Simple cost transfers when Medicaid costs are cut

With the “Big and Beautiful Act” passed by U.S. House members on May 22 to advance President Trump’s first agenda, everyone’s eyes were staring at members of the U.S. Senate as they made their own thoughts on what they should think in the legislation.

We can expect that Medicaid cuts – by partially offsetting tax breaks and higher income losses from defense and border security spending – will continue to be a fiercely controversial issue. We saw this when Medicaid broke logjam in negotiations last week, with the last minute decision to raise the date of Medicaid job requirements to January 1, 2029 to “no later than December 31, 2026” and allow states to add the requirements earlier.

On the one hand, Medicaid spending is an out of control train. Medicaid enrollment and expenditure over the next decade are expected to exceed $300 billion (FY) from 2025 to 2033. On the other hand, the proposed Medicaid cuts translate into huge losses in economic activity. The Congressional Budget Office (CBO) estimates that at least 8.6 million of at least 70 million Medicaids for low-income and disabled people will lose coverage under changes proposed by the bill, and the program will also generate $698 billion in federal savings.

For months, we have been hearing speculation from congressional leaders about proposed Medicaid cuts aimed at saving billions of dollars. The debate has already had a fever on how to achieve this and what their impact will be. This is a balanced act. The House’s decision to abandon some of the more serious Medicaid proposals is bad news for the Cheap Eagles, but good news for the most vulnerable.

Furthermore, we hear voters expressing indignation at the prospect of cutting Medicaid funds and how Congressional Republicans are wary of returning funds to health care programs their voters rely on. According to a public opinion poll in April, about 75% of Republicans favor maintaining Medicaid spending, while 49% support increasing it.

Medicaid cost cuts are just cost transfers

Until the Senate imposes weights, no one can predict how much Medicaid rollback is or how it affects a fifth of Americans relying on.

I think the main unintended consequences of cutting Medicaid will be a series of cost transfers, worsening health outcomes and higher overall cost of care. Individuals who lose Medicaid coverage still need health care, and we know that many people without insurance will delay care until they absolutely need it and then show up in the emergency room. Care costs for those uninsured patients will be transferred to the hospital, which in one case will seek to absorb by negotiating a higher reimbursement rate from its commercial insurance contract. Commercial insurers will try to recover costs with higher premiums while paying for more expensive patients if they have Medicaid-covered patients.

Potential Medicaid Cuts Senate Review

House Republicans believe that the big and beautiful bill is a victory for President Trump’s goal of passing job requirements and eliminating efficiency and reforms to eliminate waste and fraud, while simultaneously eliminating waste and fraud, while also winning benefits for Medicaid and Medicare.

As always, there are two aspects to the story. The ultimate measure of many House members to reduce Medicaid funding is inconsistent with the perceptions of established industry experts. Some of the positive and negative factors of three of the provisions:

Implementation work requirements Accepting Medicaid payments could save $100.9 billion, according to the U.S. Congress (CBO). Under the job requirements of the new bill, most children-free adults aged 19 to 64 who are not disabled must provide documents to work 80 hours a month to receive Medicaid. Once states establish requirements, about 1.5 million adults will lose federal funds due to their Medicaid coverage. While jobs from Georgia require pilots to learn, it is encouraging to propose transfer of compliance responsibilities from individuals to states, but implementation will require a well-thought-out approach.

However, many people believe that job requirements will not have much impact on Medicaid costs. According to a recent Kaiser Family Foundation (KFF), 64% (16.1 million) of adult Medicaid recipients worked full-time (44%) or part-time (20%) in 2023. Of the remaining 36% (10 million) of Medicaid adult recipients, 28% of 28% have no jobs because they are retired, they are not at work, or are unable to go to work, or are unable to find a job, or are unable to find a job, or are not at work. result? Unless states find ways to make the government less burdened, many people will lose coverage.

Need enhanced eligibility and Medicaid verification Will help reduce abuse and fraud,,,,, Save at least $160 billion due to fraudulent Medicaid kicking out of qualified recipients According to Rep. Jodey Arrington, Republican chairman of the House Budget Committee. It can also inspire more people to join the workforce.

However, according to The Centers for Medicare and Medicaid Services (CMS) totaled $31 billion in 2024, with 79% of that being due to insufficient documentation rather than fraud. In fiscal year 2024, this indicates that the amount of fraud is $6.5 billion per year, or $65 billion over a 10-year period. Additionally, enhanced Medicaid eligibility and verification will result in members at an increasing risk of loss coverage – often due to paperwork, confusion or lack of support. For health plans, this means higher churn, re-registration costs and care disruptions.

Exclude undocumented immigration from Medicaid The long-term sustainability of the program will be protected and with a wider push to promote stricter immigration enforcement and concerns about non-citizen welfare.

However, denied Medicaid from undocumented immigrants seeking health care increases public health risks and increases unpaid care costs for providers and hospitals. Many people think this is more political theatre than policy, because undocumented immigrants already have limited access to Medicaid.

A holistic solution to true Medicaid reform

We all agree that Medicaid needs reform. I think reform means reducing costs due to increasing efficiency and creating better health outcomes.

To find a real solution, I urge the Senate to ask first:

• Are we saving money? Or just transfer costs elsewhere?
• Will these cuts reduce costs or increase costs in the long run?
• How do we invest in smarter solutions to prevent health outcomes and expensive crises?

The good news is that there are no shortage of innovative ideas about overall improvements to Medicaid, including higher quality of care, higher system efficiency and alleviating shortages of understaffing. The consequences of these systematic enhancements? Cutting Medicaid costs, rather than cost changes, will be true and lasting. Whether they are part of the solution to the national debt problem or not, they should be considered.

We have to determine where to take care of our children, and those who are unlucky are on the priority list. Our policy makers need to see the way it takes to really reduce Medicaid costs in the long run and who will pay when the cost changes proposed by their Medicaid cost cuts.

Photo: MBVE7642, Getty Images

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