3 Things To Watch for as Elon Musk Takes on Medicaid
Written by
Heather Altamirano
Edited by
Amber Barkley
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Elon Musk and his team at the Department of Government Efficiency (DOGE) are tasked with eliminating government fraud and waste and have the freedom to take measures such as mass firings and slashing budgets. Next on Musk’s list could be Medicaid, which has Americans on edge.
In a recent interview with Fox Business Network host Larry Kudlow, who served as Director of the National Economic Council during President Donald Trump’s administration from 2018 to 2021, Musk called for cuts to entitlement spending.
“The waste and fraud in entitlement spending … which is most of the federal spending, is entitlements — so, that’s, like, the big one to eliminate. That’s the, sort of half-trillion, maybe $6-$700 billion a year.”
Next, find out what experts say about whether Musk can change Medicare.
Are Funding Cuts Likely?
Musk isn’t the only threat to Medicaid. House Republicans are in favor of a budget resolution that could put 83 million people who depend on the program at risk, NBC News reported. The plan orders the Energy and Commerce Committee, which oversees Medicaid, to find $880 billion in mandatory spending cuts over the next decade. The savings could help Trump extend his Tax Cuts and Jobs Act, which will expire this year, per the outlet.
Medicaid was not specifically listed for budget cuts, but experts believe the signs do point to a major cut in funding despite Trump’s assurances that won’t happen.
“The way the math would work is that those cuts would largely need to come out of Medicaid,” Robin Rudowitz, director of the program on Medicaid and the uninsured at KFF, told NBC. “Medicare is off the table, and there just aren’t any other sources of funding for the Energy Commerce to look at.”
With that in mind, here are three things to watch for as Musk and DOGE take on Medicaid.
Medicaid Eligibility and Coverage Changes
If the budget is reduced, there could be limited access for people who depend Medicaid.
“Medicaid is an entitlement program jointly funded by states and the federal government,” said Bridget Haeg, healthcare director at LLYC US. “It is typically the largest expenditure in state budgets.”
She explained, “If federal Medicaid funding decreases, states will struggle to balance the scale of coverage. To avoid cutting enrollees, they would have to reduce covered services. To avoid cutting services, they would have to reduce enrollees via stricter eligibility requirements.”
Look Out for Cuts to Other Important Sectors
According to Haeg, a slash to Medicaid’s budget could affect more than just healthcare.
“Medicaid is typically the largest expenditure in state budgets. Without critical federal funding, something will have to give,” she said. “States may look at cuts to sectors such as education or transportation to preserve healthcare funding.”
Reconsideration of Long-Term Plans
Another thing to look out for is family members of people who rely on Medicaid switching up their long-term care plans because coverage has been reduced.
“Medicaid covers around 60% of nursing home residents,” Haeg said. “If states are forced to decrease coverage, older adults will need to identify alternate funding sources, a significant onus given the average cost for a semi-private room runs more than $110,000 per year.”
She added, “This could mean more family caregivers stepping into the picture.”
Republican House Speaker Mike Johnson told CNN’s Kaitlin Collins that Republicans are not going to cut Medicaid benefits.
“We’re going to take care of those who are rightful beneficiaries of the program,” Johnson said. “We’re going to cut the fraud, waste and abuse out of Medicaid, and that’s where we’re going to get the savings to accomplish this mission.”
However, Edwin Park, a research professor at the McCourt School of Public Policy at Georgetown University, told NBC that was misleading.
“The fraud argument is being used as a frame to justify Medicaid cuts, but the major proposals that are under consideration today … are the same major Medicaid cuts that were included in the [2017] Affordable Care Act repeal and replace bills that ultimately failed,” he explained. “Back then, there was no talk about combating fraud or waste or abuse.”
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