Republicans in Congress are considering a proposal that would force low-income Americans to pay more out of pocket for Medicaid coverage, a move critics argue would sharply cut access to healthcare in order to fund new tax breaks for the wealthy. The plan, revealed this week in The American Prospect, is part of the GOP’s developing reconciliation package and includes several measures aimed at reducing federal Medicaid spending while allowing for sweeping tax cuts under budget constraints.
“Making poor people pay more for healthcare is exactly the kind of effective cut to Medicaid that moderate Republicans have sworn they would not abide,” wrote David Dayen, executive editor of The American Prospect, in his report. “While reducing the federal share of Obamacare’s Medicaid expansion… is not part of the menu, this is a backdoor way of achieving something like that reduction, on the backs of individuals who get Medicaid.”
At the center of the proposal is a provision described in legislative text as “cost-sharing above 100% FPL,” referring to the federal poverty level. Under the plan, Medicaid recipients earning just above the poverty line—$15,650 for a single person or $21,150 for a two-person household—would face mandatory payments for their care. These could include premiums, co-payments for hospital visits and treatments, or other fees.
Currently, Medicaid allows states to impose nominal out-of-pocket expenses, but with strict limits and exemptions for many vulnerable populations. As Dayen explained, “Some premiums and enrollment fees are limited to beneficiaries above 150% of the poverty line; this policy would take that number lower.”
Matt Bruenig, founder of the People’s Policy Project, warned that the financial burden of the policy would effectively act as a regressive tax on those least able to pay. “Whether you call it a co-pay, a premium, a fee, or a tax, the net result is either a reduction in the disposable incomes of those subject to the cost-sharing or people forgoing healthcare,” Bruenig said. “When I look out into the American income distribution for places where I’d like to cut things back, families with incomes between 100 percent and 138 percent of the poverty line is not where my eye tends to go.”
National Working Families Party director Maurice Mitchell echoed that concern, calling the proposal a thinly veiled attempt to extract revenue from the poor to benefit the rich. “Republicans want to hike Medicaid premiums and copays to pay for massive tax cuts for the rich,” Mitchell said. “The fix is in. They care more about tax breaks for their billionaire donors than keeping costs low for families in their own districts.”
The proposal also includes a host of additional cuts and restrictions designed to reduce Medicaid spending. Among the most controversial is the return of work requirements for so-called “able-bodied adults without dependents.” Despite claims that such requirements promote employment, research and past implementation have shown otherwise. In Arkansas, where work requirements were piloted during the Trump administration, thousands of eligible recipients lost coverage due to administrative hurdles, not changes in employment status.
According to the Kaiser Family Foundation, 61 percent of adults on Medicaid already work, and the majority of those who don’t are elderly or disabled. Allison Orris, director of Medicaid policy at the Center on Budget and Policy Priorities (CBPP), warned that the proposed changes would create unnecessary complications and administrative burdens. “A lot of these policies will add administrative costs for the states, burdens for people, the potential for more improper payments and errors in processing,” Orris said. “All of this shifting of the ball can result in people losing coverage.”
Other provisions in the GOP budget menu would repeal Biden-era reforms meant to protect vulnerable enrolls. This includes rolling back the “safe staffing” rule for nursing homes, which mandates 3.48 hours of nursing care per resident per day and the presence of a registered nurse at all times. Eliminating the rule would save just $22 billion over ten years, according to a Senate Finance Committee roadmap, but would significantly reduce care standards in facilities housing elderly Americans.
The proposal also seeks to shorten the current 90-day retroactive eligibility window for Medicaid to 30 days. This change could leave accident victims, people emerging from medical crises, and seniors applying for nursing home coverage without critical backdated support. “It’s also important for car accident victims who might take a while getting out of a coma to apply,” Orris noted.
Residents of Washington, D.C., would face additional harm under the plan. Unlike states, which use a variable matching formula for Medicaid costs, D.C. currently receives a flat 70 percent federal match. The GOP proposal would drop the district to the standard state formula, reducing the federal contribution to 50 percent and costing the local government roughly $800 million annually.
Despite these deep cuts, GOP lawmakers may still fall short of their stated goal of $880 billion in savings over ten years. Estimates suggest that the proposals laid out so far would yield closer to $400–600 billion. Still, the impact would be significant. States would likely only replace about half of the lost federal funds with their own revenues, according to the Congressional Budget Office, and would be forced to cut provider payments, reduce optional services, or limit enrollment.
“The bottom line is that the Republican bill is going to cut healthcare for kids, seniors, Americans with disabilities, and working families,” said Senator Ron Wyden (D-Ore.), who requested the CBO analysis. “Republicans continue to use smoke and mirrors to try to trick Americans into thinking they aren’t going to hurt anybody when they proceed with this reckless plan, but fighting reality is an uphill battle.”
Other proposed Medicaid changes include ending emergency coverage reimbursements for undocumented immigrants and capping the rate at which states can tax healthcare providers to receive higher federal matches—a policy that would hit red states especially hard. States like Texas and Florida rely heavily on such tactics to fund their healthcare systems.
The proposal also outlines potential cuts to other safety net programs, including the Temporary Assistance for Needy Families (TANF) program and the Social Services Block Grant (SSBG), though the details remain vague. Republican leadership is also considering a measure labeled “No $ for gender affirming care” in Medicaid. While the budget impact is minimal, it signals an ideological push embedded in the healthcare cuts.
Changes to the Affordable Care Act are also on the table, including a Trump-era rule that would raise premiums and out-of-pocket costs for many of the 20 million Americans using ACA marketplace coverage. According to CBPP, “The proposed changes would raise the cost of health coverage by hundreds of dollars for most of the 20 million people who get coverage through the ACA marketplace by reducing premium tax credits and letting insurers raise out-of-pocket charges.”
Negotiations continue as the GOP attempts to package the most contentious proposals—across healthcare, taxes, and food assistance—into a single-day markup by the Energy and Commerce, Ways and Means, and Agriculture Committees. By overwhelming opposition efforts with simultaneous hearings, Republican leaders hope to advance their plan with minimal resistance.
Committee Chair Rep. Brett Guthrie (R-KY) has not responded to requests for comment.
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