President Trump’s Medicaid reform will slash an estimated $793 billion in wasteful spending over 10 years by implementing accountability measures, including work requirements that could reduce the ranks of able-bodied adults receiving benefits while still protecting truly vulnerable Americans.
Key Takeaways
- Trump’s budget bill introduces work requirements for Medicaid recipients who gained coverage through the Affordable Care Act expansion, targeting fraud while maintaining support for those truly in need.
- The Congressional Budget Office estimates the reforms will reduce federal Medicaid spending by $793 billion over 10 years, representing a 12% reduction in wasteful expenditures.
- While Democrats claim the bill will increase the uninsured population, Republicans emphasize that the changes target only those capable of working who choose not to participate in the workforce.
- The debate over improper payments continues, with conservative estimates suggesting 5.1% of Medicaid payments are improper, while other analyses indicate the rate could be as high as 25%.
- The bill would prohibit Medicaid payments to Planned Parenthood for 10 years and pressure states to drop health coverage for illegal immigrants.
Fighting Fraud While Protecting Vulnerable Americans
President Trump’s budget reconciliation bill aims to restore integrity to Medicaid by implementing common-sense reforms that will ensure resources are directed to those who truly need them. The legislation introduces work requirements for able-bodied adults who received Medicaid coverage through the Affordable Care Act expansion, requiring them to document at least 80 hours per month of work, job training, education, or community service. While critics argue this could reduce coverage, supporters emphasize that these measures specifically target those capable of supporting themselves, not truly vulnerable populations like children, pregnant women, elderly, or disabled Americans.
“There are no Medicaid cuts in the Big Beautiful Bill. We’re not cutting Medicaid,” stated House Speaker Mike Johnson. “The numbers of Americans who are affected are those that are entwined in our work to eliminate fraud, waste and abuse,” said House Speaker Mike Johnson
The Congressional Budget Office projects that the reforms will reduce federal Medicaid spending by $793 billion over the next decade. This represents a 12% reduction in a program plagued by improper payments and administrative inefficiencies. Republicans have long argued that Medicaid expansion under the Obama administration created perverse incentives, allowing millions of able-bodied adults to remain unemployed while receiving taxpayer-funded benefits. The new work requirements address this issue directly by encouraging self-sufficiency while preserving the safety net for those who cannot work.
Addressing the True Scale of Medicaid Waste
The debate over improper Medicaid payments highlights the challenge of accurately measuring waste within the massive federal program. Russell Vought, who served as Director of the Office of Management and Budget under President Trump, claimed that “one out of every $5 or $6 in Medicaid payments is improper,” suggesting an improper payment rate between 16% and 20%. While the Centers for Medicare & Medicaid Services (CMS) officially reported a lower rate of 5.1% for 2024, many experts believe the actual figure is significantly higher due to limitations in how the government tracks and reports these payments.
— Trump War Room (@TrumpWarRoom) June 4, 2025
“This bill will preserve and protect the programs, the social safety net, but it will make it much more common sense,” said Russell Vought, Director of the Office of Management and Budget under President Trump.
The Paragon Health Institute, a conservative think tank, has suggested the improper payment rate could be as high as 25% when accounting for the full scope of payment errors. This would represent hundreds of billions in wasted taxpayer dollars annually. However, it’s important to understand that not all improper payments constitute fraud. According to CMS data, approximately 79% of improper payments result from insufficient documentation rather than intentional deception. Nevertheless, these administrative failures represent a significant drain on program resources that could otherwise be directed toward patient care.
Additional Reforms to Ensure Program Integrity
Beyond work requirements, President Trump’s budget proposal includes several other important provisions to strengthen Medicaid integrity. The bill would prohibit Medicaid payments to Planned Parenthood for 10 years, ensuring taxpayer dollars are not used to fund abortion providers. Additionally, it would pressure states to drop health coverage programs for illegal immigrants by reducing federal Medicaid funding for states that continue these practices. These measures align with the administration’s commitment to putting American citizens first and ensuring that limited healthcare resources are directed toward legal residents.
“Although all fraudulent payments are improper, not all improper payments are fraudulent,” said Jessica Tillipman, assistant dean at George Washington University Law School.
Critics argue that the proposed changes could lead to coverage losses for millions of Americans, with the Congressional Budget Office estimating that 10.9 million more people could be uninsured by 2034. However, these projections fail to account for the economic benefits of moving able-bodied adults from welfare to work. By encouraging Medicaid recipients to join the workforce, the reforms will not only reduce government spending but also expand the tax base, create economic growth, and provide former recipients with the dignity and financial security that comes with employment. For conservatives who believe in the value of work and personal responsibility, these reforms represent a long-overdue correction to a system that has incentivized dependence rather than self-sufficiency.
