Republican members of the House Budget Committee have circulated a list of possible policy changes that would reduce federal spending between $5.3 trillion and $5.7 trillion over a period of ten years.  Up to $3.4 trillion of those possible cuts could include reductions in federal health care spending.  The health care cuts the document lists (all figures are ten-year reductions) are:

Medicare

  • introducing Medicare site-neutral outpatient payments – $146 billion
  • reducing Medicare disproportionate share (Medicare DSH) uncompensated care payments – $229 billion
  • reducing Medicare bad debt reimbursement – $42 billion
  • extending the Bipartisan Budget Act of 2013 budget sequestration that included cuts in Medicare spending – $62 billion

Medicaid

  • introducing per capita caps on federal contributions to state Medicaid programs – up to $918 billion
  • equalizing Medicaid payments for able-bodied adults – up to $690 billion
  • limiting states’ use of Medicaid provider taxes – $175 billion
  • lowering the floor for federal Medical Assistance Percentage (FMAP) federal Medicaid matching funds – $387 billion
  • reducing special FMAP treatment for Washington, D.C. – $8 billion
  • repealing the American Rescue Plan FMAP incentive – $18 billion
  • introducing a Medicaid work requirement – $120 billion

Affordable Care Act-Related Policies

  • recapturing the excess premium tax credit – $46 billion
  • limiting health program eligibility based on citizenship status – $35 billion
  • repealing the Prevention Public Health Fund – $15 billion
  • making unspecified cost-sharing reductions – $55 billion

Other Provisions

  • repealing unidentified “major” Biden administration health care regulations – $420 billion
  • reinstating changes in the public charge rule introduced in 2019 but repealed in 2021 – $15 billion
  • rescinding all unspent federal COVID-19 money – $11 billion

Because of their dependence on public payers like Medicare and Medicaid, these changes, if implemented, could be devastating for the nation’s community safety-net hospitals and the communities they serve.

It is important to note that this document is considered a menu of possible cuts and would require legislation for them to take effect.   Congress will not necessarily pursue all the cuts on this list, questions have already been raised about whether the savings they would produce are as great as anticipated, and there may be cuts not list that could later become part of policy deliberations.  Learn more from the committee members’ menu of possible cuts.