The GOP's #MedicaidMassacre bill is out & it's just as ugly as you'd think. Let's dig in...

Last week I wrote about the latest state of play regarding House Republicans so-called "big beautiful bill" to gut Medicaid in order to give fat tax cuts to billionaires. Yesterday the first official version of the legislative text was released, and it's pretty much as ugly as you might expect.

Here's some basics, via Nathaniel Weixel & Joseph Choi of The Hill:

...The plan caters more to the moderate wing of the Republican party by omitting two of the biggest and most politically controversial proposals discussed: a per-capita cap on people who get coverage from Medicaid expansion, and a direct lowering of the federal matching rate.

Instead, most of the savings come from policies that would cause Medicaid beneficiaries to pay more for doctors’ visits and complete more paperwork to prove eligibility. It would also impose a requirement for poor, childless adults, between the ages of 19 to 64, to prove they are working at least 80 hours a month.

All told, the Medicaid and health portions would save about $715 billion, according to the Congressional Budget Office. But it would also result in at least 8.6 million more Americans going uninsured.

Ummm...Medicaid cost an average of around $7,600/year per enrollee in 2021. I presume it's over $8,000/year in 2025. $8,000 x 8.6 million is $68.8 billion. Over the ten year period in question that would be at least $688 billion, and of course with inflation that will be well over $700 billion.

Saving the federal government a lot of money by kicking millions of people off of healthcare coverage isn't exactly the 11th dimensional chess move Republicans seem to think it is. Keep in mind that this is framed as "catering to the moderate wing" of the Republican party.

One of the largest chunks of savings in the proposal comes from cracking down on the ability of states to levy taxes on providers like hospitals and nursing homes.

Provider taxes have been a lucrative loophole for states to get more federal Medicaid funding by taxing providers and then returning the money to them in the form of higher reimbursements for treatment. The proposal would freeze all state taxes at their current rates and prevent states from imposing additional taxes.

...States will have to decide whether to cut benefits or raise taxes.

Another genius move: Starve the states, then blame them when people get sick & die and rural hospitals shut down.

The new work requirements will be federally mandated, but enforcement will be up to the states. Under the proposal, states must enforce “community engagement” requirements on Medicaid enrollees beginning in 2029.

Beginning in 2029, you say? Gee...that's after the next Presidential election. What an amazing coincidence.

Community engagement is defined as 80 hours of work, community service or a work program each month. Other options include at least half-time enrollment in an educational program or a combination of the available options.

Once again: 93% of all Medicaid expansion enrollees (ie, "able-bodied" adults age 19-64) already either work, attend school, are caretakers for sick/disabled relatives or are sick/injured themselves.

Again, these aren't "work requirements," they're "work reporting requirements," and they have a long history of being deliberately cumbersome to comply with, since kicking people off of Medicaid is literally the only way such programs save the government money.

“This bill refocuses Medicaid on mothers, children, people with disabilities, and the elderly—not illegal immigrants and capable adults who choose not to work. It is reckless that my colleagues on the other side of the aisle claimed an artificially high number in alleged coverage loss just so they can fear monger and score political points,” Guthrie said in a statement.

The proposal would also penalize the handful of Democratic-led states which have used their own money to offer Medicaid to undocumented immigrants. It would reduce the federal match to 80 percent for the expansion population—down from the current 90 percent—if the states continued to subsidize such coverage.

The states that would be hit hardest are New York, Washington and California.

Read that again: Republicans want to punish states for using their own money to provide healthcare coverage to their own residents.

I should note that while NY, WA & CA would be "hardest hit," according to KFF the 10-point FMAP reduction would also hit:

• Colorado
• Minnesota
• Illinois
• New Jersey
• Maine
• Massachusetts
• Oregon
• Vermont
• Rhode Island
• Connecticut
• District of Columbia
• ...and even red state Utah

So much for "omitting lowering of the federal matching rate."

...The proposal doesn’t mention Planned Parenthood by name, but it would prevent Medicaid from funding health providers that also offer abortion services.

Ironically, it's conceivable that the biggest threat to the bill may not come from so-called "moderate" Republicans (there's no such thing in Congress any longer) but from the ultra-extremist wing:

...“Does the bill offer ANY transformative changes on Medicaid or otherwise? Currently – NO,” conservative hardliner Rep. Chip Roy (R-Texas) wrote on X.

...But at the same time, Sen. Josh Hawley (R-Mo.) on Monday wrote a New York Times opinion article warning against efforts to cut Medicaid. He said funding the “big, beautiful bill” by slashing health insurance for the working poor is “morally wrong and politically suicidal.”

Here's some additional details on the House Energy & Commerce Committee bill from Georgetown University Research Professor Edwin Park:

...Upon enactment [of the ban on new provider taxes] states couldn't use new provider taxes/increase existing taxes to close #Medicaid budget shortfalls such as from a recession. Or they couldn't use new taxes to help finance improvements like expanded eligibility, greater access to long-term care or more adequate provider rates.

...this would make it much less likely that the remaining 10 non-expansion states take it up in the future, which is likely one of the reasons new taxes are being banned

...the bill would actually terminate existing #Medicaid provider taxes if they don't meet new technical restrictions (related to so-called uniformity waivers). Without these revenues, states will have to make significant cuts to their Medicaid programs and take away coverage and access.

