Virginia lawmakers, health officials brace for Medicaid changes
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Diverging Reports Breakdown
Medicaid concerns threaten GOP budget resolution
Reps. David Valadao and Nicole Malliotakis say they are withholding support from the budget resolution. The resolution outlines a $1.5 trillion floor for cuts across committees with a target of $2 trillion. Republicans have made no secret of their desire to use Medicaid to finance a large portion of the bill, which will be used to extend Trump’s tax cuts and pay for border security measures. Republicans can only afford to lose one vote if all members are present and the entire Democratic caucus opposes the measure.
Valadao represents a Hispanic-majority district in California where 34 percent of adults are on Medicaid. In Malliotakis’s New York district, 23 percent of adults have Medicaid coverage.
“To make up $880 billion, I need more clarity on how they’re going to make up that entire number and how that could potentially affect beneficiaries before I move forward in this process,” Malliotakis said.
Republicans can only afford to lose one vote if all members are present and the entire Democratic caucus opposes the measure, which is expected. At the current moment, key lawmakers say the resolution could be doomed to fail.
The House Budget Committee cleared the resolution on a party-line vote last week. Speaker Mike Johnson (R-La.) and his leadership team — including Budget Committee Chair Jodey Arrington (R-Texas) — are looking to push the resolution through the chamber and kick-start the process to pass President Trump’s domestic policy agenda as early as the week of Feb. 24, when the House returns.
The resolution is a blueprint for spending cuts. It outlines a $1.5 trillion floor for cuts across committees with a target of $2 trillion.
It leaves the particulars on those cuts up to the individual committees, but Republicans have made no secret of their desire to use Medicaid to finance a large portion of the bill, which will be used to extend Trump’s tax cuts and pay for border security measures.
The measure sets an $880 billion floor for the Energy and Commerce Committee, which has jurisdiction over Medicaid.
“There’s only one place you can go, and that’s Medicaid. That’s where the money is,” said Rep. Russ Fulcher (R-Idaho), who sits on the Energy and Commerce Committee. “There’s others, don’t get me wrong, but if you’re gonna get to $900 billion, something has to be reformed on the Medicaid front.”
States brace for impact as Trump’s big bill nears completion in Congress
Tuesday marks the start of a new budget year in 46 states. Most already have adjourned and finalized their spending plans without knowing whether federal funding will be cut. Some states have taken preemptive steps, setting aside money in reserves or tasking committees to monitor the impact of federal funding reductions. Trump’s bill would shift more of those costs to states, leaving them to either divert money from other purposes or trim back their food assistance programs. The bulk of Medicaid money comes from the federal government, meaning any changes in federal policy can create big ripples for states. The Medicaid and SNAP changes are just the latest in a series of Trump policies affecting state finances, including the rollback of grants for transportation and high-speed internet projects, among other things. The National Association of State Budget Officers has not always been touted as a buffer against federal cuts, even though it has not Always been touted for that reason. The Council of State Governments says it is working with the White House to help states prepare for the changes.
Tuesday marks the start of a new budget year in 46 states. Though some legislatures are still working, most already have adjourned and finalized their spending plans without knowing whether federal funding will be cut and, if so, by how much.
“The ebb and flow of rumors and reality have created great uncertainty and some anxiety in state governments,” said David Adkins, executive director of The Council of State Governments.
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Several states have taken preemptive steps, setting aside money in reserves or tasking committees to monitor the impact of federal funding reductions. Others are tentatively planning to return in special sessions this year to account for potential funding cuts to joint federal-state programs such as Medicaid and the Supplemental Nutrition Assistance Program, or SNAP. Others will have to wait until their legislatures are back in session next year.
What’s at stake for states?
“If there are significant cuts, states wouldn’t be able to fully absorb those,” said Brian Sigritz, director of state fiscal studies at the National Association of State Budget Officers.
Nationally, the Medicaid health care program for lower-income residents accounts for 30% of total state expenditures, according to the health policy research organization KFF. That makes it the costliest program in many states, ahead of even K-12 education. The bulk of Medicaid money comes from the federal government, meaning any changes in federal policy can create big ripples for states.
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Legislation pending in Congress would affect Medicaid in several ways. New work requirements are expected to reduce enrollment by millions of people, while other proposed changes also could reduce federal payments to states.
Until now the federal government also has covered the full cost of SNAP benefits and half the administrative costs. Trump’s bill would shift more of those costs to states, leaving them to either divert money from other purposes or trim back their food assistance programs.
