Congressional Republicans Remain Divided on Medicaid Funding as Committee Vote Nears

The cost of Medicaid, which covers 90 million low-income Americans, has doubled in 10 years, making it a key issue in spending negotiations.

Speaker of the House Mike Johnson (R-La.) in Washington on Feb. 25, 2025. Kayla Bartkowski/Getty Images

WASHINGTON—House Republicans have yet to reach an agreement on Medicaid spending as a possible committee vote on the matter is less than a week away.

Medicaid has emerged as a central issue in the budget reconciliation bill that will fund President Donald Trump’s agenda. After discussions over the last two days, members expressed sometimes conflicting views on how aggressively to trim the $900 billion program, the cost of which has nearly doubled over the last decade.

Republicans agree that federal spending, which is now exceeding federal revenue by more than $5 billion per day, must be reined in. Most appear to agree that Medicaid spending must be part of the GOP plan to reduce federal spending by $1.5 trillion over the next 10 years.

Meanwhile, some members adamantly oppose any change that would result in a loss of coverage for beneficiaries or shift additional program costs to state taxpayers.

The solution may require a combination of subtle alterations to the enormously complex Medicaid system rather than a single bold correction, according to some members. In the end, it may require intervention by the president himself to bring holdout members into agreement.

House Speaker Mike Johnson (R-La.) and Rep. Brett Guthrie (R-Ky.), chair of the House Energy and Commerce Committee, which has jurisdiction over Medicaid, met with the president on May 1 to discuss the reconciliation bill. No resolution was announced.

Here are the primary cost reduction measures under discussion and what some Republicans are saying about them.

Reducing Payments to States

Guthrie met with some moderate Republicans on April 30 to discuss possible Medicaid changes. One of those ideas is to reduce the Federal Medicaid Assistance Percentage, or FMAP, which is the rate at which the federal government reimburses states for their Medicaid expenses.

The rate varies based on the state’s income level, currently ranging from 50 percent to 83 percent.

“We’ve had a couple of comments from some people saying that seems to be too far for them to go,” Guthrie told reporters after the meeting, referring to a reduction in the reimbursement rate.

Rep. Nick Langworthy (R-N.Y.) told The Epoch Times on May 1: “I don’t support reducing FMAP at all.”

“We have to ultimately bend the cost curve on this program, because it’s spiraling out of control,” Langworthy said, but added that the country should fulfill its duty to traditional Medicaid beneficiaries.

Rep. Mike Lawler (R-N.Y.) made similar points.

“Changes to FMAP ... would have a devastating impact on New York, and I’m not doing it,” Lawler told The Epoch Times.

Yet he, like Langworthy, expressed urgency about lowering federal spending.

Rep. Mike Lawler (R-N.Y.) listens during a press conference in Washington on May 23, 2023. Anna Moneymaker/Getty Images

“If anybody believes that spending should continue at the levels that it has, they’re out of their minds,” Lawler said. “You cannot run $2 trillion deficits.”

Other Republicans seemed more open to the idea of lowering federal reimbursement to the states.

Rep. Dusty Johnson (R-S.D.) noted that each state’s reimbursement rate is variable to begin with, so modest changes might be possible. “As states’ economies grow at different rates, their FMAP changes,” Johnson told The Epoch Times. “So changes to FMAP are something that states are very comfortable with.”

Johnson added that an aggressive change in the rate would likely make it difficult to gain the 218 votes needed to pass the reconciliation bill.

Slowing the Expansion

Another cost-cutting proposal involves reducing the federal reimbursement made to states for beneficiaries who were added to Medicaid through the Affordable Care Act Medicaid Expansion beginning in 2014.

Original Medicaid covers low-income people in certain categories, including children, pregnant women, parents of dependent children, the elderly, and people with disabilities.

The 2014 expansion includes most people who are under age 65 and earn at or below 133 percent of the federal poverty line.

About a quarter of the 86 million people enrolled in Medicaid as of June 2024 joined under the Medicaid expansion. The reimbursement rate paid to states for the care of people in this group is 90 percent. There appears to be more openness to changing this part of the Medicaid program.

“The expansion population is, comparatively speaking, getting an unfair reimbursement [for their states],” Rep. Russ Fulcher (R-Idaho) told The Epoch Times. “A big percentage of that [group] is working age, able-bodied adults, and that was never the target population for Medicaid.”

A federal cost reduction could be made either by reducing the reimbursement rate for the expansion population or by setting an overall per-capita limit on the reimbursement offered to the states for people in that group.

Either plan would place greater responsibility on states to determine the limits of Medicaid coverage.

Under the program, states have broad discretion to determine which services are covered under Medicaid and what the reimbursement rates will be.

“The per capita caps would make the states live within their means,” according to Langworthy, who said they may now see the reimbursement as “free money from the federal government” to expand their Medicaid populations.

Rep. Buddy Carter (R-Ga.) was skeptical that either concept would be approved.

“We’ll consider everything,” Carter told The Epoch Times. “But I don’t think you’re going to see any FMAP changes. And the per-capita caps, evidently, are off the table now.”

Other Possibilities

The task is cutting $1.5 trillion from the federal budget over the next decade.

“That’s about $150 billion on an annual basis. That’s 1.7 percent of total spending,” Lawler said.

The more important number is 218, Lawler said, the number of votes needed to pass legislation in the House.  “How you get consensus, obviously, is what we’re in the process of working through,” he said.

Other changes to Medicaid are possible, according to Langworthy. “Many different components within the program that are on the table,” he said, mentioning work requirements for able-bodied Medicaid recipients.

Rep. Dusty Johnson (R-S.D.) during a hearing on Capitol Hill on Feb. 28, 2023. Kevin Dietsch/Getty Images

Indiana passed a work requirement for certain Medicaid beneficiaries in April, though it must gain federal approval before taking effect. If implemented, that move could reduce the state’s Medicaid rolls by 100,000, according to the Robert Wood Johnson Foundation, a philanthropic organization focused on health issues.

Fulcher said Republicans are also reexamining the Medicaid provider tax, a quirk in the system that allows a state to tax Medicaid providers, return most of the money to them through increased payment for services, and simultaneously increase the state’s reimbursement from the federal government.

“It’s not like a binary choice, A or B. There are different components within the proposals,” Langworthy said, and the key will be finding a combination Republicans can agree on.

Rep. Ralph Norman (R-S.C.) said he is certain Republicans will reach a consensus on Medicaid and the larger reconciliation bill.

When asked what made him so sure, Norman said, “Two words: President Trump.” Once the president weighs in and begins calling reluctant members, they’ll come to an agreement, Norman said.

The House Committee on Energy and Commerce is expected to consider the reconciliation bill on May 7.