The House’s budget resolution, which the Senate GOP plans to alter, proposes the Energy and Commerce Committee cut at least $880 billion from programs under its jurisdiction — which include Medicaid.
By Jennifer Shutt, Stateline
Republicans in Congress have gotten a crash course in Medicaid during the last few weeks, as they eye the health care program for lower-income Americans as a source for hundreds of billions of dollars in savings to pay for tax cuts.
The 72 million Americans who rely on Medicaid, especially those represented by GOP lawmakers, as well as state leaders nervous about the effect on their budgets, are closely watching what Congress does.
Democrats already have seized on potential cuts in the state-federal program to portray Republicans as trying to harm poor and vulnerable Americans to preserve tax cuts for the wealthy.
Some GOP lawmakers have begun signaling to leadership they won’t vote for anything that reduces benefits to Medicaid recipients, a position that once would have left that handful of centrists out of negotiations.
But the extremely narrow majority in the House means that Speaker Mike Johnson, R-La., will have to keep pretty much everyone on the same page as the package takes shape in the weeks ahead.
Johnson himself might hear from constituents about Medicaid, given his deeply red state holds the nation’s second-highest percentage of residents enrolled in the program. Other GOP-led states like Arkansas and West Virginia have more than a quarter of their residents signed up for Medicaid.
Johnson is suggesting as much as $50 billion a year in Medicaid waste, fraud and abuse could be recouped, though that won’t come near the level of savings the GOP has tasked its committee that oversees health care with finding.
“Medicaid is hugely problematic because it has a lot of fraud, waste and abuse. Everybody knows that. We all know it intuitively,” Johnson said in late February. “It doesn’t matter what party you’re in, you should be for that because it saves your money and it preserves the program so that it is available for the people who desperately need it.”
Beyond that, it’s unclear at the moment how exactly Republicans may alter Medicaid in the yet-to-be written package they hope to use to bolster defense and border security spending, rewrite energy policy and extend the 2017 GOP tax law.
The House and Senate must agree to adopt a budget resolution to unlock the reconciliation process that will allow them to pass their legislation without Democratic votes in the upper chamber.
The House’s budget resolution, which the Senate GOP plans to alter, proposes the Energy and Commerce Committee cut at least $880 billion from programs under its jurisdiction — which include Medicaid.
President Donald Trump has essentially said Republicans won’t “touch” Medicaid (or Medicare or Social Security), but he’s left the door open to addressing fraud.
Here is a brief explanation of why Medicaid exists, who relies on the program, what exactly is known about fraud and how the federal government splits the cost with states:
Why did Congress establish Medicaid?
President Lyndon B. Johnson signed the Social Security Amendments of 1965 into law in July of that year, formally establishing Medicare, the nation’s health program for people over 65 and some younger people with disabilities, and Medicaid, which also includes some seniors.
But, the National Archives writes that debate “over the program actually began two decades earlier when President Harry S. Truman sent a message to Congress asking for legislation establishing a national health insurance plan.
“At that time, vocal opponents warned of the dangers of ‘socialized medicine.’ By the end of Truman’s administration, he had backed off from a plan of universal coverage, but administrators in the Social Security system and others began to focus on the idea of a program aimed at insuring Social Security beneficiaries whose numbers and needs were growing.”
During the 1950s and early 1960s, Congress increasingly paid attention to the number of uninsured Americans, the rising cost of health care and the growing population of seniors not covered.
“Public hearings were held, and the House of Representatives considered several proposals, but the debate did not intensify until 1960, when it became clear that private insurers were becoming increasingly incapable of providing comprehensive, affordable health care coverage to the rapidly growing population of older adults,” the archives writes.
How is Medicaid funded?
The federal government covers a minimum of 50%, based on a formula that increases the federal share in states with lower per capita incomes. The states pay the rest.
The states with the highest percentage of federal funding are Alabama with 73%, Arkansas with 71%, Kentucky with 71%, Mississippi with 77%, New Mexico with 72% and West Virginia with 74%, according to the non-partisan health policy research organization KFF.