The Medicaid and SNAP changes are just the latest in a series of Trump policies affecting state finances, including the rollback of grants for transportation and high-speed internet projects and attempts to withhold federal funds from sanctuary jurisdictions that limit cooperation with federal immigration authorities.
Some legislatures are stocking up on savings
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A surge in federal aid and state tax revenue during the coronavirus pandemic led to booming budgets and historic cash surpluses in many states. As revenues slow and those surpluses get spent, some states now are trying to guard against federal funding reductions.
New Mexico enacted a law this year creating a Medicaid trust fund gradually stocked with up to $2 billion that can be tapped to prop up the program if federal funding cuts would otherwise cause a reduction in coverage or benefits.
Hawaii lawmakers, in crafting the state’s budget, left an extra $200 million in the general fund as a contingency against federal funding uncertainty. They plan to return for a special session.
And Vermont’s budget sets aside up to $110 million in case federal funding is cut. That includes $50 million that can be spent while the Legislature is not in session and up to $60 million that could be appropriated in the future to address federal funding shortfalls.
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Though not necessarily tied to federal cuts, Florida lawmakers approved a proposed constitutional amendment that would set aside $750 million a year — or an amount equal to up to 25% of the state’s general revenue, whichever is less — in a reserve fund that lawmakers could use for emergencies. That measure still must go before voters.
Some governors are cutting back on spending
Because of legislative deadlines, some state lawmakers had to craft budgets well before the details of Trump’s bill took shape.
Virginia lawmakers passed a budget in February for their fiscal year that starts Tuesday. Republican Gov. Glenn Youngkin announced several dozen line-item vetoes in May with the goal of creating a roughly $900 million financial cushion.
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“There are some short-term risks as President Trump resets both fiscal spending in Washington and trade policies that require us to be prudent and not spend all of the projected surplus before we bank it,” Youngkin said in a statement.
Republican Missouri Gov. Mike Kehoe on Monday vetoed or froze about $500 million of general fund budget items, citing a need “to rein in unsustainable spending” and guard against a projected future shortfall.
Other states also have left money unspent, even though it has not always been touted as a buffer against federal cuts.
States are “enacting really cautious budgets, knowing that they may have to kind of revise them in special sessions or address changes in next year’s sessions,” said Erica MacKellar, a fiscal affairs program principal at the National Conference of State Legislatures.
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Some are taking a wait-and-see approach
Before adjourning their sessions, some state legislatures established procedures to monitor federal funding cuts and recommend budgetary changes.
Montana’s budget includes $50,000 for an analysis of the financial implications of federal actions, but that spending kicks in only upon the cancellation of at least $50 million of previously approved federal funding or the anticipated loss of at least $100 million of future revenue.
If federal funding to Maryland decreases by at least $1 billion, a provision approved by lawmakers requires the state budget office to submit a report to the General Assembly with proposed actions and potential spending reductions.
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The spending plan passed by Connecticut lawmakers also requires the state budget office to respond quickly to federal reductions by identifying state funds that could be used to preserve programs, particularly those providing health care, food assistance, education and other priorities.
North Dakota lawmakers left room for more work. They adjourned their biennial session six days shy of their 80-day limit, allowing time to reconvene if needed.
States brace for impact as Trump’s big bill nears completion in Congress
Tuesday marks the start of a new budget year in 46 states. Most already have adjourned and finalized their spending plans without knowing whether federal funding will be cut and, if so, by how much. Several states have taken preemptive steps, setting aside money in reserves or tasking committees to monitor the impact of federal funding reductions. New Mexico enacted a law this year creating a Medicaid trust fund gradually stocked with up to $2 billion that can be tapped to prop up the program if federal funding cuts would otherwise cause a reduction in coverage or benefits. The bulk of Medicaid money comes from the federal government, meaning any changes in federal policy can create big ripples for states. The Medicaid and SNAP changes are just the latest in a series of Trump policies affecting state finances, including the rollback of grants for transportation and high-speed internet projects, for example. The bill would shift more of the costs of SNAP benefits to states, leaving them to either divert money from other purposes or trim back their food assistance programs.
JEFFERSON CITY, Mo. (AP) — President Donald Trump’s big bill to cut taxes and reduce federal spending on some social safety net programs could have large implications for states, but for many it’s too late to do much about it this year.
