The House Budget Resolution’s Medicaid cuts would be the largest in U.S. history

By Stan Dorn, Director, Health Policy Project, UnidosUS

If the pending House Budget Resolution passes and is implemented in Budget Reconciliation legislation, Medicaid would experience the largest cuts in its history. In fact, the current proposed cuts are larger than the combined total of cuts made by all previous federal legislation, in eight separate Budget Reconciliation bills.

It is not plausible to claim, as some suggest, that cuts of such historic magnitude could be made by reducing “waste, fraud and abuse” and trimming the program’s “useless fat.” Deep cuts to Medicaid’s muscle and bone are certain to result under the Budget Resolution. It would take away health coverage from millions of children, people with disabilities, older adults, pregnant women and workers at low-wage jobs without health benefits who rely on Medicaid. That would limit their access to essential health care and leave them exposed to potentially ruinous medical bills. People of all backgrounds would have their lives upended, but Latino families would suffer particularly deep harm.

If the Budget Resolution passes in its current form, Medicaid cuts in Budget Reconciliation would almost certainly exceed the $880 billion minimum savings target the Resolution assigns to the House Energy and Commerce Committee (HEC). For Budget Reconciliation to lower tax revenues by the targeted $4.5 trillion amount, cuts must exceed, by $500 billion, the specific savings targets assigned to all committees.  If those extra cuts are spread proportionately among all committees, HEC would need to cut spending by $1.17 trillion. If, as seems likely, HEC would take more than 75% of that amount from Medicaid, rather than Medicare and other programs, Medicaid cuts will exceed $880 billion.

Medicaid cuts of that magnitude would far exceed any previously made in U.S. history. Eight budget reconciliation bills that cut Medicaid have been scored by the Congressional Budget Office (CBO), passed by Congress and signed into law. Because of differences in the number of years for which CBO scored each bill — the so-called “scoring window” — one cannot simply compare the magnitude of total cuts in past legislation to the 10-year savings target in the House Budget Resolution. However, two metrics make a reasonable comparison possible, despite scoring windows of different sizes: average annual Medicaid cuts during the applicable scoring window and the percentage of total Medicaid spending cut by the legislation during the scoring window.

Using either metric, the Budget Resolution’s Medicaid cuts would vastly exceed all past Medicaid cuts ever signed into law (Table 1):

• The $88 billion average annual Medicaid cut under the House Budget Resolution would be more than 15 times the size of the largest previous cut, the Deficit Reduction Act of 2005’s average annual reduction of $5.8 billion in January 2025 dollars.
• The 13% drop in projected Medicaid spending under the House Budget Resolution would be more than twice the size of the largest previous percentage drop that resulted from two sequential budget reconciliation bills added together: namely, the 5.0% Medicaid spending reduction that, according to CBO, resulted from the Omnibus Budget Reconciliation Acts of 1981 and 1982.
• Using either metric, the cuts proposed by the Budget Resolution would exceed the cuts made by all previous Budget Reconciliation legislation combined: $88 billion under the current Budget Resolution vs. $18.1 billion from all previous cuts combined and 13.1% of Medicaid spending compared to 12.3%.

Table 1. Past Medicaid cuts made through Budget Reconciliation bills vs. the current House Budget Resolution 

Notes: (1) Past savings estimates were updated from the month of the applicable CBO score to January 2025 dollars by using the BLS Inflation Calculator. (2) The $880 billion estimate for Medicaid cuts under the House Budget Resolution assumes that: (a) the total House Energy and Commerce Committee (HEC) savings target would grow from $880 billion to $1.17 trillion to contribute a pro-rata share of the $500 billion in unspecified savings required for Budget Reconciliation to include $4.5 trillion in tax cuts; and (b) at least 75% of HEC savings would be achieved through cuts to Medicaid, rather than to portions of Medicare and other programs within HEC jurisdiction. (3) To estimate the impact of an $880 billion Medicaid cut, as a percentage of total Medicaid spending over CBO’s 10-year scoring window, the cut was compared to baseline CBO projections for federal Medicaid costs in FY 2025-3034. (4) To estimate past laws’ impact, as a percentage of total federal Medicaid spending, the percentage cut made by OBRA-81 and OBRA-82 was calculated by CBO. For other legislation, the saving estimate for each year was adjusted, based on the BLS Inflation Calculator, into the equivalent dollar amount in December of the year being estimated. For example, the OBRA-93 estimate of Medicaid savings in 1995 was translated from dollars in August 1993, when CBO published its score, to dollars in December 1995. The sum of Medicaid cuts adjusted in that way was then compared to baseline federal Medicaid spending as shown in CMS’s Historical National Health Expenditure reports. For the BBA, that was not possible, since CBO presented a net Medicaid savings figure for five years, without stating net Medicaid savings for each year. The BBA estimate displayed here therefore overestimates the percentage impact on total Medicaid spending by updating the scored five-year savings amount based on inflation through December 2002, the final year of the CBO scoring window for BBA. For additional information about the methodology used to develop these estimates, including methodological limitations, please contact Stan Dorn at UnidosUS, [email protected].

Such unprecedented Medicaid cuts would harm millions of people of all races and ethnicities. But Latinos are especially likely to work at low-wage jobs that do not provide health benefits, so Hispanic families would suffer particularly widespread harm. Based on American Community Survey data for 2023, analyzed via IPUMS USA, University of Minnesota, www.ipums.org:

• Medicaid provides health insurance to 20.3 million Hispanic Americans — nearly a third of the entire Latino community.
• More than half of all Hispanic children rely on Medicaid for their health care.
• Medicaid covers almost 3 in 10 Latino elders, age 65 and older, many of whom need Medicaid for critical long-term services and supports.

Medicaid is a crucial lifeline for the Latino community. But the House Budget Resolution would take this lifeline away from millions of Hispanic families and other everyday Americans. It would end their insurance, increase the burden of health care costs they must shoulder and gravely impair their access to essential health care.

The proposed Medicaid cuts would be historic, and not in a good way. All of America, including the country’s Latino families, will be watching carefully to see whether Congress agrees to the House Budget Resolution proposal for radical and extreme cuts to the health care system on which tens of millions of working and middle-class people rely.