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Medicaid recipients could face work requirements under GOP bill. Here are the details.
A massive change could soon be in the works for the 71 million Americans on Medicaid, with House Republicans unveiling new legislation on Sunday that would require many enrollees in the government health care program to prove they are either working, volunteering or in school to receive coverage.
The proposal is part of an effort by House Republicans to find $880 billion in savings over the next decade to help pay for President Trump’s tax bill, which will extend his 2017 tax cuts while introducing some new reductions, like eliminating taxes on tips.
Because President Trump has vowed not to touch Medicare — the health insurance program for people 65 and older — Republican lawmakers have turned their sights to Medicaid, which provides health coverage for low- and middle-income households. GOP lawmakers contend that Medicaid should be scrutinized because it’s prone to financial waste, and that, by doing so, the program will be better able to serve the people who need it.
“Medicaid is hugely problematic because it has a lot of fraud, waste and abuse,” House Speaker Mike Johnson, a Republican from Louisiana, said in February. Rooting out waste “preserves the programs, so it is available for those who desperately need it.”
Some policy experts and Democrats in Congress warn that slashing Medicaid would hurt many vulnerable Americans, with millions likely to lose coverage if the bill passes, while also posing a financial risk to some hospitals that rely on the program.
“[Nowhere] in the bill are they cutting ‘waste, fraud, and abuse’ — they’re cutting people’s health care and using that money to give tax breaks to billionaires,” said Rep. Rep. Frank Pallone of New Jersey, the top Democrat on the Energy and Commerce Committee, which oversees health care spending, in a May 12 statement about the new bill.
The House Republican bill could change considerably as it moves through the legislative process. More than a dozen House Republicans have told Johnson and GOP leaders they will not support cuts to the health care safety net programs that their constituents depend on.
“Community engagement requirement”
Under the House bill, many Medicaid recipients would be subject to something the measure calls a “community engagement requirement.” That provision would mandate that people who are enrolled in the program either work, participate in volunteer work or be enrolled in an educational program for at least 80 hours a month.
Medicaid recipients also would have to verify their community engagement eligibility twice a year. The bill also adds a more rigorous income verification process for those who enroll in the Affordable Care Act’s health care coverage.
If the bill is passed, the requirements would take effect Jan. 1, 2029.
Republicans have previously sought to tie receiving government benefits to work requirements, with one GOP lawmaker in 2023 seeking to tighten these rules for the food-stamp program because he said believed that “work is the best pathway out of poverty.”
Some policy experts who study Medicaid, food stamps and other social safety net programs say that there’s little evidence that work requirements increase employment, partly because most people who receive such aid and who are able to work are already doing so.
About 92% of people under 65 years old who aren’t receiving disability benefits were working full- or part-time in 2023, or else unable to work because of duties such as attending school or caregiving obligations, according to a recent analysis from heath publication KFF. The remaining 8% were either retired, couldn’t find work or weren’t working for another reasons.
Two states — Georgia and Arkansas — have added work requirements for Medicaid recipients, although Arkansas dropped the mandate after a court struck it down in 2019, a year after it was implemented.
Bumped off the rolls
A 2020 analysis of Arkansas’ work requirements found that 18,000 adults lost coverage after the policy went into effect, with more than half of those reporting that they delayed medical care and more than 6 in 10 saying they delayed taking medications because of cost. The requirements didn’t boost employment, the study, by researchers at Harvard University’s T.H. Chan School of Public Health, also found.
Georgia maintains a work requirement for a Medicaid expansion program called Pathways to Coverage, which provides insurance to some low-income adults who wouldn’t otherwise qualify for coverage. But that program has fallen short of enrollment goals, partly because of the administrative hurdles involved in verifying employment as well as technical glitches, according to a Pro Publica report.
“[W]ork requirements are the worst sort of red tape — blocking health coverage for working people, people with serious health conditions and people with disabilities,” said Laura Harker, a senior policy analyst at the Center on Budget and Public Policies, a public policy think tank, in a December post about Georgia’s program.
An April 2025 estimate from the Urban Institute finds that as many as 5.2 million people ages 19- to 55-years-old could lose coverage if federal work requirements go into effect for Medicaid.
