The real political fight—including Medicaid and Medicare—is about to start. Rest, light a candle, or drink up.
While it can be tempting to go unconscious about budgeting, what happens will have a major impact on us as woman, and on our families and communities. Here's a primer.
Updated March 15, 2025 to include corrections on annual income amounts.
Updated December 26, 2024 after passage of House bill. Includes (gifted) NYT article on what comes next in House Energy and Commerce Committee that controls Medicaid and Medicare spending and must find $880B in cuts. We will continue to update this as events unfold.
We know DC is exhausting. But there have been some encouraging twists this week already, and what happens in the budget is big for women, families and our communities.
Why do women need to think about cuts to Medicaid or Medicare?1 In our role as Chief Medical Officers for our extended families and half the ‘hood, whatever happens on healthcare funding is going to hit us, those we love, and/or those we guide at work or in the community. The odds are you, yours, or others you love are covered by Medicaid or Medicare, or wish they were, or by Obamacare. In the US, just under 6 of 10 Americans are covered by one of those payment plans; things have changed since the employer insurance heydays of the last century.
Almost 45% of the population is covered by Medicaid or Medicare. Another 15% is covered by Obamacare, also a potential battle, but one that won’t show up until mid-year and one that Republicans are increasingly reluctant to fight. But Medicaid in particular, at least for now, will be front and center on your screens starting right away, because the first real DC battle on money will be about that.
DOGE was simply a warm-up, and has put been put in at least one sit-stay. Musk has been pushing Trump’s envelope for a couple weeks on multiple fronts2. It’s never been a smart plan to be out in front more than Trump. DOGE took its first serious hit when Trump told everyone to ignore Musk’s email dictum to document what they did at work the prior week, although by Wednesday, Musk was back conning the Cabinet. True to gaslighting form, Trump is simultaneously bragging about “more than a million” employees responding to Musk’s email order. [“You didn’t see what you thought you saw. Here’s reality and also I won in 2020 and Ukraine started the war.”]
Even before that on Monday, every TV station in the HUD building turned the whole Trump-Musk bromance into a lewd joke (twice as bad as a mere joke), yet another push over his Rubicon for Musk. In the meantime, Trump’s approval rating is down to 44%, which still beats Musk: not even Republicans, it appears, approve of DOGE. Historically, there’s little here to please Trump and a lot that needs to be blamed on someone else.
Meanwhile, Tuesday’s DOGE news:
Multiple media found big holes in alleged DOGE announced savings last week and DOGE quietly deleted the five biggest spending cuts it celebrated.
Shielding Musk for now from seeing the undercarriage of the bus, the WH announced Tuesday that Ann Gleason really runs DOGE, not Musk. Honest. How could you have missed that? According to CBS, Gleason’s response was that “she was in Mexico and declined to comment further.” [Note to Gleason: you might want to build a permanent home there.]
Cabinet infighting about Musk is now out in the open, following the warm-up act between Bannon and Musk, two of our most cherished leaders.
All this was on the heels of the largest pension fund in Europe ditching a $6B stake in Tesla and urging other European pension funds to do the same.
Why the coming budget fight will be massive
The coming budget issues aren’t nearly as esoteric as Congressional talking points would have us believe. Here’s where the fault lines are:
Let’s set the stage: By March 15, we either need a budget that meets Trump’s needs to find $4.6T to pay for his proposed tax cut extension alone—without even thinking about what else he wants to do, like tighten the border—or shut down the country.
Here’s why we need to pay a lot of attention to that: As was the case after the first tax cut, the top 5% of Americans will again get nearly half the benefit—something people have finally started to figure out, including Congress. If you’re among the 17 million Americans that made at least $336,000 in 2023, you’re in that 5%. If not, well, you’ll split whatever is left with 323 million of the rest. Not everyone likes that balance—particularly the bottom 50% of the population who make from $15,000/year to $75,000/year.
One possibility, of course, is to keep fumbling around and just shut down the country. Most politicians have developed a deep allergy to that.
Despite all the drama and casual cruelty, DOGE’s savings—even at $55B before today’s “adjustments”—would have been a drop in the $4T bucket.
For once, it’s pretty simple math: there are only three places that much money can come from: Defense or entitlements (together 86% of the budget), or adding to the deficit. And, of course, adding to the deficit must be out, right? After all, Trump and Republicans all campaigned on how they’d reduce the deficit. That’s what DOGE was all about. So that leaves entitlements and Defense…right? [Yes, cynicism…Dems—who have contributed only slightly less to the deficit—often make the case that the only time Rs seem to care about the deficit is when Ds are in power, as this article predicted four years ago. And Trump already tried to get rid of the deficit ceiling in December.]
See more here about how worried you should be over the deficit—the largest we’ve ever had as a nation (123% of GDP). And when we fixed the last largest deficit (106%), it was in large part due to levying taxes—not cutting them—to yield a surplus over spending. [If you have insomnia, try reading this analysis by the IMF.]
As usual, Trump priorities on entitlements and Defense are…let’s call it ‘fluid.’
On Tuesday, Trump repeated again that there would absolutely be no cuts to Social Security, Medicaid, or Medicare. On Wednesday, he said he liked the House “One Big Bill” budget proposal, which calls for $1T total Medicaid and SNAP (food assistance) cuts.
Trump also likes Johnson’s current budget plan to boost Defense spending. This would be the same DOD that he has cutting expenditures by 8% per year over each of 5 years. [Why am I seeing shells on the table?]
80M Americans—almost one in four—are on Medicaid, even after the post-pandemic “unwinding” of Medicaid enrollment. Many of these are fully-employed workers who are paid so poorly they qualify for the poverty level, enabling the rest of us—you and me—to pay for the health benefits their employers won’t. (That’s one reason another House rallying cry—requiring Medicaid recipients to work—doesn’t hold water. More than 90% of covered adults are already working.) Food service, retail, healthcare (think home care in particular), and agriculture have the highest percentage of employees not covered by employer health insurance.
