Editor’s note: This piece was originally published by the Center on Law and Social Policy (CLASP) on May 16, 2025 and is part of their five-part series entitled, The 2025 Budget Reconciliation’s Impact on People with Low Incomes. The series will examine the policies put forward that have particular resonance for the children, families, and communities with low incomes. This is the fourth blog in the series. The author of this blog post is Suzanne Wikle, Associate Director for State Health Policy and Advocacy at CLASP. CLASP is a member of the Coalition on Human Needs.

On May 13, the House Energy and Commerce Committee began marking up its portion of the GOP’s proposed reconciliation bill. One of the main topics of discussion was changes to Medicaid.

Medicaid currently provides health insurance for over 70 million people, including 30 million children and 60 percent of all nursing home residents; the program also covers 40 percent of all births in the United States. In addition, Medicaid is the largest payer of mental health care in the country, paying for 1 in 4 dollars spent on mental health care.

Policymakers have proposed cuts totaling $715 billion to the program, which, if enacted, would represent the largest cuts to Medicaid in its nearly 60-year history. Based on the committee’s text, the Congressional Budget Office estimates that at least 8.6 million people on Medicaid would lose their health insurance by 2034. Combined with other health care cuts, the reconciliation bill is estimated to cause 13.7 million people to lose health insurance.

The proposed changes include introducing work requirements, shifting costs to states and individuals, and increasing red tape:

Work Requirements

While states were allowed to implement work requirements through a waiver process during the first Trump Administration, there has never been a federal work requirement for people to access Medicaid.

The work requirements program proposed in this bill is modeled after a work requirements program in Georgia. An evaluation of that program conducted after its first year of operation found that not only did the requirement increase eligibility, but it also cost the state $58 million, greatly increased the paperwork requirement for eligible applicants, and shifted the cost burden to Georgia taxpayers.

As both the Georgia experiment and decades of research show, policies like this do not meaningfully increase employment, particularly not the kind of employment that offers affordable health insurance. Rather, work requirements are just a cut to Medicaid by another name. They implement burdensome paperwork requirements that cause eligible people to become disenrolled and lose their health insurance. Work requirements also increase administrative costs to states, which will have to stand up new components of eligibility systems to implement this provision.

Although the bill has many exemptions, the reality is that those exemptions don’t often work as intended. For example, if someone has a medical condition that is considered serious and complex and thereby qualifies for an exemption, how will they obtain documentation of their condition if they are uninsured? If a doctor’s note is required to prove a medical condition, how will someone get that before they enroll? And who at the state level is determining whether the note is enough proof to qualify for exemption? The process will be cumbersome and complicated, and many people who are eligible will fall through the cracks.

More Frequent Redeterminations

Currently, most adults insured through Medicaid receive a 12-month determination if they are deemed eligible. They are required to submit any changes to the state that would affect their eligibility at any point during their enrollment, and many states do behind-the-scenes checks against state wage databases to ensure people remain eligible.

These checks and balances are adequate to ensure that people receiving Medicaid are indeed eligible for the program. Implementing more frequent checks – including redeterminations every six months for certain individuals – will only increase the number of eligible people losing coverage and re-enrolling. The only purpose of this provision is to cut people off Medicaid.

Codifying Exclusion of DACA Recipients

Deferred Action for Childhood Arrivals (DACA) recipients have long been excluded from coverage until a rule the Biden Administration made them eligible for coverage under the ACA Marketplace. The current bill language would codify into law a Trump Administration rule that excludes DACA recipients from health coverage. Over a quarter of a million children have a parent with DACA, the vast majority of whom are U.S. citizens. Research has shown that children of uninsured parents are more likely to be uninsured themselves than the children of parents with insurance coverage.

Shifting Costs to Individuals

The bill would require people living above the poverty line to pay $35 for each medical encounter, up to a certain limit. This is a direct cost shift to people and will be prohibitive for many people to access care.

In addition, the bill would eliminate the special enrollment period for people making under 150 percent of the poverty level to enroll in insurance through the Marketplace; allow states to change retroactive coverage from 90 days to 30 days; and prohibit Medicaid and the Children’s Health Insurance Program from allowing gender affirming therapy as an Essential Health Benefit. All of these amount to more out-of-pocket costs for individuals and families.

Shifting Costs to States and Reducing State Autonomy

The bill calls for reducing the Federal Medical Assistance Percentage (FMAP) by 10 percent in states that choose to use state dollars to cover people regardless of their immigration status, which restricts states’ autonomy over their own health care programs and sets a dangerous precedent. While federal law restricts undocumented immigrants’ access to federally supported health coverage, it doesn’t limit states’ ability to spend state dollars on similar programs. No member of Congress should support a provision that places such limits on a state’s own budget authority.

Cutting federal Medicaid funding to states that use their own funding to provide benefits to immigrants would harm all families, including U.S. citizens. This proposal is a direct cost-shift to states, which will have to replace the lost FMAP or cut people, regardless of immigration status, off Medicaid. Estimates show that states could lose up to $75 billion in funding through fiscal year 2034.

Bottom Line: This Bill Cuts Eligible People Off Medicaid

As currently written, the committee’s proposal makes it more difficult for millions of people to apply and to stay enrolled despite being eligible. It increases costs to states, will increase their administrative burden, and undermines their ability to ensure all communities in their states have access to health insurance coverage. By denying people affordable health care, this bill threatens the safety and well-being of communities, states, and the entire country.