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The House GOP budget blueprint is raising concerns for many Americans who rely on Medicaid.
On Tuesday, February 26, the House approved the plan with a narrow vote of 217-215, with all Democrats and one Republican voting against it. However, House Speaker Mike Johnson told reporters that the bill “doesn’t even mention Medicaid.”
“The word ‘Medicaid’ is not even in this bill,” House Majority Leader Steve Scalise added. “This bill doesn’t even mention the word ‘Medicaid’ a single time.”
While the bill technically does not include direct cuts to Medicaid, the substantial budget reductions proposed would inevitably impact the healthcare program. As of the latest data from October 2024, over 72 million people nationwide are covered by Medicaid, according to the Centers for Medicare and Medicaid Services. In addition to Medicaid, the Children’s Health Insurance Program (CHIP) covers over 7 million children.
President Donald Trump had previously promised on Fox News that Medicaid, along with Medicare and Social Security benefits, would remain untouched during his presidency.
“Social Security won’t be touched, other than fraud or something — we’re going to find it’s going to be strengthened — but won’t be touched,” Trump told host Sean Hannity last week. “Medicare, Medicaid, none of that stuff is going to be … it’s not going to be touchable.”
With the potential for significant budget cuts, learn more about this widely relied-upon insurance program and what the bill proposes.
What Is Medicaid?
Medicaid is a government-sponsored health insurance program that provides coverage to low-income individuals and families. It is jointly funded by the federal and state governments, with each state managing its own program within federal guidelines. Medicaid helps cover a wide range of healthcare services, including hospital visits, doctor’s appointments, prescription medications, and long-term care, offering crucial support for those who may not have access to other forms of health insurance.
Is Medicaid Being Cut?
The budget, which calls for a total of $2 trillion in spending cuts, may not explicitly mention Medicaid, but it directs the House Energy and Commerce Committee, which oversees Medicaid, to reduce spending by at least $880 billion over the next 10 years as part of efforts to reduce the national debt.
What Is the No Tax on Overtime Bill?
The bill not only aims to end taxes on overtime pay but also targets taxes on tips, a key aspect supported by workers in the hospitality industry, including bartenders, servers, and valets.
Under the current tax code, tips of $20 or more per month, including cash and card payments, are subject to withholding. Employers are required to withhold income taxes, along with the employee’s share of Medicare and Social Security taxes.
The Fair Labor Standards Act ensures non-exempt employees receive time-and-a-half pay for overtime (over 40 hours per week). Overtime is currently taxed as regular income, which appears as withholding on employees’ paystubs. However, salaried employees are ineligible for overtime pay or tips.