Medicaid and SNAP cuts will impact rural residents—a Trump stronghold— more than urban. Children, in particular, will be more affected in rural areas; no politician wants to make the news denying healthcare to children. For perspective, a $880B cut in Medicaid would be about 11%, and the proposed SNAP cut would be about 22%. Those are significant cuts.
The rallying cry of both the House and the Senate is they’re going to save “Medicaid fraud, waste and abuse.” However, independent estimates put the likely amount of that at about 5.09% or about $31B in improper payments—hardly $4T.
The House and the Senate have approached the budget differently. Johnson’s approach in the House is the Trump-favored “One big, beautiful bill” that covers all of Trump’s campaign promises and also adds $3T to the deficit. The Senate has been focused on separate bills; in particular, they’d prefer to deal with funding Trump’s tax cut extension later this year.
Neither bill yet includes any specifics on where budget cuts will occur—just that the cuts must occur. Opening shots, not the war. Fantasy budgeting at this point.
Democrats aren’t going to help; they’ve been lying in wait, salivating, for this one because history says if you mess with healthcare, you get voted out in the next election.
To add more intrigue, after dragging their feet for years, several red states have now expanded Medicaid, which is 90% funded federally—so will be affected by any cuts in this budget. A total 41 states have now expanded Medicaid, including almost all but Texas and the usual southeastern block—the same states with some of the worst state healthcare rankings in the country. And the red states that have so far resisted expansion are facing a lot of pressure to accept it.
Note the House proposal would force the states to either take on additional costs to fund the expansion or cut benefits. While Trump et al have talked about states making their own decisions (e.g., on abortion), what’s also showing up is forcing states to take on more costs.
One ‘quiet’ issue that led to red states accepting Medicaid expansion: their teaching hospitals and physicians were suffering without it. Without expansion there were more patients without any insurance; with it, Medicaid pays.
What’s next?
The Senate passed their version last week, and the House passed their version late on February 25 by a margin of only two votes. The House version also increases the debt limit, and it took personal calls from Trump to several representatives to get that done—for now. At least three of those votes were reluctantly given by deficit hawks who have a feeling they know where this may really be headed.
Neither version yet has any details on where cuts should occur—just that they are to occur. The “where” is now the business of Committees. The House version, for instance, requires the Committee on Energy and Commerce to cut $880B. (A separate House committee—Agriculture—controls SNAP food assistance.)
This NYT article today (gifted article) shows Energy’s options and summarizes what they could do:
Cut Medicare instead—incredibly politically-fraught on both sides of the aisle. [Remember, Medicaid is predominantly funded by the states, which is why the excellent graphic shows more Medicare than Medicaid funding.]
Cut everything else they control. If they cut 100% of that, they’d still be $600B short of Johnson’s charge.
Consider options that aren’t exactly cuts, even if they don’t add up to $880B. (In fact, they add up to very little.)
Cut Medicaid after all. If Trump is soft on anything, it’s more likely to be Medicaid than Medicare.
The political background:
In the House, Johnson is dealing with the thinnest margin in a hundred years: only a 3-vote margin after Mike Waltz (R, FL) resigned Monday to become National Security Advisor. There are at least 4 Republican representatives who are already on record opposing the budget, and many more members represent large shares of Medicaid and SNAP recipients.
In the Senate, there is more caution on not just dealing with healthcare politics, but also a tacit acknowledgment of the imbalanced impact of the tax cut, both of which are why they’d prefer to deal with the tax cut extension separately after Trump gets rewarded on other fronts in the budget.
Senators are already lining up against Medicaid cuts that will impact rural populations, particularly in the rust belt. In Ohio, for instance, in one of Sen. Bernie Moreno’s districts, 4 out of 10 residents are on Medicaid; he’s already on record opposing cuts to Medicaid.
All of this actually goes to a philosophical and moral issue NO one in congress wants to tackle. A battle has been brewing slowly for years over whether healthcare funds go to the young (Medicaid) or the elderly (Medicare).3 For instance, neonatal ICUs—saving our smallest, most threatened babies—are heavily dependent on Medicaid dollars. I won’t get into the finances, but suffice it to say that one NICU bed in a high level (tertiary) hospital often generates more revenue annually that one of its adult cardiac ICU beds. NICUs are the foundation of children’s hospitals finances. [I know something about this.] And many of those NICU babies have significant lifetime health issues, also predominantly underwritten by Medicaid. Against that, you have dollars going to Medicare for the elderly, who have multiple diseases and increasingly expensive treatments that may only yield a couple years more of life.
We’re not going to settle that one any time soon…just keep in mind our unwillingness to consider it is what’s really what’s behind much of what we’re dealing with on the surface, including the deficit.
Medicaid, Medicare and Social Security are called “entitlements,” not as a deprecatory term (despite that implication by some), but because they are required by laws enacted by Congress—laws that entitle recipients. Congress has to pass other laws to change them, which is why you haven’t seen DOGE activity here.
The Oval Office interview where Trump was forced to look up and behind him to listen to Musk—and with Musk’s 4 YO son confronted Trump—was guaranteed to not be a Trump fav. The Resolute desk was removed for refinishing the following day apparently after an incident involving Musk’s son, his nose, and the desk. You cannot make this stuff up.
Yes, about 20% of total Medicaid dollars go to the elderly, but it’s much less than what goes to younger adults and children. Importantly, Medicaid funding for the elderly includes nursing home care—another cost (and dollar battlefront) increasing as Boomers age.