Tuesday marks the start of a new budget year in 46 states. Though some legislatures are still working, most already have adjourned and finalized their spending plans without knowing whether federal funding will be cut and, if so, by how much.
“The ebb and flow of rumors and reality have created great uncertainty and some anxiety in state governments,” said David Adkins, executive director of The Council of State Governments.
Several states have taken preemptive steps, setting aside money in reserves or tasking committees to monitor the impact of federal funding reductions. Others are tentatively planning to return in special sessions this year to account for potential funding cuts to joint federal-state programs such as Medicaid and the Supplemental Nutrition Assistance Program, or SNAP. Others will have to wait until their legislatures are back in session next year.
What’s at stake for states?
“If there are significant cuts, states wouldn’t be able to fully absorb those,” said Brian Sigritz, director of state fiscal studies at the National Association of State Budget Officers.
Nationally, the Medicaid health care program for lower-income residents accounts for 30% of total state expenditures, according to the health policy research organization KFF. That makes it the costliest program in many states, ahead of even K-12 education. The bulk of Medicaid money comes from the federal government, meaning any changes in federal policy can create big ripples for states.
Legislation pending in Congress would affect Medicaid in several ways. New work requirements are expected to reduce enrollment by millions of people, while other proposed changes also could reduce federal payments to states.
Until now the federal government also has covered the full cost of SNAP benefits and half the administrative costs. Trump’s bill would shift more of those costs to states, leaving them to either divert money from other purposes or trim back their food assistance programs.
The Medicaid and SNAP changes are just the latest in a series of Trump policies affecting state finances, including the rollback of grants for transportation and high-speed internet projects and attempts to withhold federal funds from sanctuary jurisdictions that limit cooperation with federal immigration authorities.
Some legislatures are stocking up on savings
A surge in federal aid and state tax revenue during the coronavirus pandemic led to booming budgets and historic cash surpluses in many states. As revenues slow and those surpluses get spent, some states now are trying to guard against federal funding reductions.
New Mexico enacted a law this year creating a Medicaid trust fund gradually stocked with up to $2 billion that can be tapped to prop up the program if federal funding cuts would otherwise cause a reduction in coverage or benefits.
Hawaii lawmakers, in crafting the state’s budget, left an extra $200 million in the general fund as a contingency against federal funding uncertainty. They plan to return for a special session.
And Vermont’s budget sets aside up to $110 million in case federal funding is cut. That includes $50 million that can be spent while the Legislature is not in session and up to $60 million that could be appropriated in the future to address federal funding shortfalls.
Though not necessarily tied to federal cuts, Florida lawmakers approved a proposed constitutional amendment that would set aside $750 million a year — or an amount equal to up to 25% of the state’s general revenue, whichever is less — in a reserve fund that lawmakers could use for emergencies. That measure still must go before voters.
Some governors are cutting back on spending
Because of legislative deadlines, some state lawmakers had to craft budgets well before the details of Trump’s bill took shape.
Virginia lawmakers passed a budget in February for their fiscal year that starts Tuesday. Republican Gov. Glenn Youngkin announced several dozen line-item vetoes in May with the goal of creating a roughly $900 million financial cushion.
“There are some short-term risks as President Trump resets both fiscal spending in Washington and trade policies that require us to be prudent and not spend all of the projected surplus before we bank it,” Youngkin said in a statement.
Republican Missouri Gov. Mike Kehoe on Monday vetoed or froze about $500 million of general fund budget items, citing a need “to rein in unsustainable spending” and guard against a projected future shortfall.
Other states also have left money unspent, even though it has not always been touted as a buffer against federal cuts.
States are “enacting really cautious budgets, knowing that they may have to kind of revise them in special sessions or address changes in next year’s sessions,” said Erica MacKellar, a fiscal affairs program principal at the National Conference of State Legislatures.
Some are taking a wait-and-see approach
Before adjourning their sessions, some state legislatures established procedures to monitor federal funding cuts and recommend budgetary changes.
Montana’s budget includes $50,000 for an analysis of the financial implications of federal actions, but that spending kicks in only upon the cancellation of at least $50 million of previously approved federal funding or the anticipated loss of at least $100 million of future revenue.
If federal funding to Maryland decreases by at least $1 billion, a provision approved by lawmakers requires the state budget office to submit a report to the General Assembly with proposed actions and potential spending reductions.
