Republicans in the House of Representatives have released their proposal to cut an estimated $715 billion in funding for Medicaid. If it becomes law, the plan would result in 8.6 million more uninsured Americans in the next decade, according to an analysis by the nonpartisan Congressional Budget Office.
Congressional Republicans argue that the cuts are necessary to eliminate “waste, fraud and abuse” and that they offset the costs of what President Trump has called a “big, beautiful” government spending bill that will likely include trillions of dollars in tax cuts.
Health care policy is tremendously complicated, and it can be very easy to get lost in the details, partisan spin and legislative maneuverings. So here’s a simple rundown of what the GOP plan aims to do and what it might mean for you.
What is Medicaid?
Medicaid is a government health insurance program that covers more than 70 million low-income and disabled Americans, about one-fifth of the total U.S. population. It is one of the biggest and most expensive federal government programs. In 2024, Medicaid spending totaled $618 billion, making it the fourth-largest source of direct spending, behind Social Security, Medicare and defense.
Enrollment in Medicaid has nearly tripled over the past three and a half decades, thanks in part to elements of the Affordable Care Act that have helped most states expand eligibility for the program.
Trump has repeatedly insisted that cuts to Social Security, Medicare or the military are off the table. That left Medicaid as the main target for the GOP to meet its spending reduction goals.
What the GOP plan would do
There are two main categories of reforms included in the 160-page proposal.
The first is a suite of new procedural rules that will increase the number of hurdles that people will need to clear to receive or maintain Medicaid coverage. It would create work requirements for able-bodied adults without dependents, who would lose their coverage if they can’t prove that they worked or volunteered for at least 80 hours per month. People receiving Medicaid would have to verify their eligibility every six months instead of once a year. They would also have to verify their citizenship or legal immigration status with their state in order to be eligible to receive federal Medicaid spending.
While these provisions may seem to be little more than extra paperwork, many experts believe that the main result of increasing what’s known as the “administrative burden” for public assistance is that people who are eligible to receive benefits fall through the cracks.
Some Medicaid recipients will also see their out-of-pocket costs go up. Under the plan, anyone with an income above the federal poverty line would pay a higher “cost sharing” rate — up to $35 per visit.
The second, and largest, source of Medicaid cuts would come from changes to how the federal government supports states. A boost in funding for states that was put in place during the COVID-19 pandemic would be eliminated. The proposal would put strict limits on a tax work-around known as “provider taxes” that nearly every state uses to increase the amount of health care money it gets from the federal government.
Some hard-line Republicans in Congress had called for even more aggressive cuts, including a per-person cap on federal spending. Those provisions were left out in what is being framed as a win for moderates within the party.
Which states rely on Medicaid the most?
Medicaid is important to every state, but the federal government’s role varies from state to state. California is home to 12 million Medicaid recipients, more than twice as many as any other state. Raw totals only tell part of the story, though. New Mexico has the highest rate of Medicaid enrollment as a share of its population. In 2023, 38.5% of New Mexico residents were insured by Medicaid, according to the health policy research organization KFF.
The federal government provides most of the funding for Medicaid, but states pick up part of the tab as well — about 30% on average. Some states are far more reliant on the government than others and would presumably feel a greater impact of any cuts passed by Congress. Seven states (New Mexico, Mississippi, Oklahoma, West Virginia, Kentucky, Arkansas and Arizona) got 80% or more of their Medicaid funding from the federal government in 2023, according to KFF data.
Republicans have very little room for error. They have narrow majorities in both houses of Congress and can likely expect unified opposition from Democrats on any spending package that comes up for a vote.
The cuts to Medicaid are just one piece of a massive spending plan that is still coming together, and dissent on any piece of that bill could sink the entire thing. Some centrist GOP members have said they won’t back steep cuts to Medicaid, but it’s unclear whether they can be convinced to get behind this new, less drastic, set of reforms. The party may also face some trouble if the plan passes through the House. Republican Sen. Josh Hawley called cutting Medicaid “both morally wrong and politically suicidal” in an op-ed published in the New York Times on Monday.