Health and Human Services Confirmation and Medicaid as a Potential Target

Published in Government Relations on February 14, 2025

By Adam Miller

The Senate on Thursday helped President Donald Trump fill out his Cabinet by confirming and swearing in Robert F. Kennedy Jr. to lead the Health and Human Services Department (HHS). HHS oversees 13 separate agencies, and it has been Kennedy’s position that HHS and its agencies are in need of drastic reform. What that reform might look like, the extent of which and how many HHS staff could be eliminated, and, subsequently, how that could potentially affect us in the HME industry in the near future remains unclear.  

What is clear is that House Republicans are proposing a plan that could include significant cuts to Medicaid at the top of their list of budget cuts as a partial solution to pay for a wide-ranging overall agenda that includes border security, tax cuts, and energy production.  

Currently a federal and state funded program, Medicaid provides health coverage for more than 70 million Americans with the federal government contributing anywhere from 50 to 75 percent of the cost and up to 90 percent for states that expanded coverage under the Affordable Care Act.  

On Thursday, the House Budget Committee considered a plan that would instruct the Energy and Commerce Committee (which has jurisdiction over Medicaid) to find up to $900 billion in savings. Potential examples of some of the suggested strategies to achieve that are: 

• Capping Medicaid funds to a per-capita basis. 
• Rolling back the matching rate for those states that have expanded coverage. 
• Lowering the 50 percent floor of traditional Medicaid. 

Republicans are also considering work requirements to qualify for Medicaid coverage. The Congressional Budget Office (CBO) found work requirements would save the federal government just $109 billion over a 10-year period while doing little to increase employment. The CBO found it would also lead to 1.5 million people losing Medicaid. 

A previous controversial attempt to cut Medicaid spending during Trump’s first term failed. It would likely find obstacles again as hospital and health provider groups are expected to lobby hard against any proposed cuts of this magnitude to Medicaid.  

“While some have suggested dramatic reductions in the Medicaid program as part of a reconciliation vehicle, we would urge Congress to reject that approach. Medicaid provides healthcare to many of our most vulnerable populations, including pregnant women, children, the elderly, disabled, and many of our working class,” Rick Pollack, President and CEO of the American Hospital Association, said in a statement. 

With a slim majority, House Republicans would need every vote to pass a budget reconciliation on the floor.  

As the situation develops and more information becomes available, VGM Government Relations will keep you posted.