The federal government spent a total of $6.8 trillion during the last full fiscal year, with about $611 billion going toward Medicaid.
Who receives their health care through Medicaid?
Medicaid eligibility differs in each state, but the federal government sets mandatory eligibility groups, including low-income families, qualified pregnant women and children, and individuals receiving Supplemental Security Income.
There are both financial and non-financial eligibility requirements to enroll in Medicaid, like living in the state. The program also requires participants to “be either citizens of the United States or certain qualified non-citizens, such as lawful permanent residents.”
Medicaid covers 63% of the 1.2 million nursing home residents in the country, according to KFF. West Virginia, Alaska, Louisiana, Mississippi and Georgia are the states with the highest percentage of nursing home residents relying on Medicaid for their coverage, according to a chart from KFF.
The Peter G. Peterson Foundation notes in an explainer on Medicaid that about “60 percent of the nation’s 73 million children received their health insurance through Medicaid or CHIP, which extends Medicaid benefits to children of low-income families who make too much money to qualify for the traditional Medicaid program.”
People with disabilities and senior citizens make up another 23% of Medicaid recipients, according to the foundation’s analysis.
How does Medicaid coverage affect prenatal and postpartum care, as well as maternal mortality?
Medicaid covers about 41% of all births in the United States, according to a fact sheet that includes a state-by-state breakdown.
That means the program has a significant impact on the type of health care women receive before, during and after giving birth, potentially setting it up as one avenue to address the country’s high maternal mortality rate.
Federal law requires states to cover postpartum coverage for at least 60 days, but it’s up to each state to decide if they want to extend coverage after that.
Democrats in Congress included provisions in the $1.9 trillion coronavirus relief package they approved in 2021 that gave states a way to extend that coverage up to one year. So far, nearly every state, except Arkansas and Wisconsin, has opted to do just that, according to an analysis by KFF.
The American College of Obstetricians and Gynecologists writes that expanding postpartum coverage to one year “is especially critical because of the Medicaid unwinding, which began in April 2023 and allowed states (to) restart the process of disenrolling ineligible members from Medicaid.
“Soon, many people who had Medicaid coverage will no longer be eligible for that coverage and may become uninsured, making Medicaid extension even more critical.”
Which states have the highest percentage of residents on Medicaid?
New Mexico holds the top spot, with 34.3% of its citizens enrolled in the program, followed by Louisiana with 32.2%, New York at 28.8%, Kentucky with 27.9% and California at 27.2%, West Virginia with 26.2% and Arkansas at 25.3%, according to KFF.
States with between 20% and 25% of their residents on Medicaid:
Michigan: 23.9%
Oregon: 23.8%
Massachusetts: 23.6%
Mississippi: 23.5
Alaska: 23%
Connecticut: 22.7%
Oklahoma: 22.7%
Rhode Island: 22.6%
Vermont: 22.5%
Montana: 21.6%
Delaware: 21.6%
Pennsylvania: 21.4%
Maine: 21.4%
Ohio: 21.4%
Hawaii: 21%
Indiana: 20.8%
Alabama: 20.7%
Nevada: 20.6%
Iowa: 20.5%
Arizona: 20.4%
Washington: 20.3%
States with between 15% and 20% of their residents on Medicaid:
South Carolina: 19.9%
Tennessee: 19.9%
Illinois: 19.5%
North Carolina: 19.1%
Maryland: 18.9%
Georgia: 18.8%
Colorado: 18.7%
New Jersey: 18.7%
Idaho: 18.3%
Minnesota: 18.3%
Wisconsin: 18.2%
Florida: 17.7%
Missouri: 17.7%
Virginia: 17.1%
Nebraska: 16.9%
Texas: 16.2%
States with less than 15% of their residents on Medicaid:
South Dakota: 14.7%
Wyoming: 14.6%
Kansas: 14.4%
New Hampshire: 13.4%
North Dakota: 12.8%
Utah: 11.3%
Georgetown University’s McCourt School of Public Policy has a breakdown by congressional district here. Medicaid has a state-by-state breakdown on its website with detailed state profiles.
