07.16.25

Debunking Democrats’ Medicaid Fearmongering Campaign

Republicans’ Reconciliation Law Strengthens Medicaid for Its Intended Recipients - No Matter What Democrats Say

DEMOCRATS CLAIM REPUBLICANS ARE “KICKING PEOPLE OFF MEDICAID,” BUT AMERICANS WHO NEED MEDICAID WILL STILL HAVE ACCESS TO IT

“This monstrosity of a bill is about one thing: Republicans’ insistence on passing more tax breaks for billionaires and giant corporations while they kick working people off their health care, rip away nutrition assistance, and make it harder for struggling families to get by.” – Sen. Patty Murray (D-Wash.)

  • Americans who need Medicaid will have access to it. In fact, the law preserves and strengthens Medicaid for Americans who need it in two ways:
    • First, it removes noncitizens and others who are ineligible from the program.
    • Second, it requires able-bodied Americans – without children under the age of 14 or other dependent relatives – to work or otherwise contribute in their community in order to stay on Medicaid. (U.S. Senate Committee on Finance: Crapo Highlights Tax Wins for Hardworking Americans and Main Street – 6/28/25;U.S. Senate Committee on Finance: 2025 Tax Reform – accessed 7/15/25)
  • Democrats voted to use taxpayer dollars to fund health coverage for millions of illegal immigrants and opposed simple work requirements, which are supported by a large majority of Americans. (Motion to Waive re: Blackburn Amdt. No. 2401: Roll Call Vote #345 – 6/30/25; Motion to Waive re: Cornyn Amdt. No. 2705: Roll Call Vote #342 – 6/30/25; Wyden Motion to Commit: Roll Call Vote #335 – 6/30/25; Kaiser Family Foundation: KFF Health Tracking Poll February 2025: The Public’s Views on Potential Changes to Medicaid – 3/7/25)

SENATE DEMOCRAT LEADER CHUCK SCHUMER SAID THE LAW IS “IRREDEEMABLE,” BUT MANY OF THESE REFORMS HAVE BIPARTISAN OR NONPARTISAN ORIGINS

“Senate Republicans betrayed the American people and covered the Senate in utter shame… This bill is so irredeemable…” – Senate Democrat Leader Chuck Schumer (D-N.Y.)

  • Work requirements:
    • In 1996, then-President Bill Clinton (D) implemented work requirements in order for Americans to continue participating in welfare. Similarly, Republicans’ reconciliation law requires those who can work to do so in order to continue participating in Medicaid. (U.S. Social Security Administration: 1996 Welfare Amendments – accessed 7/15/25; U.S. Senate Committee on Finance: Crapo Highlights Tax Wins for Hardworking Americans and Main Street – 6/28/25)
    • According to a March poll, 62% of Americans support Medicaid work requirements, including 82% of Republicans and 60% of independents. (Kaiser Family Foundation: KFF Health Tracking Poll February 2025: The Public’s Views on Potential Changes to Medicaid – 3/7/25)
  • Lowering provider taxes:
    • Then-President Obama proposed in 2012 “to limit these types of State financing practices that increase Federal Medicaid spending by phasing down the Medicaid provider tax threshold from the current law level of 6 percent in 2015, to 4.5 percent in 2015, 4 percent in 2016, and 3.5 percent in 2017 and beyond.” Republicans’ reconciliation law reduces the Medicaid provider tax threshold to that level for certain states after a transition period. (Obama White House: The President's Budget for Fiscal Year 2013 – 2/13/12)
    • “In 1991 George H.W. Bush signed bipartisan legislation to crack down on this scheme, which even Nancy Pelosi and Chuck Schumer voted for. The law forbids Medicaid taxes that have the effect of holding providers harmless—as nearly every state tax today does.” (The Wall Street Journal: Editorial: The Great Medicaid Hospital Scam – 6/25/25)
  • Reforming state-directed payments:
    • In a 2023 report, the nonpartisan Government Accountability Office noted the increased burden on Medicaid financing resulting from state-directed payments: “State directed payments were intended to be exceptions to how managed care payments are made, but now represent a significant and growing proportion of managed care spending… CMS has not developed fiscal guardrails sufficient to ensure that state directed payments result in provider payment rates that are reasonable and appropriate.” (U.S. Government Accountability Office: Rapid Spending Growth in State Directed Payments Needs Enhanced Oversight and Transparency – December 2023)
    • The nonpartisan Medicaid and CHIP Payment and Access Commission found that, as of August 2024, state-directed payments totaled $110.2 billion, a 60 percent increase from the $69.3 billion in February 2023. (U.S. Medicaid and CHIP Payment and Access Commission: Directed Payments in Medicaid Managed Care – October 2024)

DEMOCRATS SAY THIS LAW WILL ENDANGER RURAL HOSPITALS AND FORCE MANY TO CLOSE, BUT INSTEAD THE BILL MAKES A GENERATIONAL $50B INVESTMENT TO STRENGTHEN HEALTH CARE, INCLUDING IN RURAL COMMUNITIES

“Cuts to Medicaid don’t just hurt Americans on Medicaid, they raise costs across the board and close hospitals that rural communities rely on.” – Sen. Amy Klobuchar (D-Minn.)

