Before a February cabinet meeting, a reporter asked President Donald Trump if he could guarantee that Medicare, Medicaid, and Social Security would not be cut. Trump responded, "I've said it so many times that you shouldn't even be asking me that question. We're not going to touch it. Now, we are going to look for fraud."
That is undoubtedly good news for the 70 million Americans who depend on Medicaid for their medical care. Medicaid is a joint federal-state program that pays for primary and acute care services for one in five Americans, including 40% of all children and 60% of nursing home residents.
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Budget resolution
In February, Trump once again promised Medicaid is safe from the chopping block when he said, "Social Security won't be touched, other than if there's fraud or something. It's going to be strengthened. Medicare, Medicaid -- none of that stuff is going to be touched. Now, if there are illegal migrants in the system, we're going to get them out."
One week later, the House of Representatives passed a budget resolution calling for $2 trillion in cuts to mandatory spending over the next decade, including a cut of $880 billion from the part of the budget funding Medicaid and Medicare. At the time, President Trump endorsed the House's "big, beautiful bill."
Legislating is hard, no matter who you are. Not only are you expected to govern more than 341 million people (with a new American born every nine seconds), but people also expect you to carry through with your promises. In addition to the opinions of millions of Americans, you must also deal with fellow politicians who may or may not support your mission. And the situation is no easier when you face an uphill battle.
An uphill battle
The problem with reassuring promises is that they can be heartfelt without being entirely realistic. Consider President Trump's comment regarding immigrants receiving benefits. According to the health policy group KFF, eligibility for Medicaid and the Children's Health Insurance Program (CHIP) is limited to U.S. citizens and certain lawfully present immigrants. "Lawfully present immigrants" typically refers to families with mixed immigration status. KFF emphasizes that eligible noncitizen immigrants comprise just 6% of Medicaid and CHIP enrollees.
The one exception is Emergency Medicaid. The Emergency Medical Treatment and Labor Act (EMTALA) is a federal law requiring any hospital participating in Medicare to conduct a medical screening on anyone who comes into an emergency department requesting treatment. According to EMTALA, the hospital must stabilize the patient or provide a transfer to a hospital that can stabilize the patient, regardless of their ability to pay.
The Congressional Budget Office (CBO) found that Emergency Medicaid constituted only 0.45% of total Medicaid spending in 2023. While that equates to $2.7 billion, it's a drop in the bucket compared to the $880 billion in proposed cuts.
Putting more Medicaid recipients to work
Another cost-cutting measure endorsed by the president is to introduce federal work requirements. If this requirement comes into law, Medicaid recipients between the ages of 18 and 65 (or 19 and 55, depending on the proposal) would have to work, enroll in job training, or do community service for a minimum number of hours a month to maintain coverage. Presumably, the savings would be thanks to the 36 million Medicaid recipients the Center on Budget and Policy Priorities estimates will be at risk of losing Medicaid coverage.
However, there's an issue with counting on this proposal to drastically cut the Medicaid budget. KFF reports that the vast majority of Medicaid recipients are already employed. Among adults under 65 who do not receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), 64% already work full or part-time. 12% aren't working due to caregiving responsibilities, 7% due to school attendance, and 10% due to illness or disability. The final 8% of adults report being retired, unable to find work, or not working for another reason.
Love and cherish
President Trump said in January that we'll "love and cherish" the programs millions of Americans count on. When asked specifically about Social Security, Medicare, and Medicaid, he said, "We're not going to do anything with that unless we can find some abuse or waste. The people won't be affected. It will only be more effective and better."
If the president or congressional supporters believe they will root out enough fraud to save the U.S. government $880 billion, they may be disappointed. While it's not a "fraud rate," 5.09% of Medicaid payments were improperly made in 2024. However, the U.S. Department of Health and Human Services (HHS) has broken down how those improper payments came to be, and the reasons often have nothing to do with fraud.
- 74% of payments were deemed improper because of insufficient documentation.
- 16% were made on behalf of patients who were ineligible for services or had no medical need.
- 5% of "improper payments" were made to the correct provider in the right amount, but the payment process did not follow applicable regulations.
- 2% of payments were made to providers not enrolled in the program.
- 3% of incorrect payments were classified as improper for other reasons.
It's worth mentioning that 95% ($579.7 billion) of all 2024 Medicaid payments were made correctly.
As of today, President Trump promises to protect Medicaid. However, this promise may be difficult to keep while still cutting the Medicare and Medicaid portion of the budget by $880 billion.
