House Republicans have taken another major step toward gutting the Medicaid program to pay for tax cuts largely benefitting their wealthy donors. On May 14, the GOP-controlled House Committee on Energy and Commerce approved budget legislation that slashes Medicaid funding by a jaw-dropping $717 billion over the next decade.
The Congressional Budget Office (CBO) estimates that the Republican budget could strip health coverage from at least 13.7 million people. “Republicans are cutting them adrift, with no place else to turn for medical care except perhaps the emergency room,” says NCPSSM President Max Richtman, who labeled it “the most massive cut in Medicaid’s 60-year history.”
Richtman emphasizes that, “with coverage ripped from millions of Americans, the health care system itself could collapse. Republicans may claim that these cuts are aimed at ‘waste, fraud, and abuse,’ but there isn’t anywhere near $717 billion worth of it in today’s Medicaid system.
The Center for American Progress called it “…the largest transfer of wealth from the poor to the rich in U.S. history.”
States Cannot Pick Up the Slack
States don’t have the resources to close the gaps in Medicaid funding. With federal payments slashed, they will face impossible choices. Forecasts provide little reassurance. Nearly 40% of economists polled by the National Association of Business Economics believe there’s a greater than 50% chance of a recession in the next year. If that happens, state tax revenues will shrink just as Medicaid needs spike. Even if the economy holds up, states will likely be forced to cut eligibility and benefits to cope with these federal cuts.
Cuts to Medicaid Will Undermine the Health Care Provider Infrastructure
Medicaid isn’t just a healthcare safety net. It’s a key driver of the economy, accounting for 18% of national healthcare spending. Reducing this massive investment impacts everyone, not just Medicaid beneficiaries. Republicans have proposed no alternate programs have to fill these gaps.
A joint study from the Urban Institute and the Robert Wood Johnson Foundation revealed that if Republicans defund Medicaid expansion under the Affordable Care Act, hospitals alone would lose $32 billion in revenue while absorbing $6.3 billion in unpaid care costs.
Prescription drug spending would drop by $20.9 billion, other health services (like home care) by $20.7 billion, and physician office revenue by $6.4 billion. These aren’t abstract numbers; they represent a threat to providers and patients alike.
Cutting Medicaid Could Mean the End of Optional Home and Community-Based Services
“The GOP cuts,” says Richtman, “would hit seniors especially hard,” as Medicaid pays for 60% of long-term care services and supports. Worse yet, a population deprived of basic health care will ultimately be sicker and cost taxpayers more in the long run.”
Approximately 700,000 Americans are currently on waiting lists for Medicaid Home and Community-Based Services (HCBS). These services allow seniors to maintain their independence, stay in their homes, and receive essential supports such as transportation and caregiver respite. Medicaid HCBS helps older adults avoid institutional settings like nursing homes.
The current 4.5 million HCBS recipients would see their coverage evaporate under the proposed Republican cuts. For many older Americans, their only option would be nursing home care, which is often more expensive and less desirable. As Richtman says, “Older Americans have made it clear they want to age in their homes with dignity.”

Trump & House Speaker Mike Johnson. Americans can blame these two for “the largest transfer of wealth from the poor to the rich in U.S. history.”
Requiring Mature Americans to Work for Medicaid Eligibility
The legislation proposes raising work requirements for Medicaid eligibility to include people up to age 65. This change is wildly unrealistic given the barriers older Americans face in the workforce. AARP data shows that nearly two-thirds of workers aged 55-64 believe their age prevents them from finding jobs. Employers are less likely to hire older workers. Economic downturns make these issues worse, as older employees are often the first to be laid off.
Work requirements already proved disastrous in New Hampshire and Arkansas, where implementation led to significant drops in Medicaid enrollment. A Kaiser Family Foundation analysis projected that work requirements could cause 5 million Americans to lose coverage.
“These cuts are not ‘pennywise,’ but they’re definitely ‘pound foolish,’” says Richtman. “This proposal is about barriers, not solutions… It punishes older workers for being unemployed in a system rigged against them.”
The Bottom Line
The devastating effects of this bill can’t be understated. Slashing Medicaid’s budget would lead to massive job losses in healthcare, worsen chronic illnesses, and force millions into poverty or homelessness. This isn’t just about money; it’s about lives. Or, as Richtman puts it, “There are two deficits in GOP-controlled Washington today… the budget deficit and an apparent deficit of empathy on the part of many Republicans.”