Other cost-cutting measures
Some Medicaid recipients who make more than 100% of the federal poverty level — about $32,000 a year for a family of four — would be required under the House GOP bill to pay out-of-pocket costs for some services. Those fees, which would not apply to emergency room visits, prenatal care, pediatric visits or primary care check-ups, would be limited to $35 per visit.
And applicants could not qualify for Medicaid if they have a home that is valued at more than $1 million.
The proposed bill also targets any immigrants who are living in the U.S. illegally or without documentation. It reduces by 10% the share the federal government pays to states that allow those immigrants to sign up for Medicaid, such as California or New York. To qualify for Affordable Care Act coverage, enrollees would have to prove they are “lawfully present.”
contributed to this report.
Trump says he will order that the U.S. pay only the price other nations do for some drugs
President Trump says he’ll sign an executive order on Monday that, if implemented, he says could bring down the costs of some medications. It is an attempt to revive a program he tried and failed to implement during his first term.
The order Mr. Trump is promising will direct the U.S. Department of Health and Human Services to tie what Medicare pays for medications administered in a doctor’s office to the lowest price paid by other countries.
“I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World,” the president posted Sunday on his social media site, pledging to sign the order on Monday morning at the White House.
“Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before,” Mr. Trump added.
The president last week teased a “very big announcement” in the Oval Office, and sources confirmed to CBS News on Friday it would be the so-called “most favored nation” plan to cut Medicare drug prices.
Mr. Trump’s Health and Human Services Secretary Robert F. Kennedy Jr. also hinted at the policy on Tuesday, pointing to higher prices in Europe for the blockbuster diabetes drug Ozempic.
“Right now, the big impediment is really price,” Kennedy said in an interview with Newsmax. “And we’re negotiating that with the drug companies and seeing if we can at least launch some pilot programs, or if we can get the price low enough, we can make it available at government cost to everybody.”
“If we made that so that Medicaid, Medicare paid for it, and that private insurance companies had to pay for it, we would double the cost of health insurance to most employers in this country. And that would really be destructive,” Kennedy said.
The proposal would likely only impact certain drugs covered by Medicare and given in an office — think infusions that treat cancer, and other injectables. Mr. Trump boasted that the plan would save the government “TRILLIONS OF DOLLARS,” but the real figure is unclear.
Medicare provides health insurance for roughly 70 million older Americans. Complaints about U.S. drug prices being notoriously high, even when compared with other large and wealthy countries, have long drawn the ire of lawmakers from both parties, but a lasting fix has never cleared Congress.
Under the planned order, the federal government would tie what it pays pharmaceutical companies for those drugs to the price paid by a group of other, economically advanced countries.
The proposal will likely face fierce opposition from the pharmaceutical industry.
It was a rule that Mr. Trump tried to adopt during his first term, but could never get through. He signed a similar executive order in the final weeks of his presidency, but a court order later blocked the rule from going into effect citing procedural issues during rulemaking, and under the Biden administration later declined to pursue it.
The pharmaceutical industry argued that Mr. Trump’s 2020 attempt would give foreign governments the “upper hand” in deciding the value of medicines in the U.S.. The industry has long argued that forcing lower prices will hurt profits, and ultimately affect innovation and its efforts to develop new medicines.
Court orders sought by the drug industry and others blocked the Centers for Medicare and Medicaid Services, or CMS, from implementing the proposal in Mr. Trump’s first term, saying that the government failed to go through the proper rulemaking steps to create and implement the policy.
The Biden administration abandoned the proposal in 2022, blaming court orders blocking the model and concerns raised by stakeholders, including fears that it could cut off some Medicare beneficiaries from drugs and strain providers.
Only drugs on Medicare Part B — the insurance for doctor’s office visits — are likely to be covered under the plan. Medicare beneficiaries are responsible for picking up some of the costs to get those medications during doctor’s visits, and for traditional Medicare enrollees, there is no annual out-of-pocket cap on what they pay.
A report by the Trump administration during its first term found that the U.S. spends twice as much as some other countries in covering those drugs. Medicare Part B drug spending topped $33 billion in 2021.
More common prescription drugs filled at a pharmacy would probably not be covered by the new order.
Mr. Trump came into his first term accusing pharmaceutical companies of “getting away with murder” and complaining that other countries whose governments set drug prices were taking advantage of Americans.
On Sunday, the president took aim at the industry again, writing that the “Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, ALONE.”
