Republican Lays Out How Medicare, Medicaid Cuts Could Work – Newsweek

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Suzanne Blake is a Newsweek reporter based in New York. Her focus is reporting on consumer and social trends, spanning from retail to restaurants and beyond. She is a graduate of UNC Chapel Hill and joined Newsweek in 2023. You can get in touch with Suzanne by emailing s.blake@newsweek.com. Languages: English

Suzanne Blake

Reporter, Consumer & Social Trends

A Republican senator explained how upcoming cuts to Medicare and Medicaid could work, and his vision may spell good news for millions of Americans.

Senator Bill Cassidy of Louisiana told CNBC Tuesday that the cuts to Medicaid and Medicare under the proposed Republican budget wouldn’t apply to benefits but would instead target the administration of them. This, Cassidy said, could save money without impacting the benefit payments relied upon by millions.

Why It Matters

The Republican budget proposed for 2025 calls for $2 trillion in mandatory spending reductions. While the budget doesn’t explicitly make cuts to Medicaid or Medicare, recent analysis found the financial target would be difficult to achieve without impacting the two government-run health care programs.

Nationwide, nearly 70 million Americans rely on Medicare and about 80 million receive Medicaid coverage.

What To Know

In the newly proposed budget, House Republicans instruct the Energy and Commerce Committee to decide which programs and areas would be cut, but Medicaid and Medicare are allotted a considerable portion of the committee’s funding.

In all, the committee would have to reduce $880 billion in spending over the next decade.

In his interview with CNBC, Cassidy mentioned a comment from President Donald Trump and said there are ways to reduce spending for Medicare and Medicaid without actually limiting benefits for recipients. “The president has said, for example, that he doesn’t want to touch Medicare and Medicaid … He’s saying don’t cut benefits to beneficiaries,” Cassidy said. “Let’s look at Medicare. Is there some way that we can … reform Medicare so that benefits stay the same? But that is less expensive, more efficient, I would say that there is, and that’s where our opportunity lies.”

Cassidy added that reducing the budget is necessary to curb America’s debt and ensure people can still afford mortgages and car loans.

“If we don’t live within our means, we’re going to destroy the American dream,” Cassidy said. “The American dream will become a nightmare. Expensive rates that are too high and people unable to afford mortgages, car notes, etc.”

What People Are Saying

Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, told Newsweek: “You cannot materially cut spending strictly through administrative tweaks. The cost is embedded within the system itself—healthcare pricing, insurers, regulatory structures, all of it. The idea that you can magically uncover trillions in savings just by switching from paper mail to email? It’s laughable and unserious.”

Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “The comments are in-line with everything else we’ve heard. The claim is there will be enough in Administration and staffing to cut that benefits themselves won’t have to be touched. At the same time, many of the Congressional proposals call for hundreds of billions of dollars in axed costs over the next decade. It’s hard to imagine there’s that much to be saved in from an employment level that benefits won’t have to be included in the drawbacks.”

What Happens Next

Thompson said the Republican lawmakers may be starting these conversations as a way to initiate cuts to benefits without directly calling for them.

“The more I listen, the more it sounds like they’re laying the groundwork to cut benefits—just not directly. We’ve already seen it: ‘able-bodied’ work requirements, block grants at the state level—death by a thousand cuts,” Thompson said.

“You might not see overt benefit reductions, but make no mistake: the effect is the same.”