House Speaker Mike Johnson has ruled out a controversial change to Medicaid that would have scaled back federal spending that ballooned under Obamacare, a decision that calms moderate Republicans but is angering conservative lawmakers.
House Republicans have been trying to coalesce on how to best approach cuts to the healthcare program that protect benefits to the most vulnerable while taking a hatchet to waste, fraud and abuse.
The House GOP’s budget resolution tasked the Energy and Commerce Committee, which oversees the program, to find at least $880 billion in savings as part of Republicans’ push to pass President Trump’s “big, beautiful bill” through the filibuster-proof budget reconciliation process.
Republicans have eyed two proposals targeting costs associated with the Medicaid expansion population ushered in by the Affordable Care Act. Altering the formula that determines the federal-state cost sharing for Medicaid, and enacting per capita caps, could go a long way to hitting the target for cuts.
Hardliners, who want steep spending cuts to the program in pursuit of returning Medicaid to its original mission, support changing the federal medical assistance percentage, or FMAP. But moderate Republicans have pushed back out of fear that following through on either policy change would lead to their constituents losing healthcare.
Mr. Johnson, Louisiana Republican, met with moderate Republicans late Tuesday to hash out a path forward as the Energy and Commerce Committee works to find consensus on what proposals to pursue ahead of a mark-up hearing that was punted until next week.
When asked if there would be changes to the FMAP formula after the meeting, the speaker said “No.”
And whether per capita caps that would limit the amount the federal government spends per Medicaid beneficiary were still in the mix, Mr. Johnson said, “I think we’re ruling that out as well, but stay tuned.”
Moderates left the meeting seemingly more willing to support Medicaid cuts, armed with a rough plan more focused on targeting waste, fraud and abuse in the program, enacting work requirements, removing and excluding illegal immigrants from benefit rolls and requiring people to re-enroll every six months instead of annually.
“I think we’re going on a good pathway to make sure that, again, we don’t cut Medicaid to any eligible individual human being or to any facility,” said Rep. Jeff Van Drew, New Jersey Republican.
Killing both proposals, however, threatens a revolt from hardliners that could make the road ahead more difficult.
“Well — I haven’t ruled it out,” Rep. Chip Roy, Texas Republican, said on X. “It’s necessary to stop robbing from the vulnerable to fund the able-bodied.”
Nixing changes to the FMAP formula, in particular, likely closes one of the most viable pathways the GOP had to reaching the $880 billion target for cuts.
The Congressional Budget Office released a report on Wednesday that found changing the FMAP formula for the expansion population to match that of other enrollees could reduce the federal deficit by $710 billion over the next decade. The report also found that placing per capita caps on the Medicaid expansion population could save $225 billion over the next decade.
The report was in response to a request from Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, and Rep. Frank Pallone of New Jersey, the top Democrat on the House Energy and Commerce Committee, who wanted to know the impact on spending and benefits of a variety of proposals being floated by Republicans.
When asked what removing FMAP from the equation would do to the committee’s spending cut target, Mr. Van Drew said, “it’s not the number, it’s starting to right the ship and turn this around.”
“That number didn’t come divinely from God, like the tablets, the 10 Commandments,” he said. “All of a sudden it appeared. We made the number so I don’t know why we can’t make a new number that’s slightly different.”
Still, some moderates’ concerns over per capita caps lingered, particularly over states that have trigger laws that could reduce or halt Medicaid expansion if caps are enacted.
“I have to see in Arizona if the per-capita cap impacts the trigger laws,” Rep. Juan Ciscomani, Arizona Republican, said. “I don’t think I’m 100% clear on that. That would be a deal-breaker for me if it does trigger it, obviously.”