Referring to drug companies’ powerful lobbying efforts, he said that campaign contributions “can do wonders, but not with me, and not with the Republican Party.”
“We are going to do the right thing,” he wrote.
Alexander Tin and
contributed to this report.
House Republicans face dilemma over Medicaid cuts as they vow to protect benefits
Washington — House Republicans are facing the difficult task of slashing $1.5 trillion — with hundreds of billions likely in Medicaid spending — to help offset the cost of President Trump’s tax cuts.
House leadership has denied that Medicaid — a joint federal-state health insurance program that provides care for more than 70 million low-income adults, children and people with disabilities — will be gutted. But it’s unclear how Republicans plan to reach the level of spending cuts laid out in the budget resolution that Congress adopted earlier this month without drastically trimming the program.
The resolution directs the House Energy and Commerce Committee, which oversees Medicare and Medicaid, to find at least $880 billion in savings over 10 years as part of the package central to Mr. Trump’s domestic agenda. Cuts to Medicare, which provides health coverage for seniors, are off the table, leaving Medicaid funding as the most likely way to reach that target.
The nonpartisan Congressional Budget Office recently calculated that achieving those savings would not be possible without cuts to Medicaid, which accounts for 93% of non-Medicare mandatory spending under the jurisdiction of the Energy and Commerce Committee. Projected spending for programs other than Medicare and Medicaid totals $581 billion, meaning that even if the committee eliminated all other non-mandatory spending, which is highly unlikely, it would still come up short of the $880 billion goal.
Republicans have vowed to protect benefits for eligible recipients, and some have suggested that overhauling the program could help them reach their target instead of cutting benefits.
“We’re going to protect the benefits that everyone is legally entitled to, the beneficiaries who have a legal right to that, it will be preserved. Those are essential safety net programs that Republicans support. The president has made clear: Social Security, Medicare, Medicaid will not take a hit. So you can count on that,” House Speaker Mike Johnson, a Louisiana Republican, said on April 10.
Johnson argued that there’s billions in waste, fraud and abuse and said Republicans are considering Medicaid work requirements.
“We can find well more than $800 billion in savings, and we will,” Johnson pledged.
Rep. Jodey Arrington of Texas, the Republican chairman of the House Budget Committee, estimated at least $160 billion could be saved by kicking ineligible recipients off of Medicaid.
But Joan Alker, the executive director of the Georgetown University Center for Children and Families, said “there’s no way to achieve those savings without cutting health care for millions of seniors in nursing homes, children, parents, veterans, caregivers, people with cancer or disabilities.”
“Nobody gets a Medicaid check in the mail, and there are already processes in place to go after bad actors like fake labs or unscrupulous providers filing false Medicaid claims,” she said. “Proposals to cut fraud would fund more prosecutors and investigators to ferret out criminal activity but that is not what Congress is doing — these are just proposals to cut Medicaid.”
Another proposal under consideration is moving more of the cost sharing to the states that expanded Medicaid under the Affordable Care Act. Forty states have adopted the Medicaid expansion, and under that provision, the federal government pays 90% of the costs for expansion enrollees while the states are responsible for 10%. The federal government’s portion for those covered through traditional Medicaid can range from 50% to 83%.
Rep. Austin Scott, a Georgia Republican, said there are discussions about cutting the federal match for Medicaid expansion back to the traditional level.
“Nobody would be kicked off Medicaid as long as the governors decided that they wanted to continue to fund the program,” Scott said in an interview with Fox Business on Monday. “We are going to ask the states to pick up and pay some of the additional percentage.”
The federal government would save $626 billion over a decade if states assumed more of the expansion costs, according to a KFF analysis. If states are unable to shoulder the costs and eliminate the expansion, federal Medicaid spending would decrease by $1.7 trillion, the analysis found. The Medicaid expansion covers more than 20 million low-income adults, who would lose coverage if states are unable to pick up the expansion costs.
Last week, a dozen House Republicans in battleground districts wrote a letter to leadership and Energy and Commerce Chairman Brett Guthrie, a Kentucky Republican, that warned they would not support a final reconciliation bill that includes “any reduction in Medicaid coverage for vulnerable populations.”
