Trump’s major budget bill seeks to eliminate nearly $800 billion in fraudulent Medicaid spending over a decade, setting up a fierce battle between those focused on program integrity and opponents crying foul over potential coverage losses.
Key Takeaways
- The Trump budget bill could reduce federal Medicaid spending by $793 billion over 10 years by implementing work requirements and targeting waste, fraud, and abuse.
- Congressional Budget Office estimates suggest 10.9 million more Americans could become uninsured by 2034, with 7.8 million of those due to Medicaid provisions.
- Medicaid improper payment rates are officially reported at 5.1%, but conservative estimates suggest the actual rate could be much higher, potentially up to 25%.
- The bill introduces work requirements for able-bodied adults on Medicaid who gained coverage through Obamacare expansion, focusing on encouraging self-sufficiency.
- Despite Democrat claims of “cuts,” House Speaker Mike Johnson maintains there are no actual Medicaid cuts, only efforts to eliminate fraud and abuse.
Targeting Waste and Fraud in Medicaid
The Trump administration’s budget reconciliation bill takes direct aim at what many conservatives have long identified as a serious problem in the Medicaid system, rampant waste, fraud, and abuse that drains taxpayer dollars without improving care for truly eligible recipients. At the heart of the debate is how much fraud actually exists within the Medicaid system. Russell Vought, former Trump administration budget director, has made strong claims about the extent of improper payments in the program, suggesting that as much as one-fifth of all Medicaid spending could be improper.
“One out of every $5 or $6 in Medicaid payments is improper,” said Russell Vought, former Trump administration budget director.
While the Centers for Medicare & Medicaid Services (CMS) officially reports a much lower improper payment rate of 5.1% for 2024, many conservative policy experts believe this number significantly understates the problem. The Paragon Health Institute, a conservative healthcare policy organization, has suggested the actual rate could be as high as 25% when accounting for eligibility verification issues that CMS methodology doesn’t fully capture. This discrepancy represents potentially hundreds of billions in taxpayer dollars being misspent money that could fund legitimate healthcare needs or be returned to hardworking Americans.
Work Requirements: Promoting Self-Sufficiency
A central component of the Trump budget bill is the introduction of work requirements for able-bodied adults who gained Medicaid coverage through the Affordable Care Act expansion. These requirements represent a fundamental philosophical shift away from dependency-encouraging policies of the previous administration toward promoting self-sufficiency and personal responsibility. Under the proposed changes, beneficiaries would need to document 80 hours per month of work, education, community service, or job training to maintain their coverage, similar requirements to those in other assistance programs.
“This bill will preserve and protect the programs, the social safety net, but it will make it much more common sense,” said Russell Vought, former Trump administration budget director.
— Trump War Room (@TrumpWarRoom) June 4, 2025
The Congressional Budget Office estimates that approximately 5.2 million individuals would lose Medicaid coverage by 2034 due to these work requirements, with 4.8 million becoming uninsured. However, Republicans argue this represents not a “cut” but rather ensuring that benefits go to those who truly qualify and need them. Importantly, the requirements include exemptions for the elderly, disabled, pregnant women, and those with dependents, focusing instead on able-bodied adults who should be encouraged to move toward employment and employer-sponsored coverage.
Cuts vs. Program Integrity
Democrats and liberal media outlets have predictably framed the Trump budget bill as implementing “devastating cuts” to Medicaid, claiming it will harm vulnerable populations. However, House Speaker Mike Johnson has consistently pushed back against this characterization, emphasizing that the bill targets fraud and abuse rather than legitimate beneficiaries. The distinction is crucial, reducing improper payments is not the same as cutting benefits for eligible recipients. Instead, it represents responsible stewardship of taxpayer dollars and ensures the program’s sustainability for those who truly need it.
“There are no Medicaid cuts in the Big Beautiful Bill. We’re not cutting Medicaid,” said House Speaker Mike Johnson.
The bill also addresses other areas of concern for conservatives, including prohibiting Medicaid payments to Planned Parenthood for 10 years and pressuring states to drop health coverage programs for illegal immigrants by reducing federal Medicaid funding. These provisions align with the Trump administration’s broader agenda of protecting life and prioritizing American citizens. By redirecting resources away from controversial programs that fund abortion providers and benefits for illegal immigrants, the bill ensures that limited healthcare dollars go to lawful American citizens most in need.
“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.
Balancing Access and Accountability
The ultimate goal of the Trump budget bill’s Medicaid reforms is to restore the program to its original purpose, providing a safety net for truly vulnerable Americans while encouraging self-sufficiency for those capable of work. By implementing common-sense work requirements and strengthening eligibility verification, the administration aims to reduce dependency and ensure that limited resources go to those most in need. Critics who focus solely on enrollment numbers miss the point, simply having more people enrolled in government programs isn’t success if many of those enrollees don’t qualify or could be self-sufficient.
With Medicaid spending projected to consume an ever-larger portion of federal and state budgets in coming years, these reforms represent a necessary step toward fiscal sustainability. The $793 billion in projected savings over ten years will help reduce the crushing national debt burden while ensuring that Medicaid remains available for future generations of truly needy Americans. By focusing on program integrity rather than simply expanding enrollment regardless of eligibility, the Trump administration is demonstrating responsible governance and respect for taxpayer dollars.