The spending plan passed by Connecticut lawmakers also requires the state budget office to respond quickly to federal reductions by identifying state funds that could be used to preserve programs, particularly those providing health care, food assistance, education and other priorities.
North Dakota lawmakers left room for more work. They adjourned their biennial session six days shy of their 80-day limit, allowing time to reconvene if needed.
David A. Lieb, The Associated Press
D.C. may have dodged deepest Medicaid cut. Officials are still worried.
The House Energy and Commerce Committee advanced legislation that includes work requirements and eligibility limits. Lawmakers previously floated a proposal that would have cut $1 billion in federal funding to the District and shrunk the public insurance program by $2 billion. But the D.C.-specific cut was missing when the bill’s language came out Sunday night. District officials breathed a cautious sigh of relief that the current federal match survived the first step in the legislative process. It is still possible, however, that a lawmaker could try to insert the provision before it reaches President Donald Trump”s desk, a process that leadership aims to wrap up by early July. The District is in a unique position compared with states. While federal Medicaid payments to states are based on a formula that considers average per capita income and changes over time, the D.-C. rate was fixed in 1997 amid financial turmoil. The deal said the federal government would pay 70 percent of Medicaid costs and the District 30 percent. The arrangement recognized that the District’s tax revenue is limited by the amount of tax-exempt federal property within its borders.
Lawmakers previously floated a proposal that would have cut $1 billion in federal funding to the District and shrunk the public insurance program by $2 billion, a prospect the city’s top health policy official dubbed “Armageddon.”
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But the D.C.-specific cut — in which the federal government would no longer pay 70 percent of the District’s Medicaid costs — was missing when the bill’s language came out Sunday night. District officials breathed a cautious sigh of relief that the current federal match survived the first step in the legislative process. It is still possible, however, that a lawmaker could try to insert the provision before it reaches President Donald Trump’s desk, a process that leadership aims to wrap up by early July.
Asked to comment Monday, Mayor Muriel E. Bowser said: “My staff reports to me that our concern about changing the D.C. match is not showing up in the committee print, so that’s good news. But I caution all of us to keep pushing on that issue — stay vigilant. Because it’s not over. We want to continue to make our concerns known to the House and to the Senate.”
Bowser said she raised the issue directly with Trump last week when she visited the White House for the announcement that D.C. will host the 2027 National Football League draft. Bowser also personally spoke to Rep. Brett Guthrie (R-Kentucky), chairman of the committee with jurisdiction over health care, to explain the impact of a reduction in D.C.’s federal matching funds, according to a D.C. official familiar with the lobbying efforts.
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Bowser’s federal affairs staff; groups representing hospitals and providers, including the D.C. Hospital Association and the DC Primary Care Association; and business and civic leaders convened by the Federal City Council have spent weeks talking to key lawmakers and White House staff about the potential impact of the possible cuts. They also held a news conference earlier this month at Children’s National Hospital with health-care leaders and families of children who rely on Medicaid to pay for the treatment of serious health conditions.
“There’s a long way to go until the process is complete, so we’re going to be monitoring and engaging throughout the process as this moves through Congress,” Justin Palmer of the hospital association said Monday.
Members of the House Energy and Commerce Committee, which has jurisdiction over health care, aimed to cut spending by as much as $880 billion over 10 years to help offset the cost of extending Trump’s tax cuts.
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But D.C. officials say the District is in a unique position compared with states.
While federal Medicaid payments to states are based on a formula that considers average per capita income and changes over time, the D.C. rate was fixed in 1997 amid financial turmoil. Then-House Speaker Newt Gingrich (R-Georgia) and Rep. Thomas M. Davis III (R-Virginia) struck a deal that said the federal government would pay 70 percent of Medicaid costs and the District 30 percent.
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The arrangement recognized that the District’s tax revenue is limited by the amount of tax-exempt federal property within its borders and the inability to levy a commuter tax on people who work in the District but live elsewhere.
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Today, Medicaid pays for health care for more than 285,000 District residents, including 95,000 infants and children, 28,000 seniors, and 27,000 people with disabilities. Two-thirds of the program funds children’s health care, mental health and substance use disorder services, and long-term care for the elderly, city data shows.
District officials warned that without a robust Medicaid program, the region’s health-care network and public safety infrastructure could erode. Hospitals would have to care for more uninsured people, a revenue hit that could force some to close, costing jobs and critical services such as maternal care and trauma care.