“Republican cuts to Medicaid will take trillions out of our health care system and force our rural hospitals to close.” – Sen. John Hickenlooper (D-Colo.)

  • Republicans’ reconciliation law protects the state-federal partnership at the heart of Medicaid by, over time and three years from now, limiting states’ abilities to use financing gimmicks to shift costs to the federal taxpayer. (U.S. Senate Committee on Finance: Crapo Highlights Tax Wins for Hardworking Americans and Main Street – 6/28/25; Morgan Lewis: ‘One Big Beautiful Bill Act’: Key Final Medicaid Changes Explained – 7/9/25; U.S. Senate Committee on Finance: 2025 Tax Reform  – accessed 7/15/25)
  • It also provides $50 billion over five years to states to direct funding to vulnerable health care providers, including those in rural areas, which will be made available this year. (Politico: GOP boosts rural hospital fund – 7/1/25; Paragon Health Institute: Championing Senate Reforms and Countering Rural Hospital Hysteria in the Fight Against Medicaid Money Laundering – 6/27/25)
  • This significant investment will not only support providers through any transition period but will also make resources available for investments in technology and workforce that will bolster long-term financial viability to ensure Americans get access to the care they need. (Bipartisan Policy Center: Rural Hospitals and the Rural Health Transformation Program: What Comes Next – 7/10/25)


LEADER SCHUMER SAID NURSING HOMES WOULD CLOSE UNDER THE LAW, BUT IT DOES NOT CHANGE HOW NURSING HOMES ACCESS MEDICAID FUNDS AND BLOCKS A HARMFUL BIDEN-ERA POLICY FOR NURSING HOMES

“They will have to explain why kids who need health care shouldn't get it so they can give tax breaks to millionaires. Or why middle class families who have someone in a nursing home who is now going to be removed from that nursing home because it’s going to close what they’re going to do.” – Senate Democrat Leader Chuck Schumer (D-N.Y.)

  • The law does not change the way nursing homes access federal Medicaid matching funds. (U.S. Congress: H.R.1 - One Big Beautiful Bill Act – accessed 7/15/25)
  • In fact, the law blocks a radical Biden-era policy that could have forced nursing home closures across the country. (U.S. Senate Committee on Finance: Senate Finance Committee Section-By-Section – 6/16/25)
    • A bipartisan group of 13 senators from mostly rural states pleaded with the Biden administration “to abandon the minimum-staffing mandate, saying it would undermine access to care,” and could even “lead to the shuttering of facilities, especially in rural communities.” (The Wall Street Journal: Nursing Homes Must Boost Staffing Under First-Ever National Standards – 9/1/23; Sen. Barrasso: Barrasso, Tester, Daines, Hickenlooper Push Biden Admin to Address Rural Nursing Home Staffing Shortages – 1/20/23)

THE BOTTOM LINE: REPUBLICANS’ LAW IMPROVES COVERAGE FOR THE MOST VULNERABLE AMERICANS ON MEDICAID

  • The law puts Medicaid on a more sustainable fiscal path for the federal taxpayer and refocuses it toward the groups it was originally intended to protect: mothers, the elderly, people with disabilities, and low-income children. (U.S. Senate Committee on Finance: Crapo Highlights Tax Wins for Hardworking Americans and Main Street – 6/28/25)
  • It makes a historic investment to expand home and community-based services for individuals with developmental disabilities, reducing multi-year waiting lists and allowing individuals with disabilities across the United States to access the care they need at home or in their communities. (U.S. Congress: H.R.1 - One Big Beautiful Bill Act – accessed 7/15/25)
  • It also boosts pay for physicians, prioritizes finding cures for rare diseases, and expands access to personalized health savings accounts, including by allowing patients with high-deductible health plans to use telehealth services prior to reaching the deductible. (U.S. Congress: H.R.1 - One Big Beautiful Bill Act – accessed 7/15/25)