Cutting Medicaid?

Republican leaders in Congress have directed the committee that oversees Medicaid to cut $880 billion from the next budget. They say these cuts aren’t necessarily aimed at Medicaid, the insurance program for 72 million poor and disabled Americans. The cuts could come from Medicare, for instance. But Trump has vowed not to touch that very popular program. And a sum this large can’t come from anywhere else.

The Republican process is just getting started, and we don’t yet know how lawmakers will change the program. Most Medicaid money goes to states, so the best way to think about the proposal is as a cut to state budgets. State lawmakers could react by dropping coverage, raising taxes or slashing other parts of their budget. In today’s newsletter, I’ll explain a few possible scenarios.

Who’s covered

Medicaid was designed to divide a patient’s medical bills: the federal government and the state would each pay a set share. (A state’s contribution depends on how poor it is.)

The law is precise about what Medicaid must cover — cancer screenings and kidney transplants, for instance, but not prosthetic legs — and Republicans can’t change that with a budget bill. Every state has to cover certain populations, including poor children, pregnant women, people with disabilities and patients in nursing homes who run out of money.

Most states also choose to cover an optional group that was added as part of Obamacare in 2014: anyone who earns less than a certain income (around $21,000 for a single person). Republicans want to impose a work requirement on this group for people who aren’t disabled. That idea is popular with the public but would save the federal government only around $100 billion, not enough to meet the G.O.P. target.