer. In less than a year, Georgia taxpayers had spent $26 million on the program, almost all of it on administration instead of medical services.

Work rules for Medicaid are the product of a misconception about Medicaid enrollees, which is that they’re the employable unemployed. According to census figures, however, 44% of Medicaid recipients worked full time in 2023 and 20% worked part time. An additional 12% were not working because they were taking care of family at home, 10% were ill or disabled, 6% were students, and 4% were retired. Of the remaining 4%, half couldn’t find work and the remaining 2% didn’t give a reason.

The Biden administration killed work requirements for Medicaid soon after it took office.

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That brings us back to Medicaid expansion. The Affordable Care Act used Medicaid to cover the poorest uninsured Americans, those with incomes up to 138% of the federal poverty level, or about $21,597 this year. The federal government would cover 100% of the new expense at first, ultimately declining to 90%, where it is now. A Supreme Court ruling made the Medicaid expansion voluntary for states; as of today, all but 10 have accepted the expansion. In those states, Medicaid eligibility was extended to childless adults for the first time.

That’s the source of the conservative shibboleth that “able-bodied” men and women can receive Medicaid benefits — and of Republicans’ assertion that the new cohort is “draining the resources ... from the people who need it the most and are intended to receive it,” as Johnson asserted on Fox. Johnson’s claim is that the new enrollees “should never be on the program at all” — only the original Medicaid targets are legitimate. However, Congress authorized the addition of those new enrollees via an act that was signed into law by President Obama.

On Fox, Johnson invoked another GOP shibboleth, which is that rooting out fraud, waste and abuse would help keep Medicaid solvent. That’s fantasy. There really are only two ways to extract savings from Medicaid: strip benefits from the program, or throw enrollees out.

Twelve states have so-called trigger laws that would either cancel expansion or require changes in the state program if the federal match rate dropped below 90%. Many others would have no option but to cut their Medicaid programs back if the match rate were cut. As the biggest state, California would be the biggest loser, with an estimated $129.4 billion at risk over 10 years, but every state would measure its loss in the billions, according to estimates by KFF.

Who would be the winners? The millionaires and billionaires who might be spared a federal income tax increase, since the gain for the federal budget would be more than $626 billion over a decade.

Republicans have been remarkably cavalier about the impact of cutting the expansion match.

“Nobody would be kicked off Medicaid, as long as the governors decided to continue to fund the program,” Rep. Austin Scott (R-Ga.) said last week on Fox Business.

That was easy for Scott to say, if outstandingly cynical. Representing as he does the non-expansion state of Georgia, he knows that red state governors like his own would be inclined to simply ax the expansion if given a fiscal pretext to hide behind. The U.S. would fall deeper into a two-tier healthcare landscape, with conservative states cutting healthcare services and blue states trying to hold the line for their residents.

“I’d expect non-expansion states like Florida, Texas and Georgia to fight for this proposal, because they haven’t expanded Medicaid and they wouldn’t be affected,” Alker says.