Even Bannon knows cutting Medicaid is a mega-risk

Republicans are taking a huge political gamble as they try to find money for tax cuts by threatening to slash Medicaid. As Congress has learned repeatedly, most recently in 2018, when the party in power messes with Americans’ health care, things don’t go well for them in midterm elections. Medicaid covers more than 72 million people across the country — about one in four Americans overall, and about half of all children. It disproportionately covers people with disabilities, the low-income elderly, and anyone needing long term care. And it fills in the gaps for millions of people who need mental health and nursing home services that aren’t otherwise covered by health insurance. Polls show the public health insurance program is viewed favorably by 77% of all Americans, and 84% of those on the programme.

Yet on Tuesday evening, under pressure from President Donald Trump and House Speaker Mike Johnson, all but one House Republican voted for a “budget framework” that could remove as much as $880 billion from Medicaid over the next 10 years. Johnson denied there would be deep cuts. “We’re going to take care of those who are rightful beneficiaries of the programs,” he confidently told CNN Wednesday night. He vowed instead to “carve out fraud, waste and abuse and find efficiencies.” This is expert-level gaslighting. Johnson knows that $880 billion in savings is impossible to achieve by only targeting “fraud, waste and abuse.” And even if it were possible, it’s only about 19% of the $4.6 trillion needed to renew the tax cuts passed during the first Trump administration.

But talk is cheap, and Johnson may have offered a clue when he spoke of “rightful beneficiaries.” Tightening eligibility, imposing funding caps on recipients, and cutting Medicaid payments to states are some of the cutbacks floated by Project 2025 now gaining traction with Republicans. Johnson also suggested that imposing a work requirement for most recipients “polls well” with voters.

But work requirements don’t work. Ask Georgia and Arkansas, the only two states that have imposed a work requirement for Medicaid beneficiaries. In both cases, work requirements have ramped up administrative costs while reducing access to health care.

Arkansas’ work requirement, which started during Trump’s first administration, lasted about eight months before a federal judge threw it out. Subsequent research found that more than 95% of people targeted by the policy had already met the work requirement or should have been exempt. Yet nearly 18,000 people lost coverage, and most of the people who were removed from the system stayed uninsured.

In Georgia, the only state currently requiring Medicaid enrollees to work in exchange for their health care, it’s also been a fiasco. The state requires recipients to work at least 80 hours per month, attend a technical college or perform another state-approved activity. But the administrative rollout has been so fraught with technical glitches and confusion that people have been unable to report their work hours.

At the end of its first full year in 2024, Georgia reported the programme was insuring only 4,231 people, out of about 240,000 who were eligible. There had been little increase in the labour force participation rate among the group and, of the $40 million the state spent on the programme, only about 10% went to recipients. The rest went to consultants and vendors.

The programme’s broad reach is another reason that targeting Medicaid comes with mega risks for the MAGA crowd. The areas of the country that could be most harmed by cutting Medicaid payments to states are disproportionately communities that voted in large numbers for Trump. Even Steve Bannon said the quiet part out loud when he told his podcast listeners: “Medicaid’s going to be a complicated one ... A lot of MAGA’s on Medicaid.”

A look at data in rural areas, where Trump voters are concentrated, bears this out. According to a 2023 study by Georgetown University, in 2020 — 2021, Medicaid and the Children’s Health Insurance Program provided coverage for a larger share of both adults and children in small towns and rural areas than in metropolitan counties nationwide and in every state.