As the Senate takes up the House-passed Big Beautiful Bill, the No. 1 hitch is a dispute between fiscal hawks and Medicaid doves — that is, senators who say it doesn’t cut enough federal spending vs. those who claim it cuts “too much” from Medicaid.
That latter crew includes a few Republicans — and pretty much all Democrats, who keep talking about “millions losing their health insurance” with literally deadly consequences.
The hawks are a lot closer to reality here: The GOP bill doesn’t actually even cut Medicaid, it just slightly slows its growth in years to come, even though Medicaid spending has exploded since 2019.
Per the Congressional Budget Office, federal outlays on the program have been positively soaring, from $409 billion in 2019 to $615 billion in 2023, and projected to hit $655 billion in 2025.
That’s a 50% jump from 2019 to 2023, and 60% to 2025.
What happened? First, a spike in emergency spending in the name of dealing with the pandemic, followed by the Biden crew’s quiet drive to expand Medicaid as much as it could in the direction of “universal health coverage.”
That last included giving Uncle Sam’s OK to complex state financial games to “qualify” for billions more in “free” federal funding.
As a result, per the Centers for Medicare and Medicaid, the federal share of total Medicaid spending rose from 63% in 2018 to 70% in 2022.
That dropped a bit to 68% in 2023 as most states, after years of Washington-mandated forbearance, finally started pruning their rolls of people who now make too much to qualify for what’s supposed to be a program for the poor.
Every time Democrats gain power in Washington, they ratchet up Medicaid outlays; Republicans for decades have flinched from rolling it back, no matter how perverse it leaves the rules.
For example, the feds still cover 90% of the cost of Medicaid coverage for single men, vs. just 50% for families and women with kids in the house: The mismatch began as a “temporary” rule when ObamaCare passed, but somehow has never ended.
And it all adds up to far more than Uncle Sam can afford, and a major reason why yearly federal budget deficits are nearing $2 trillion — even though the feds keep collecting ever more in taxes.
Sooner or later, it’s got to stop — but the GOP budget bill only begins to rein in Medicaid’s growth with commonsense reforms like requiring able-bodied single men to work just 80 hours a month to still qualify.
And that rule wouldn’t even kick in for a couple of years — none of the Republicans’ “savage cuts” do.
Bottom line: The bill is already plenty “dovish”; if the Senate bends it any more in their direction, it’ll break the bank all the sooner.