Proposed Spending Cuts Would Cut Workers’ Health Care and Jobs to Pay for Tax Cuts for the Rich
Budgets are about more than just dollars and cents listed on a spreadsheet—budgets are about our values. We saw Trump’s budget priorities during his last administration: billions in proposed cuts to Social Security. Billions in proposed cuts to Medicaid. Billions in proposed cuts to public schools. Billions in proposed cuts to food assistance programs.
At the same time, the last Trump administration had plenty of money for a tax bill in 2017 that delivered trillions of dollars in special tax breaks to billionaires and giant corporations. Now the Trump administration is looking to make those tax breaks for the rich and powerful permanent in 2025.
The labor movement will fight back against any attempts in the budget process to cut essential services for working people—especially to pay for tax breaks for corporate CEOs.
We’re here to say, no more!
The Facts:
Proposed Health Care Cuts in Republican Budget Legislation
While Senate Republicans appear focused on imposing a new work requirement for Medicaid, the House GOP has put forward a wider set of options for spending cuts over the next 10 years, and they are favoring cuts that would hit Medicaid and Affordable Care Act (ACA) coverage:
- Medicaid “per capita caps” block grants—$900 billion. These funding caps would end the federal guarantee of paying for covered benefits by preventing the program from keeping pace with medical inflation or the costs of new treatments.
- Reduce the federal Medicaid match below 50%—$387 billion. A reduction in federal funding for states that currently receive a 50% match would shift billions of dollars in costs to state budgets.
- Implementing work requirements for Medicaid eligibility—$100 billion. When implemented at the state level, work requirements prevented thousands of families from enrolling due to paperwork barriers and failed to increase employment levels, while creating substantial costs for states. This policy is based on the myth that Medicaid enrollees do not want to work. However, of the adult Medicaid enrollees subject to work requirements, KFF found that “92% were working full or part-time (64%), or not working due to caregiving responsibilities, illness or disability, or school attendance.”
- Limiting provider payments to state Medicaid programs—$175 billion. This policy would overturn long-standing funding arrangements with the states.
- Repeal nursing home minimum staffing standards—$22 billion. Repealing safe staffing standards would increase patient mortality and reduce the health care workforce as workers leave for higher-paying jobs.
- Recapture ACA subsidies when families’ income improves—$46 billion. Many families working toward higher incomes will forgo ACA coverage if they worry about owing thousands of dollars in taxes the following year.
Millions Will Lose Coverage and Access Will Be Cut to Essential Services
- The Medicaid work requirements alone would cause 1.7 million enrollees to face loss of coverage.
- Medicaid “per capita caps” would cause additional millions of enrollees to lose their insurance.
- Medicaid is the primary source of funding for many essential health care services in our system—in many cases the only source of coverage for people needing this care:
- Medicaid/CHIP covers more than 83 million people, including nearly half of all children (more than 37 million), nearly 24 million women of reproductive age, nearly 55 million people of color, nearly 14 million people in rural areas, and over 17 million seniors and people with disabilities.
- It covers 41% of all U.S. births.
- It is the primary payer for long-term care and community-based services, covering more than half of the nation’s spending on these services.
- It is the single largest source of funding for mental health and substance use disorder treatment.
Thousands of Jobs Will Be Lost and State and Local Budgets Will Be Strained
- Medicaid finances hundreds of thousands of America’s jobs—and thousands will lose work if these cuts are enacted.
- Medicaid provides 19% of total hospital payments—nearly $263 billion annually—and it is a major payer for other providers. Cuts to this revenue will slash jobs and close facilities in many communities.
- As Medicaid is the primary source of federal funding to the states (56%), these cuts will constrain other priorities such as education and transportation as states seek to balance their budgets.
Just one of these policies—Medicaid work requirements—would increase 10-year state costs by $65 billion.
