As Congress continues to negotiate potential drastic cuts and changes to the Medicaid program, an important development occurred this week. On May 7, 2025 the Congressional Budget Office (CBO) provided estimates for five policy options concerning Medicaid that Congress may be considering. When considering major pieces of legislation, members of Congress request CBO, the nonpartisan entity that provides budgetary and economic estimates of legislation, to study the proposal and release a cost estimate for federal spending. This estimate, or a “CBO score,” is often crucial to garnering support for legislation and is often used to determine what other proposals can be fit into legislation to offset costs. However, a CBO score can sometimes be the death knell of a proposal. The importance of a CBO score during negotiations cannot be overstated.
According to CBO:
“Under the first four policy options, federal contributions to the Medicaid program would be smaller, reducing federal budget deficits. CBO anticipates that states would respond in four ways:
- Spend more themselves on Medicaid, mainly using a mix of revenue increases and reduced spending on other programs for financing,
- Reduce payment rates to health care providers,
- Limit the scope or amount of optional benefits, and
- Reduce enrollment in Medicaid.
Under a fifth policy option, which also would reduce the federal budget deficit, only Medicaid enrollment would be reduced as a result of the policy change.”
This fifth option addressed a final rule,“Streamlining Medicaid; Medicare Savings Program Eligibility Determination and Enrollment,” 88 Fed. Reg. 65230 (Sep. 21, 2023), that reduced barriers to enrollment in Medicare Savings Programs, which help low-income beneficiaries pay premiums and cost-sharing requirements.
The Democrats on the House Energy and Commerce Committee and Senate Committee on Finance, Committees that have jurisdiction over the programs that would be affected, requested the reports to try to gauge the potential harm of these proposals. They responded to the CBO score with a joint statement analyzing CBO’s findings:
“Republicans’ claims that their policies will just reduce so-called waste, fraud, and abuse or that people will not lose their benefits are simply untrue.
- 100 percent of the savings from the policies that shift costs to states come from reducing payment rates to providers, limiting optional benefits, and kicking people off coverage, not eliminating waste fraud and abuse.
- 100 percent of the savings from rescinding the eligibility and enrollment rules that are on Republicans’ chopping block come from kicking people off Medicaid.
Additional findings include:
- Eliminating the ability of states to use provider taxes will result in 3.9 million Americans getting kicked off their health insurance.
- Imposing per capita caps on people eligible for Medicaid through the Affordable Care Act Medicaid expansion will kick 1.5 million off their health insurance.
- Cutting the Federal Medical Assistance Percentage (FMAP) for Medicaid expansion would result in 2.4 million people being kicked off their health insurance.
- CBO expects that states would reduce enrollment by eliminating optional coverage categories, including Medicaid expansion, and by changing enrollment policies and procedures to make enrollment more challenging to navigate.
- Repealing the Eligibility and Enrollment final rule would result in 2.3 million Americans losing Medicaid coverage—meaning 400,000 people will be uninsured including children and people with disabilities, and low-income seniors who retain only Medicare coverage see premium and co-pay increases and will be unable to access the care they need without the support of Medicaid.”
Additional Medicaid Resources for Advocates:
- House Republicans Won’t Let Go of Repealing ACA; Decimating Its Medicaid Expansion Would Harm Millions of Parents, Children, Disabled People | Center on Budget and Policy Priorities
- New State-by-State Estimates of the Federal Funding Cuts from Imposing a Per Capita Cap on the Medicaid Expansion – Center For Children and Families
- Combined Impact of Medicaid Cuts Under Consideration Would End Expansion and Take Away Coverage for Nearly 21 Million Low-Income People – Center For Children and Families
- States in the Bull’s-Eye of Medicaid Cuts
- The Medicaid You Don’t Know You’re On: How Rebranding Hides Threats to Your Care
May 8, 2025 – K. Kertesz