Project 2025 called Medicaid, a federal-state program that provides health care for low-income people, a “cumbersome, complicated, and unaffordable burden on nearly every state,” and “a prime target for waste, fraud, and abuse.”
The document targeted Medicaid’s funding structure for change, saying it “rewards expansions.” In particular, it criticized the Affordable Care Act for expanding Medicaid to include more people.
The ACA allowed states to expand Medicaid to adults under 65 who earn up to 138% of the federal poverty level and, in exchange, the federal government would permanently pay 90% of the cost. Forty states and Washington, D.C., have implemented that Medicaid expansion, which added an estimated 21.3 million people as of last year, according to KFF, a health policy research group.
Project 2025 suggested that the expansion of Medicaid is the reason why “[i]mproper payments within Medicaid are higher than those of any other federal program.” It claimed, “These payments are evidence of the inappropriateness of Medicaid’s expansion.” (Improper payments include overpayments and underpayments or payments that shouldn’t have been made. Experts have told us this often is due to missing paperwork.)
One solution proposed by Project 2025: “Clarify that states have the ability to adopt work incentives for able-bodied” Medicaid recipients. In his first term, Trump “encouraged states to apply for Section 1115 waivers that included work and reporting requirements as a condition of Medicaid eligibility.” Only Arkansas implemented work and reporting requirements “with consequences for noncompliance, resulting in 18,000 losing coverage,” according to KFF.
“Courts struck down many of the waiver approvals, including in Arkansas, and the Biden administration rescinded the remaining waivers, or they were withdrawn by the states,” KFF said.
This time, Trump went beyond what he did in his first term and what Project 2025 had proposed.
As we’ve written, Trump’s One Big Beautiful Bill Act mandates national work and reporting requirements, with some exceptions, for those who gained coverage under the ACA’s Medicaid expansion provision. The new law “[r]equires able-bodied adults aged 19-64 to work (or perform other qualifying activities) for at least 80 hours a month,” as explained by the Association of State and Territorial Health Officials, a bipartisan organization.
The law exempts “pregnant women, those with serious medical conditions, tribal members, parents/caregivers of a dependent child 13 years and under or with a disability” from the work and reporting requirements, the organization said, adding that the work requirements must take effect no later than Dec. 31, 2026.
“Mandating that adults who are eligible for Medicaid through the ACA expansion meet work and reporting requirements” will reduce federal spending on Medicaid by $386 billion over 10 years – making it the largest source of Medicaid savings in the law, KFF said in a July 23 article based on the Congressional Budget Office’s July 21 cost estimate.
In all, the new law will cut Medicaid spending by $911 billion over 10 years, according to a KFF analysis, and increase the number of uninsured people in the U.S. by 10 million, according to the CBO, with 7.5 million of those due to changes to Medicaid.
Holland & Knight, a Florida-based lobbying and law firm, said the impact of the Medicaid cuts, which also include limits on provider taxes states have used to help finance the program, “will vary from state to state,” adding that “states may cut Medicaid services, tighten eligibility and redetermination requirements, and/or reduce Medicaid provider payments.”
Eugene Kiely
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