How do states name their Medicaid programs?
Some states call Medicaid by its name, though others have differing titles, according to a list from the program.
States that call Medicaid something other than its name include: Arizona Health Care Cost Containment System, Medi-Cal in California, Health First Colorado, Hawaii QUEST Integration, KanCare in Kansas, MaineCare, MassHealth, Michigan Department of Health and Human Services, Minnesota Medical Assistance, Mississippi Health Benefits, MO HealthNet in Missouri, New Jersey FamilyCare, SoonerCare in Oklahoma, Oregon Health Plan, Pennsylvania Medical Assistance, Rhode Island Medical Assistance, Healthy Connections in South Carolina, TennCare in Tennessee, Apple Health in Washington state and BadgerCare Plus in Wisconsin.
What do we know about waste, fraud and abuse in Medicaid?
The Government Accountability Office’s high-risk list for 2025 kept Medicaid among the more challenging programs and called for “strengthening” program integrity.
The Centers for Medicare and Medicaid Services, which administer both programs, estimated that during the most recent full fiscal year the improper payment rate for Medicaid was 5.09%, or $31.1 billion.
That is lower than the 8.6% rate in fiscal year 2023 and the 15.6% rate in fiscal year 2022, according to the GAO report.
GAO placed Medicaid on the high-risk list due to improper payments, “limitations in CMS efforts to ensure states use Medicaid funds in accordance with federal requirements” and “limited CMS oversight of states’ Medicaid data, including on expenditure and utilization.”
Separately, the U.S. Health and Human Services Department’s Office of the Inspector General oversees Medicaid Fraud Control Units in every state, typically run by the attorney general.
The most recent annual report details 814 convictions for Medicaid fraud and an additional 329 convictions for patient abuse or neglect. The efforts recovered $1.2 billion.
A state-by-state breakdown shows Ohio had the most convictions at 183, followed by Arizona and California with 67 convictions each.
What does the Affordable Care Act, or Obamacare, have to do with Medicaid?
The law, approved by Democrats 15 years ago, expanded Medicaid eligibility to adults who are not seniors and earn up to $21,597 annually for one person, which is 138% of the federal poverty level.
The Supreme Court ruled in 2012 that states could choose whether to expand Medicaid eligibility or not, but expansion came with some more money from the federal government.
Ten states — Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin and Wyoming — have decided against expanding eligibility for adults.
How would Congress eliminating the expanded Federal Medical Assistance Percentage that goes along with Medicaid expansion under the ACA impact states?
A report from The Urban Institute, a left-leaning think tank, projects that if lawmakers eliminate that boosted federal match for states that expanded Medicaid under the ACA, and those states choose to keep the expansion in place, it would cost “$44.3 billion in state budget cuts or additional revenues that year to replace reductions in federal spending.”
“To offset such large reductions in federal spending, states would be forced to consider making cuts to their Medicaid programs, including limiting Medicaid eligibility, further reducing already low provider reimbursement rates, or eliminating optional benefits, raising new revenues, and cutting state spending in other areas,” the report states.
Should states eliminate the Medicaid expansion under that one potential scenario, the report states enrollment in both Medicaid and the Children’s Health Insurance Program would drop by 15.9 million people, or 21.8%.
How would work requirements impact Medicaid recipients?
Republicans are generally supportive of work requirements for safety net programs like Medicaid, making it one route the GOP could take as its members look for ways to offset the cost of tax cuts.
The Center on Budget and Policy Priorities, a left-leaning think tank, estimates that as many as 36 million Medicaid recipients could lose coverage if work requirements were implemented. Their projections include a breakdown by how many people would potentially be affected in each of the country’s 435 congressional districts.
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Jennifer Shutt covers the nation’s capital as a senior reporter for States Newsroom.
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