TX Groups Warn Congressional Plan for Medicaid Cuts Will Terminate Health Care for Millions of People
Updated May 15, 2025 to reflect additional information regarding the legislation.
For Immediate Release
May 13, 2025
Contact: Peter Clark, [email protected]
Austin - This week, Congressional leaders unveiled the details of their plan to cut Medicaid as part of the budget reconciliation bill. The plan includes $625 billion in Medicaid cuts over ten years that would lead to 7.6 million more uninsured Americans, according to the nonpartisan Congressional Budget Office. If it passes, it will be the largest Medicaid cut in history, according to the Georgetown University Center for Children and Families. The legislation also includes significant cuts to SNAP nutrition assistance, threatening access to food for many Texans. Congressional leaders are aiming to pass the bill through committee this week and bring it to the full U.S. House of Representatives prior to Memorial Day.
The two types of Medicaid cuts in the bill that will most directly affect the current Texas Medicaid program are new limits on provider taxes and additional red tape when Texas children enroll in Medicaid or CHIP or renew their coverage:
The legislation places new restrictions on the state's ability to collect taxes on hospitals that bring in additional Medicaid funding. Specifically, it prohibits adding or expanding these "provider taxes." Without those new Medicaid dollars, it will be harder for some hospitals to provide key health care services — such as labor and delivery services for pregnant women — as our state population grows.
The bill increases enrollment and renewal red tape in ways that will reduce health coverage for eligible Texans, expand paperwork requirements for families and state workers, and increase administrative costs for the state. For example, the bill halts implementation of a set of rules from 2024 designed to streamline eligibility and enrollment. This means states can add delays and extra hoops for children transitioning between Medicaid and CHIP; reimpose waiting periods for CHIP (requiring a child to be uninsured for three months to qualify for CHIP); and impose lifetime or annual limits on CHIP benefits, among other policies. Additionally, the bill adds red tape by making the “reasonable opportunity period” optional for states. This is a valuable 90-day window for Texans born in other states to submit paperwork verifying citizenship when applying for Medicaid. The legislation also shortens retroactive coverage under Medicaid and CHIP from 3 months to 1 month. This change is particularly harmful for people experiencing new life events, such as pregnancy, or during complex eligibility situations that might take time for an eligibility determination. This protection ensured that someone could get care and didn’t get stuck with large hospital bills during this time. These and other changes will result in kids and other Texans missing out on health coverage when they need it.
Many of the other proposed cuts, including work requirements, are aimed at Medicaid expansion states, meaning they do not directly affect the Texas Medicaid program.
Texas already has one of the most limited Medicaid programs in the nation. In Texas, Medicaid primarily covers children, pregnant women, seniors, and people with disabilities. Children account for three of every four Medicaid enrollees in the state. Every Congressional district in Texas has a significant number of children enrolled in Medicaid.
A number of Texas organizations expressed significant concern about the proposed Medicaid cuts:
“We are deeply concerned about the plan to rush these Medicaid cuts through Congress,” said Adriana Kohler, Policy Director at Texans Care for Children. “These cuts are bad news for Texas kids, pregnant women, seniors, and people with disabilities. Cutting Medicaid will terminate health care for people who can least afford it.”
“We’re concerned about the massive passing of the buck that the federal government is about to hand down to the states,” said Lynn Cowles, Health and Food Justice Director at Every Texan. “Texas lawmakers will have to deal with these funding cuts by slashing state funding for necessary healthcare programs for children, people with disabilities, new moms and moms-to-be, and seniors. Nearly everyone in Texas will lose money because of these planned $715 billion dollars in program cuts—we’re talking hospitals, doctors, employers, schools, grocery stores, and small businesses. Texans who use Medicaid will feel the cuts when they lose access to treatments, medications, or doctors, or when their Medicaid coverage ends entirely. Unless Republicans bravely stand against their party’s sellout of Medicaid enrollees and the communities they live in, Texans will feel the health and financial consequences of these cuts for years to come.”
“Medicaid is a lifeline for Texas children and an investment in the future of our state,” said Valerie Smith, MD, MPH, FAAP, President of the Texas Pediatric Society. “Having high quality, dependable health care allows Texas children to thrive. In Texas, 86 percent of Medicaid recipients are children and pregnant or postpartum mothers. This means that for Texans, any cuts to Medicaid will hurt children and families.”
“These cuts will be devastating to my rural community and others across Texas, not just for the most vulnerable of our patients, friends, and neighbors, but for our entire economy,” said Shivum Agarwal, MD, a board-certified family physician practicing full-scope rural medicine including obstetrics in Mineral Wells, Texas and a member of the Texas Academy of Family Physicians. “Cutting Medicaid means we will have more uninsured patients, more people forgoing necessary care while they get sicker, and more uncompensated care in our clinics and hospitals. When those clinics and hospitals struggle and fail, everyone suffers. If reimbursement falls any more, primary care physicians who are currently closing the gap and charitably taking Medicaid — even though often at a loss — may have difficulty keeping their practices viable, keeping OB services open, and continuing to deliver babies.”
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