D.C. Council member Christina Henderson (I-At Large), chair of the council’s health committee, said she was pleased the bill does not specifically penalize D.C. But she flagged other concerns.
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“If I’m looking at the bill language as a whole on the health-care front, there’s still some concerning pieces in here that are going to result likely in some D.C. residents losing their health insurance,” she said.
The bill would require jurisdictions to recertify beneficiaries’ eligibility every six months, causing some D.C. residents to lose their coverage or have gaps in coverage, and would impose work requirements with few details on how tracking and enforcement would work, she said.
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Another proposal would reduce federal contributions to the handful of jurisdictions that use local dollars to insure undocumented immigrants, which D.C. does through the DC Healthcare Alliance Program.
Nationally, 8.7 million people could lose their health coverage over 10 years, according to estimates from the Congressional Budget Office.
Henderson, a former Capitol Hill staffer, put it this way: “This is definitely a mixed-bag situation. But I’ve also learned when it comes to Congress, no bill is done until it’s done.”
Construction and agriculture industries ‘brace’ for potential changes to U.S. immigration and tariff policies
Several U.S. sectors are preparing for imminent changes the transition to a Republican president and Congress promise to bring. President-elect Donald Trump’s planned immigration crackdown and tariffs on Mexican and Canadian goods will hit the housing market with a “one-two punch” Health officials anticipate the Affordable Care Act’s Medicaid expansion will be “back on the chopping block,” reports Phil Galewitz of KFF Health News. If the Trump administration makes good on its promise to levy tariffs on Mexico, Canada and China, a trade war is likely; however, the administration may no longer have free rein to tap into the Agriculture Department’s discretionary spending to buffer farm losses, reports Skye Witley of Bloomberg News.
President-elect Donald Trump’s planned immigration crackdown and tariffs on Mexican and Canadian goods will hit the housing market with a “one-two punch,” report Elizabeth Findell and Gina Heeb of The Wall Street Journal. “In Texas, California, New Jersey and the District of Columbia, immigrants make up more than half of construction trade workers. . . Undocumented workers make up an estimated 13% of the construction industry.” Beyond the possible loss of skilled trade workers, “the president-elect’s proposed tariffs of 25% on Canada and Mexico could increase the cost of construction materials.”
Once Trump and a solidly Republican Congress are back at work, health officials anticipate the Affordable Care Act’s Medicaid expansion will be “back on the chopping block,” reports Phil Galewitz of KFF Health News. “More than 3 million adults in nine states would be at immediate risk of losing their health coverage should the GOP reduce the extra federal Medicaid funding that’s enabled states to widen eligibility.” Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah and Virginia all have trigger laws that would swiftly end their Medicaid expansions if federal funding changes.
Farmers and meat plants are “bracing” for immigration changes, including possible mass deportations of some current workers, reports Patick Thomas of The Wall Street Journal. “America’s food-supply chain relies on a predominantly immigrant workforce for some of its most challenging jobs. . . . About two-thirds of U.S. crop-farm workers are foreign-born, and 42% aren’t legally authorized to work in the country, according to a Labor Department report. . . . Having a smaller pool of workers would likely prompt companies to raise wages, but that could result in higher food prices.”
If the Trump administration makes good on its promise to levy tariffs on Mexico, Canada and China, a trade war is likely; however, the administration may no longer have free rein to tap into the Agriculture Department’s discretionary spending to buffer farm losses. “A bipartisan cohort of lawmakers want to rein in a pot of money Trump’s first administration used to compensate farmers decimated by the then-president’s trade confrontation with China,” reports Skye Witley of Bloomberg News. “A farm bill package that would require congressional approval of certain Agriculture Department discretionary spending supporting the farm economy” was championed by Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.) and House Agriculture Chair GT Thompson (R-Pa.)
While many of the incoming administration’s actions were anticipated, Trump surprised some lawmakers and agriculture groups when he nominated Brooke Rollins as his Agriculture secretary. “Trump’s decision to tap her came amid bitter infighting over the role among his advisers, family members and powerful agriculture groups, report Grace Yarrow and Meredith Lee Hill of Politico. “Rollins, who grew up on a farm, has less experience in agriculture policy than those on Trump’s shortlist. Rollins is from Texas and has a degree in agricultural development. While some GOP lawmakers on Capitol Hill were surprised by the pick, she’s expected to have a fairly smooth Senate confirmation.”