“Balancing the federal budget must not come at the expense of those who depend on these benefits for their health and economic security,” they wrote. “Cuts to Medicaid also threaten the viability of hospitals, nursing homes, and safety-net providers nationwide. Many hospitals—particularly in rural and underserved areas—rely heavily on Medicaid funding, with some receiving over half their revenue from the program alone. Providers in these areas are especially at risk of closure, with many unable to recover. When hospitals close, it affects all constituents, regardless of healthcare coverage.”
The issue will come to a head in the coming weeks. The Energy and Commerce Committee plans to mark up its portion of the reconciliation package on May 7.
contributed to this report.
Seeking spending cuts, GOP lawmakers target a tax hospitals love to pay
On the eastern plains of Colorado, in a county of less than 6,000 people, Lincoln Health runs the only hospital within a 75-minute drive. The facility struggles financially, given its small size and the area’s tiny population.
But for over a decade, the Hugo, Colorado-based health system has remained afloat partially thanks to a surprising source: special taxes on the state’s hospitals.
The taxes Lincoln pays help cover the state’s Medicaid costs and — because the federal government matches a portion of what states spend on Medicaid — enable Colorado to claim more federal money. That generally leads to more dollars for the hospital. The tax proceeds also have helped Colorado expand Medicaid under the Affordable Care Act to cover 400,000 more low-income adults, significantly reducing the number of people showing up at hospital doors without insurance.
Last year, Lincoln paid $500,000 in provider taxes but netted more than $3.6 million extra from Medicaid, accounting for about 15% of its budget, said Lincoln CEO Kevin Stansbury.
“These dollars allow me to care for patients who are enrolled in Medicaid and to break even rather than lose money,” he said. “Without them, it would significantly impact our ability to survive.”
Every state except Alaska uses at least one provider tax to boost its federal Medicaid dollars.
But Republicans who control Congress are looking for potential cuts in the nearly $900 billion Medicaid program to help fund an extension of President Trump’s tax cuts — and have sought to portray provider taxes as malicious, sometimes even deriding them as “money laundering.” Lawmakers say they may curtail or eliminate provider taxes as part of legislation to enact Mr. Trump’s domestic agenda.
“It’s infuriating,” Stansbury said.
Medicaid and the closely related Children’s Health Insurance Program together cover roughly 79 million low-income and disabled people and are jointly financed by states and the federal government.
Federal dollars match state payments with no limit. While the split varies based on a state’s per capita income, the federal match ranges from 50% to 77% for children, pregnant women, and people with disabilities, who make up most of the enrollment.
States started using provider taxes in the 1980s to help pay their share and gain additional Medicaid funds from the federal government.
Brian Blase, a former Trump health policy adviser who leads the conservative Paragon Health Institute, sees provider taxes as one of the highest forms of waste in Medicaid. States and their hospitals, nursing homes, and other providers aren’t held accountable for how the tax money is used, reducing incentives for states to control Medicaid spending, he said.
“This has been a feature of the program for four decades, and it is a feature that is getting worse,” Blase said.
The Congressional Budget Office estimates eliminating provider taxes would save the federal government more than $600 billion over a decade.
Rep. Brett Guthrie (R-Ky.), who chairs the House committee that oversees Medicaid, has said provider taxes are on the menu for potential cuts.
Other changes Republicans are considering to cut federal Medicaid spending include requiring adult enrollees to prove they’re working as a condition of eligibility, as well as ending higher payments for adults enrolled as part of the Affordable Care Act’s expansion of the program.
Since 2014, more than 20 million nondisabled adults in 40 states and Washington, D.C., have gained coverage under the expansion.
House Republicans have set a Memorial Day deadline to come to an agreement on spending cuts, which would help pay for extending about $4 trillion in tax cuts passed during Mr. Trump’s first administration and set to expire at the end of this year.
The Government Accountability Office and the Medicaid and CHIP Payment and Access Commission, a congressional advisory board, have raised concerns about the provider taxes, which effectively saddle federal taxpayers with state expenses. Republican and Democrat presidents have criticized or proposed curtailing the use of Medicaid provider taxes — including Mr. Trump in his first term, Barack Obama, and Joe Biden while serving as vice president.
But opposition from hospitals, nursing homes, and states snuffed out any move to limit or end the arrangements.
Colorado and other states often use the money to maintain or increase payments to providers, which are often paid less by Medicaid than by Medicare, the federal program primarily for people 65 or older, or private insurers.
