WASHINGTON — How can Congress cut Medicaid without explicitly cutting Medicaid?

That has been a years-long dilemma facing fiscal conservatives in the Republican Party who have sought cuts to the country’s deficit-driving social safety net programs, including Medicaid, Social Security and Medicare, without generating political fallout from the tens of millions of Americans who will suffer the consequences.

Now, GOP lawmakers have settled on a strategy, outlined in legislation expected to pass the House in the coming days amid ongoing negotiations over the package that President Trump is calling his “Big Beautiful Bill.”

Rather than lowering the income eligibility limit for coverage — an old policy proposal that would cut off Americans at the higher end of the eligibility range — Trump’s bill will instead require applicants to provide proof of their work hours and apply for specific exceptions, creating new barriers for individuals to maintain insurance.

House passage of the bill is far from assured, and the Senate will still have its say. But if it does become law, the policy would affect more than 71 million of the poorest Americans, more of whom live in California than any other state.

Barriers to entry are the point

If everyone eligible under the new work requirements were to apply for and receive Medicaid coverage, the cost savings to the government would be minimal. But the barriers themselves are the point, making it more likely that people with a right to Medicaid won’t ultimately receive it, experts said.

“If you want to make a substantial cut to the program, how do you do that in a systematic way?” said Matt Bruenig, founder of People’s Policy Project and a former lawyer at the National Labor Relations Board.

“With the work requirements, the number of people who seem to be actually ineligible because of it is quite small — so if it actually is perfectly administrated, you’re not going to see a whole lot of savings,” Bruenig said. “But if it’s not well administrated and it creates all these problems, then you could see significant savings.”

Existing government programs, such as Social Security, unemployment and supplemental nutrition assistance for women, infants and children, determine eligibility for those benefits based on an individual’s income. But creating a new set of criteria for Medicaid based on hours worked will require a new reporting system that is not outlined in the bill.

“We have all these systems that are based around making sure people have the earnings that they can report to all these agencies, but you don’t really report hours in any context,” Bruenig added. “Monthly hours — that’s just not a thing. And it’s not clear how that’s going to work, at all.”

Who counts as ‘waste, fraud and abuse’?

Trump and members of the House Freedom Caucus, a group of Republican fiscal hawks, have argued for a strict hourly work requirement to eliminate “waste, fraud and abuse” in Medicaid by cutting off unproductive individuals from government benefits.

But exemptions suggested in the draft legislation — parents caring for young children or elderly parents, individuals dealing with health issues, those between jobs — reflect the range of reasons why Medicaid recipients may fall below the proposed hourly requirement. And each time an exception arises, individuals will have to refile, increasing the likelihood they will simply let their coverage lapse.

It also will force working individuals who would otherwise be eligible — such as Americans working gig jobs for DoorDash or Uber, for example — to account for hours worked transiting between jobs that don’t generate receipts.

“They just are not finding very much at all,” said John Schmitt, a senior research fellow at the Center for Economic and Policy Research and a senior economist at the Economic Policy Institute, when asked whether ineligible individuals are routinely receiving Medicaid.

“The real problems are not with individuals taking advantage of Medicaid,” Schmitt added. “It is with healthcare providers taking advantage of Medicaid, in the sense of the way they bill and provide services to people. And that is not going to be changed in any way, whatsoever, by imposing a work requirement.”

The Congressional Budget Office said it is these Medicaid recipients who will either fall behind or grow fed up with the paperwork, resulting in 7.6 million losing coverage under the plan and saving the federal government roughly $800 billion.

California will be hit hardest

The effects of Medicaid cuts will be felt nationwide, but most pointedly in states that expanded Medicaid coverage under the Affordable Care Act. On that score, Democratic states such as California lead the way.

A state assessment published Sunday found the GOP bill would “cause serious harm to California’s health care system,” possibly resulting in up to 3.4 million residents losing coverage.

No state has more workers on Medicaid than California, where 18% of its workforce receives benefits from the program, according to a study from the Center for Economic and Policy Research.

“Millions will lose coverage, hospitals will close, and safety nets could collapse under the weight,” Gov. Gavin Newsom said in a statement. “We must sound the alarm because the stakes couldn’t be higher.”

But the political stakes are high for Republicans as well.

Stephen K. Bannon, a former campaign aide and White House strategist to Trump, warned in recent days that the party has “gotta be careful” with Medicaid, given its widespread use among low-income GOP voters.

“A lot of MAGAs are on Medicaid, I’m telling you,” Bannon said on his podcast. “If you don’t think so, you are dead wrong.”

Trump, for his part, seems of two minds on the matter. Cuts to Medicaid, as well as to food stamp programs and green energy tax benefits, will be required to get the bill passed with support from the Freedom Caucus, which says the renewal of tax cuts initially passed in the first Trump administration must be offset with savings elsewhere.

“Here’s what I want on Medicaid: We’re not touching anything,” Trump said Tuesday, taking questions from reporters on Capitol Hill. “All I want is one thing. Three words. We don’t want any waste, fraud or abuse. Very simple — waste, fraud, abuse.”

But in a private meeting with GOP lawmakers, his guidance was sharper. “Don’t f— around with Medicaid,” the president reportedly said.

What else you should be reading

The must-read: White House pushes for quick approval of ‘big, beautiful bill,’ but key hurdles remain
The deep dive: Villaraigosa blasts Harris and Becerra for not speaking out about Biden’s decline
The L.A. Times Special: Congressional leaders call for streamlined visa process ahead of World Cup, L.A. Olympics

More to come,
Michael Wilner
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