House Republicans have revealed the cornerstone of President Donald Trump's ambitious legislative agenda, proposing at least $880 billion in cuts, primarily targeting Medicaid, to offset the substantial cost of $4.5 trillion in tax reductions.

The new law, which is hundreds of pages long and was shown late Sunday, is causing the biggest political argument about health care since Republicans tried and failed to get rid of and replace the Affordable Care Act, also called Obamacare, when Trump was first president in 2017.

Republicans say they are just trying to stop "waste, fraud, and abuse" to save money by changing work and eligibility rules. However, Democrats warn that millions of Americans will lose their health insurance. The non-political Congressional Budget Office estimated that these plans would mean 8.6 million fewer people have health care over the next ten years.

These savings mean we can use this bill to extend the Trump tax cuts and keep the Republican promise to hardworking middle-class families, said Representative Brett Guthrie of Kentucky, the Republican chairman of the Energy and Commerce Committee, which deals with health care spending.

However, Democrats criticised the cuts as "deplorable", viewing them as essentially another attempt to dismantle the Affordable Care Act.

Congressman Frank Pallone from New Jersey, the main Democrat on the committee, clearly stated that millions of Americans would lose their health insurance if the new law passes. He argued that if the law is approved, hospitals will close, older people will not get the care they need, and insurance costs will go up for many people.

Republicans are trying to meet the Memorial Day deadline set by House Speaker Mike Johnson to pass Trump's large bill of tax cuts and spending reductions. This week, they plan to hold many public hearings all day and night on different parts of the bill before they are combined into one big package.

The political landscape ahead is uncertain.

Senator Josh Hawley, a Republican from Missouri, told his colleagues in an article on Monday that cutting money for healthcare to pay for lower taxes would be "morally wrong and politically very bad."

In total, eleven committees in the House have been putting together their parts of the plan, as Republicans are trying 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 first in office and will end at the end of the year.

However, the influential Energy and Commerce Committee has garnered significant attention. Tasked with identifying $880 billion in savings, the committee successfully achieved this objective, primarily through substantial healthcare expenditure reductions, but also by curtailing green energy initiatives implemented during the Biden administration. According to the Congressional Budget Office's initial assessment, the committee's proposals are projected to decrease the deficit by $912 billion over the next decade, with a minimum of $715 billion stemming from the healthcare provisions.

The main way they are saving money is by changing Medicaid, which gives very cheap healthcare to over 70 million Americans, and the Affordable Care Act, which has grown over the past 15 years since it was first agreed to, covering millions more people.

To qualify for Medicaid, able-bodied adults without dependents would face new “community engagement prerequisites,” demanding a minimum of 80 hours monthly dedicated to employment, education, or community service. Furthermore, participants would need to substantiate their program eligibility biannually, an increase from the current annual requirement. The proposed legislation also institutes stricter income verification processes for individuals enrolling in the Affordable Care Act's health care plans.

This will probably result in increased turnover within the program and create obstacles for individuals trying to maintain coverage, particularly if they must travel a significant distance to a local benefits office for an in-person income verification. However, Republicans argue that this approach will guarantee the program serves only those who meet the eligibility criteria.

A segment of Medicaid beneficiaries whose income surpasses 100% of the federal poverty threshold, approximately $32,000 annually for a family of four, would face mandatory out-of-pocket expenses for certain healthcare services. These charges, excluding those for emergency room visits, prenatal care, pediatric consultations, or primary care check-ups, would be capped at $35 per appointment.

Furthermore, individuals whose primary residence exceeds a value of one million dollars would be ineligible for Medicaid.

The proposed law also affects immigrants living in the country without papers. It lowers by 10% the amount the federal government gives to states like New York or California that let these immigrants get Medicaid. To get ACA coverage, people would need to show they are legally in the country.

Further actions would distribute expenses across all states.

Numerous states have enlarged their Medicaid rolls aided by federal inducements, yet the proposed law would eliminate a 5% increase that was implemented during the COVID-19 pandemic.

There would be a temporary stop on the provider tax, which some states use to help pay for a large part of their Medicaid programs. Critics say this extra tax often results in more money from the federal government, which they see as a loophole that lets states make their budgets seem bigger than they are.

The parts of the law about energy are much shorter, but they still undo climate change plans that President Joe Biden approved as part of the Inflation Reduction Act.

The proposal involves cancelling funding for various energy loan and investment schemes, coupled with fast-tracked approval for natural gas projects and oil pipeline construction.