May 14th, 2025
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Republicans in the House of Representatives have shown their main idea for saving money in President Donald Trump's plan. They want to cut about $880 billion, mostly from Medicaid, to help pay for $4.5 trillion in lower taxes.
The law, which is hundreds of pages long and was shown late on Sunday, is causing the biggest political argument about health care since Republicans tried and failed to get rid of and change Obamacare when Trump was first president in 2017.
Republicans say they want to find and stop "waste, fraud, and bad use" to save money by making people work more or meet different rules, but Democrats are worried that many Americans will lose their healthcare. A first report from the non-political Congressional Budget Office suggested these plans could mean 8.6 million fewer people have health insurance in the next ten years.
These savings mean we can use this money to continue the tax cuts Trump made and keep our promise to working middle-class families, said Representative Brett Guthrie from Kentucky, who leads the Republican committee that handles health care costs.
But Democrats said these cuts are wrong and are simply another try to get rid of Obamacare.
Congressman Frank Pallone from New Jersey, a main Democrat, said that millions of Americans would lose their health insurance. He also said that if this new law passes, hospitals would close, older people would not be able to get the medical care they need, and prices would go up for many people.
Republicans are trying to pass Trump's big bill of tax cuts and spending cuts by Speaker Mike Johnson's deadline. This week, they plan to have many public meetings to talk about different parts of the bill before putting them all together into one large package.
The political future is unclear.
A Republican senator, Josh Hawley from Missouri, said that cutting healthcare to pay for tax cuts would be wrong and politically very bad.
In total, 11 committees in the House have been working on their parts of the plan. Republicans want to find at least $1.5 trillion in savings to help pay for keeping the 2017 tax cuts. These tax cuts were approved when Trump was president and will end at the end of the year.
But the important Energy and Commerce Committee has been watched closely. The committee was told to find $880 billion in savings and they did this. They saved money mostly by cutting healthcare costs, but also by stopping green energy programs that Biden started. An early report said the committee's ideas would lower the deficit by $912 billion over ten years. At least $715 billion of this would come from changes to healthcare.
The main savings come from changes to Medicaid, which gives low-cost health care to over 70 million Americans, and the Affordable Care Act, which has grown over 15 years to include millions more people.
To get Medicaid, healthy adults without children would need to work, study, or help the community for at least 80 hours each month. They would also have to prove they still qualify for the program two times a year instead of one time. The plan also makes it harder to show how much money you earn when you sign up for health insurance through the Affordable Care Act.
This could mean more people leave the program and find it hard to keep their benefits, especially if they have to travel far to an office to show proof of their income. But Republicans say this will make sure the program is given to people who are eligible.
Also, some people on Medicaid who earn more than the federal poverty level (about $32,000 a year for a family of four) would have to pay some money for certain services. These payments would not be for emergency room visits, care before a baby is born, children's doctor visits, or regular check-ups with a main doctor. The most you would pay is $35 for each visit.
Also, people could not get Medicaid if they own a house worth over a million dollars.
The suggested law also affects immigrants living in the country without permission. It lowers by 10% the money the government gives to states like New York or California that let these immigrants get healthcare support. To get this healthcare coverage, people would need to show they are living legally in the country.
Other changes would mean all states had to pay more.
Many states have added more people to their healthcare programs because the government gave them money, but the new law would stop a 5% increase that began during the COVID-19 pandemic.
There would be a pause on a tax that some states use to help pay for their healthcare programs for people with low incomes. This tax often means they get more money from the government. Some people say this is a way for states to unfairly increase their budgets.
The energy parts of the new law are much shorter, but they remove some climate change plans that President Joe Biden approved in another law called the Inflation Reduction Act.
It suggests reducing money for some energy projects and making it quicker to get approval for gas and oil pipelines.
May 14th, 2025
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