January 13, 2025 Washington Wire

House GOP considers $5T in possible spending cuts

By Susan Rupe

More than $5 trillion in federal spending cuts – including cuts to Medicaid, Medicare and the Affordable Care Act – are part of a “menu” that House Republicans are circulating to fund President-elect Donald Trump’s top priorities this year, including tax cuts.

Politico obtained the list of proposed cuts that could trim as much as $5.7 trillion from the federal budget over the next 10 years, although it is uncertain how many of these items could pass through Congress give narrow Republican margins in the Senate and House of Representatives.

Proposed changes to Medicaid make up the largest portion of the spending cuts, with an estimated $2.3 trillion in savings if those changes take effect. The Medicaid proposed savings include:

$120 billion from imposing Medicaid work requirements.
Up to $918 billion by imposing per capita caps.
$690 billion for equalizing Medicaid payments for able-bodied adults.
$175 billion by limiting Medicaid provider taxes.
$387 billion by lowering the Federal Medical Assistance Percentage floor; $8 billion by removing the special FMAP treatment for the District of Columbia, and $18 billion from repealing the FMAP incentive in the American Rescue Plan.

“Reimagining” the ACA would remove $151 billion in spending. This includes:

$46 billion by recapturing the excess premium tax credit.
$35 billion by limiting health program eligibility based on citizenship status.
$15 billion from repealing the Prevention Public Health Fund.
$55 billion in cost-sharing reductions.

“Strengthen Medicare for seniors” was another item on the list, with a projected $479 billion in savings, while repealing some of the Biden administration’s health rules would save an estimated $420 billion. The proposed Medicare savings would come from cutting site-neutral payments, cutting uncompensated care payments and cutting Medicare bad debt reimbursements to providers.

Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].