States have added provider taxes to help generate federal money to cope with economic downturns and budget constraints.
Hospitals in Idaho last year began paying an additional provider tax to increase pay to hospitals and home- and community-based providers. The tax came as Idaho’s Republican-controlled legislature sought to add many conditions that threatened to end the state’s Medicaid expansion — which would also eliminate a key source of increased federal funding.
Brian Whitlock, president and CEO of the Idaho Hospital Association, said funding from the hospital tax helps boost Medicaid payments to about 80% of Medicare’s rates instead of 60%.
“We still lose money on every Medicare and Medicaid patient,” he said. “The state recognizes that this money helps offset the losses we take under Medicaid reimbursement.”
While hospitals and nursing homes have been the main beneficiaries of provider tax proceeds, ambulance services have also paid and benefited from Medicaid taxes. States increasingly have also approved Medicaid taxes on private insurers that operate their Medicaid programs to gain more federal funds.
California’s Medicaid managed care tax began in 2009 and is expected to generate nearly $9 billion in net revenue for the 2024-25 fiscal period — or about 5% of the state’s Medicaid budget, according to the California Legislative Analyst’s Office.
In recent years, California has extended full Medicaid coverage to immigrants lacking permanent legal status. Federal law prohibits federal Medicaid dollars from being used to cover people in the country without authorization, but states can use their own money.
At a presentation to congressional staffers in April, Blase cited California’s strategy as an example of provider tax abuse and claimed the state is effectively laundering federal funds to cover people living in the country illegally.
In practice, the tax has been a kind of fiscal pressure valve generally offsetting state spending. A ballot measure that passed in November now requires that much of the money from California’s tax specifically be used to increase Medicaid reimbursement to doctors, hospitals, and other providers.
Hospital officials and state Medicaid leaders argue the term “money laundering” is an inaccurate way to describe provider taxes, since they are allowed by federal law. But Blase said calling the levies a “tax” is misleading, pointing out that most businesses don’t typically advocate to pay one.
Jamie Whitney, chief legal officer for Texas-based Adelanto HealthCare Ventures, a consulting firm, said that provider taxes are a politically neutral way to help states pay for Medicaid and that curtailing their use would harm them all. “This is not a red-state, blue-state issue,” she said.
Colorado is one of more than a dozen states that have funded an ACA Medicaid expansion using provider tax money. Others include Arkansas, Louisiana, Missouri, North Carolina, Ohio, and Virginia.
Colorado implemented its Medicaid provider tax effort in 2009. In the 2024 fiscal year, about $5 billion of the state’s $15 billion Medicaid program was funded by provider taxes, according to the state.
The money helps the state pay higher Medicaid reimbursements to hospitals, which reduces their need to charge higher rates to private insurers, said Kim Bimestefer, executive director of the Colorado Department of Health Care Policy and Financing, which oversees Medicaid.
Some of the extra payments are dependent on hospitals meeting certain quality and patient-safety metrics, such as reducing readmission rates after patients are discharged — a requirement state officials say improves care for everyone.
The provider taxes also fund a program allowing working residents with disabilities to buy into Medicaid coverage even if their income is as high as 300% of the federal poverty level, or $46,950 for an individual. About 20,000 people are enrolled in the program.
Among them is Alison Sbrana, 31, of Fort Collins, Colorado, who has a type of chronic fatigue syndrome and relies on Medicaid to cover long-term home care.
“It would be devastating if the benefit went away,” said Sbrana, who works as a researcher and activist for those with the same disorder. “I would be forced to stop working to keep my income low enough to qualify.”
The state’s provider taxes also pay for a $60 million fund to support rural hospitals, helping them add telehealth services, recruit surgeons, and hire paramedics, according to a state report.
Konnie Martin, CEO of San Luis Valley Health, a two-hospital system based in Alamosa, Colorado, said her nonprofit paid $5.4 million in provider taxes last year and gained about $15 million in benefits from higher Medicaid payments and the rural grants.
She said the money helps her hospital maintain obstetrical services, so residents don’t have to drive 120 miles to the nearest maternity hospital. Without the birthing center, the entire region would suffer, she said.
“It also would gut the economy of the community, because young people will move away,” she said.
KFF Health News correspondent Bernard Wolfson contributed to this report.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.