...those revenues needed for #Medicaid would no longer be available immediately, causing budget crises in states that are affected.

...the prohibition appears to be drafted in a very broad way that could potentially affect numerous states, their taxes and their Medicaid programs

...likely to result in states cutting their Medicaid programs over time. And of course they would foreclose states making improvements that expand coverage and access for low-income individuals and families

And just in case you think they're leaving the ACA exchange population alone, I have news for you there as well. Via Harvard Assistant Professor of Health Policy and Politics Adrianna McIntyre:

The Medicaid provisions in the E&C bill will get the lion's share of attention — reasonably! — because they likely drive most coverage losses But proposed Marketplace changes will also create administrative burdens that screen people out of coverage + usurp flexibility from state-based marketplaces

This includes imposing needless premiums of $5 (or more, at the Secretary's discretion) when people would otherwise auto-renew into $0 coverage. I studied a version this phenomenon in Massachusetts (2016-2017); 14% of people fell out of coverage.

This section of the E&C bill is largely just codifying a "marketplace integrity rule" that CMS proposed in March. There's a wealth of analysis on these proposed changes in the comment letters that were submitted in response to that proposed rule.

Separately, insurers are gonna be *furious* that they may or may not need to price in these changes for 2026. I expect we're going to see them filing multiple rates for multiple scenarios.

I wrote about the so-called "marketplace integrity rule" at the time; here's a few hightlights (lowlights):

• Ending the availability of the monthly special enrollment period (SEP) for individuals with household incomes below 150% of the federal poverty level (FPL)

• Requiring all Marketplaces to reinstitute pre-enrollment verifications of eligibility for SEPs and require further verifications of income when there is no tax data available for verification.

• When an enrollee does not proactively verify their ongoing eligibility for a fully subsidized plan, Marketplaces must continue to re-enroll that individual into the same plan, but must also reduce the amount of advance payment of the premium tax credit by $5. This will require the enrollee to take an active step and pay a nominal $5 monthly premium until they confirm or update their eligibility determination, ensuring they are aware of their enrollment in this coverage.

During the 2025 Open Enrollment Period, 45% of all ACA exchange enrollees--10.8 million people--passively auto-renewed, which means they took no action whatsoever. I don't know how many of those 10.8 million are in fully subsidized plans (ie, $0/mo net premiums), but last year it was 6.8 million, and this year 10.26 million of them are paying $10 or less/month, so it's almost certainly somewhere between 6.8 - 10.2 million...likely around 7.5 million or so.

...revert to a previous definition of “lawfully present” that excludes Deferred Action for Childhood Arrivals (DACA) recipients for purposes of enrolling in Marketplace coverage.

...along with several other provisions, some of which may or may not be included in the House W&M bill.

Oh yeah...there's also this provision, which someone tipped me off about last night:

Sec. 112203. Eliminating limitation on recapture of advance payment of premium tax credit.

Current Law: Under current law, there is a limit on the amount of excess premium tax credit certain individuals must repay if they misestimate their projected income and benefit from a more generous advance payment of the tax credit than they qualified for.

Provision: This provision removes the repayment limits and requires affected individuals to reimburse the IRS for the full amount of excess tax credit received.

I was gonna write about it today, but David Anderson has already beaten me to the punch:

This is a wow of a provision. The consequence of this provision is that it will impose a massive uncertainty tax on low income enrollees who are likely legally eligible for coverage. Under current law, people who get too much in premium tax credits will have differential but capped exposure to paying some of it back. Low income enrollees whose actual income is below 100% FPL don’t have to pay anything back as long as the income estimate was made in good faith. This proposal would get rid of that safe harbor.

ACA exchange subsidies (APTC) are based on what you expect your annual income to be for the upcoming year, and are later reconciled with what you actually ended up earning. If you overestimate your income, you might end up getting a bonus subsidy when you file your taxes; if you underestimate it, you might end up having to pay a portion of the premium subsidies back.

So far, this sounds reasonable. HOWEVER, there's a problem with this: ACA premium eligibility only kicks in once your household income hits 100% of the Federal Poverty Level (FPL). If you earn less than that, you're not eligible for any APTC assistance, which is literally unaffordable for anyone earning that little.

In Medicaid expansion states this isn't much of a problem since those earning up to 138% FPL are eligible for Medicaid anyway.

HOWEVER, in the 10 non-expansion states, a lot of people would be utterly screwed if this provision goes into effect:

• 100% FPL for a single adult is $15,650 in every state except Alaska & Hawaii (both of which are expansion states anyway).
• The federal minimum wage is (still) $7.25/hour.
• Let's say you have a single adult in a non-expansion state working full time at $8.00/hour. At 40 hrs/wk x 50 weeks, that'd be $16,000 even (102% FPL)
• They assume they'll be working full time the following year, putting them just over the threshold to receive a generous federal subsidy.
• HOWEVER, they miss a week or so of work for whatever reason (illness, perhaps, ironically) and end up earning just shy of that...$15,500 (99% FPL).

They go to reconcile their federal taxes the following spring and discover that they have to pay back thousands of dollars in APTC subsidies...potentially up to half their annual income.

I'll post more about the bill soon, of course, but the bottom line is that if you oppose seeing Medicaid (and, to some degree, the ACA) being gutted, you should probably call your Representative & both U.S. Senators & tell them so.