Medicaid Cuts Will Hurt Rural Americans. If Congress Doesn’t Shrink Medicaid, How Can $4.5 Trillion In Tax Cuts Be Made?

Republican lawmakers had planned to cut Medicaid to help balance tax cuts.

The health of many rural Americans depends on Medicaid coverage, but that safety net seems to be threatened as Republican lawmakers plan to slash Medicaid spending to pay for President Donald Trump’s planned massive tax cuts. Meanwhile, during a recent interview, Trump insisted that Medicaid isn’t on the federal budget chopping block, reports Margot Sanger-Katz of The New York Times.

“Trump said Tuesday night on Fox News that he wouldn’t make cuts to Medicaid, the federal-state health insurance program that mostly covers poor Americans,” Sanger-Katz writes. “But making substantial cuts to Medicaid is a key part of congressional Republicans’ plan to extend the tax cuts.”

Small Towns/Rural Areas include non-metropolitan counties with no urban areas of at least 50,000 residents. (Georgetown University map, from 2022-2023 American Community Survey data)

Medicaid decisions matter for small-town America where in 2023, 40.6% of children were enrolled in Medicaid/CHIP compared to 38.2% in metro areas. Lawmakers’ suggested reductions would also hurt rural non-elderly adults covered by Medicaid. Mike Johnson, the House Speaker, “has been hard at work on a major bill that can balance various priorities of Trump and his caucus,” Sanger-Katz explains. “The budget Johnson negotiated calls for around $880 billion in cuts to Medicaid. . . . Trump’s comments may make that carefully negotiated package moot.”

Over the past four years, Trump repeatedly promised to leave Medicare relatively untouched. “But he has always been more open to changes to Medicaid, which has become the biggest health insurance program in the country,” Sanger-Katz reports. Since Trump’s first term, the program has grown to cover 72 million Americans, including 7.2 million low-income seniors.

If Republican lawmakers move to shrink Medicaid spending, the fallout won’t only impact individuals and families. It will complicate state budgets that are dependent on federal Medicaid dollars. Sanger-Katz adds, “Cuts would put fiscal pressure on Republican governors, not just poor patients who need help paying for their health care.”

If Congress leaves Medicare, Medicaid and Social Security spending at their current levels, it’s unclear how Johnson can produce a budget that includes Trump’s “desire for $4.5 trillion in tax cuts,” Sanger-Katz reports. “Hitting the target without Medicaid cuts would mean revising the bill’s language as well as enormous cuts to remaining programs.”