House Republicans release Medicaid cuts proposal
By Jakob Emerson / May 12, 2025
House Republicans unveiled legislation May 11 that would introduce Medicaid work requirements nationwide and stricter eligibility requirements.
The 160-page bill, introduced by the House Energy and Commerce Committee as part of a broader budget reconciliation package, aims to reduce federal spending by hundreds of billions of dollars over the next decade, with Medicaid and ACA programs facing the majority of the proposed cuts.
The legislation calls for more frequent eligibility redeterminations and strict address verification processes to prevent duplicate enrollment across states, and managed care organizations would be required to relay updated address information to Medicaid programs.
A key provision mandates that able-bodied adults aged 19 to 64 without dependents work at least 80 hours per month or participate in community engagement activities to maintain their Medicaid coverage, with exemptions for pregnant individuals and certain other situations. States that fail to verify citizenship or immigration status among enrollees could lose federal funding for those individuals’ benefits. The proposal would also ban the use of Medicaid and CHIP funding for gender transition procedures for individuals under the age of 18.
The bill does not propose per capita caps or a complete overhaul of Medicaid expansion funding, but it does include provisions to penalize states financially if they provide Medicaid benefits to noncitizen residents by reducing their ACA expansion matching rate.
The GOP proposal would also shorten the retroactive coverage period under Medicaid from three months to one and eliminate federal reimbursement for benefits during the “reasonable opportunity” period in which applicants verify immigration or citizenship status, unless verification is completed.
The legislation would limit states’ ability to levy taxes on providers to finance Medicaid programs, which are typically imposed on hospitals, nursing facilities, and physicians.
The bill also includes provisions aimed at pharmacy benefit managers, requiring that contracts between states and PBMs adopt a transparent pass-through pricing model to limit payments for prescription drugs to the ingredient cost and dispensing fees. Additionally, any payments to PBMs for drugs must be fully passed through to pharmacies or providers. The bill would also ban the use of spread pricing within Medicaid programs.
Democratic lawmakers and hospitals have criticized the legislation, pointing to an analysis from the Congressional Budget Office indicating the bill could cut Medicaid and ACA spending by up to $715 billion over the next decade and result in at least 8.6 million people losing insurance coverage by 2034. Hospital and health system leaders have been outspoken about proposed cuts, warning that even without FMAP reductions or per capita caps, the cuts could still deliver a blow to hospitals and their patients.
“These proposed cuts will not make the Medicaid program work better for the 72 million Americans who rely on it. Instead, it will lead to millions of hardworking Americans losing access to health care and many of our nation’s hospitals struggling to maintain services and stay open for their communities,” AHA President and CEO Rick Pollack said. “We urge Congress to reject efforts to dismantle this vital program.”
“Congressional Republicans and President Trump rightly pledged to protect Medicaid benefits and coverage – this bill fails that test,” Federation of American Hospitals’ President and CEO Chip Kahn said. “It is imperative Republicans go back to the drawing board; too many lives depend on it.”
The bill is scheduled for markup in the Energy and Commerce Committee on May 13 and will need to pass in the narrowly divided House and Senate.