The Republican party seems intent on slashing Medicaid funding to offset their proposed tax cuts, despite a clear lack of public support for the idea.
Polling by KFF shows that fewer than one in five adults (17%) want to see Medicaid funding decreased, and most think funding should either increase (42%) or be kept about the same (40%).
These Medicaid cuts would have a devastating effects on health insurance coverage for millions of Americans. Less understood: the cuts also would impact a significant share of people enrolled in Medicare.
That point emerged clearly in a presentation last week by Tricia Neuman, senior vice president of KFF, at the annual Medicare Summit convened by the Center for Medicare Advocacy.
In a conversation with David Lipschutz, CMA’s co-director, Neuman outlined the possible direct and indirect effects, which would especially impact people who are eligible for both Medicaid and Medicare (the so-called “dual eligible” population). They constitute one-fifth of Medicare beneficiaries, and account for a disproportionate share of Medicaid spending. That is because they make up the older part of the Medicaid population - and therefore they tend to be sicker and need more healthcare. They account for 14% of the Medicaid population, but almost 30% of spending.
The potential consequences of Medicaid cuts are multifaceted. States facing significant budget reductions will likely respond by cutting optional benefits, reducing provider payments, or limiting service availability. This could create a domino effect that undermines healthcare access for the most vulnerable Medicare enrollees.
Specific proposed changes include implementing work requirements for Medicaid recipients, more frequent eligibility checks, and potential coverage termination for certain immigrant populations. Work requirements, in particular, would have a devastating impact on disabled and elderly beneficiaries, and multiple studies show these requirements don’t boost employment levels.
Neuman and Lipschutz also raised concerns about the broader implications of cutting Medicaid for healthcare infrastructure. Medicaid currently represents 19% of national hospital spending and over 40% of nursing home expenditures. Significant cuts could destabilize these critical healthcare sectors.
The cuts are being debated at a moment when a rising share of low-income Americans report that they cannot afford the cost of healthcare. In a Gallup poll released last month, 11% of people said they could not afford medication and care within the past three months, the highest level in the four years the survey has been conducted.
You can listen to the full CMA Summit conversation below - it begins around 3:00. This video includes the full day of presentations, which included conversations with two former top Medicare officials and presentations on effective advocacy. Read more about the CMA Summit here.
Social Security backing off more of DOGE’s damaging changes
The Washington Post reports that many of the major changes DOGE pushed at the Social Security Administration have been abandoned or are being reversed after proving ineffective; others have badly damaged customer service and satisfaction:
DOGE, which stands for Department of Government Efficiency but is not a Cabinet-level agency, had to cancel a plan to cut phone service for retirement and disability claims after drawing outrage from lawmakers, seniors and advocates. Staff reductions and reassignments led by DOGE are slowing the pace of claims processing as field offices lose longtime staff and gain a smaller number of inexperienced replacements. DOGE-driven changes to the agency’s website are causing crashes almost every day, and phone customers complain about dropped calls and long wait times. A DOGE-imposed spending freeze is leading to shortages of basic office supplies, from printer cartridges to the phone headsets staff need to do their jobs.
And on Friday, Social Security leaders told employees that the agency was ending a security check, developed at DOGE’s request, that was meant to root out allegedly fraudulent claims filed over the phone, according to three employees familiar with the situation and an email obtained by The Washington Post. But the measure — which involved placing a three-day hold on all phone claims as other staffers checked into the caller’s background — had only identified a couple of potential fraud cases while causing significant delays in claims processing, two employees said.
All of this is occurring as the new commissioner of the SSA, Frank Bisignano, settles into his new job - and apparently doesn’t like what he’s finding. The Post reports that “after getting a chance to see agency operations up front, Bisignano has grown alarmed by the drastic downsizing ordered by DOGE and carried out by a mid-level employee, Leland Dudek, who led the agency in an acting role for four months, according to one current senior official and one former senior official briefed on Bisignano’s thinking.”
What happened to getting rid of taxes on Social Security Benefits?
As a candidate, Donald Trump promised to eliminate taxation of Social Security benefits. But the GOP tax bill instead contains a workaround that stands in for actual elimination of the tax.
The Republicans hope to pass the legislation using the “reconciliation” process that permits them to bypass any Democratic filibuster in the Senate. But provisions that are considered “extraneous” to the federal budget cannot be included in reconciliation bills, and Social Security is classified as an off-budget program.
As a workaround, the bill includes a $4,000 “senior bonus” tax deductions for individuals aged 65 and older. But that will not benefit many seniors, as Social Security analyst Kathleen Romig notes:
Nearly half of senior households don’t owe any income tax. That includes 99% in the bottom fifth by income level, and 87% in the next fifth. So this provision does absolutely nothing to help them . . .
. . . What’s more, since the income tax code is progressive, the additional deduction is worth less to a lower-income HH than a higher-income HH. For instance, the additional deduction is worth $400 for a filer with a 10% marginal tax rate, but $880 — more than double — for a filer with a 22% rate.
Eliminating taxes on benefits also would reduce revenue received by the Social Security trust funds, hastening their projected insolvency.
What I’m reading
Americans in their 80s and 90s are redefining old age . . . UnitedHealth under investigation for Medicare fraud . . . A major provider is adding private assets to 401(k) plans, but Jason Zweig doesn’t think it’s a good idea (I agree with him).