etween now and the November midterm elections, Democrats and their allies will spend countless hours and energy claiming Republicans “cut” Medicaid in last year’s reconciliation legislation. Don’t you believe it.
A recent Congressional Budget Office (CBO) report demonstrates how Republicans’ reforms in that law merely attempted to slow an unsustainable Medicaid program following a Biden-era spending explosion. But for good or for ill, the program’s spending continues to grow inexorably higher, notwithstanding those reforms.
Scaling Back Biden’s Spending Binge
Last January, I wrote about that Biden-era Medicaid explosion. From June 2024 to January 2025, CBO increased its estimates of Medicaid spending by $817 billion, or 12 percent, and cited five factors driving such rapid spending growth. Democrat policy priorities, most of them imposed by the Biden administration unilaterally, were at the root of those factors: administrative actions to expand eligibility and prevent states from cracking down on fraud, a mandate on states to cover anti-obesity medications, greater incentives for states to expand Medicaid to able-bodied adults, and policy changes allowing states to bilk the federal government out of additional Medicaid matching funds.
The budget reconciliation bill Republicans passed last year undid many of those changes. It repealed the additional incentives Congress passed in 2021 for states to embrace Obamacare’s Medicaid expansion, blocked several costly Biden-era mandates, cracked down on state abuses of the Medicaid financing system, and instituted work requirements for able-bodied adults. But it made no explicit changes to the benefits provided to the vulnerable populations — seniors, individuals with disabilities, and children — for which Medicaid was originally designed.
The Other Half of the Story
Last week, CBO released its annual report on the budget and economic outlook, its first fiscal update since the reconciliation measure last July. It estimated that last year’s bill would reduce Medicaid spending by $1.184 trillion, a fact Democrats will dutifully repeat ad infinitum between now and Nov. 3.
But the welfare-industrial complex won’t bother to mention several other important Medicaid facts to voters. First, even after taking into account the changes in the reconciliation bill, CBO now estimates Medicaid will spend more under Donald Trump than it estimated during the last year of Joe Biden’s presidency. You read that right: From 2026 through 2034, CBO now estimates that Medicaid will spend $7.124 trillion, versus an estimate of $6.862 trillion in June 2024.
In part, that dynamic occurs because, notwithstanding the changes Republicans enacted into law last year, Medicaid spending continues to climb ever higher. Even as it reduced Medicaid spending by nearly $1.2 trillion to reflect legislative changes from the reconciliation bill, CBO cited “technical changes” to increase spending by $700 billion over the coming decade. While noting lower-than-expected enrollment growth in 2025, “[c]osts per enrollee grew by 16 percent in 2025 — significantly more than CBO had anticipated,” and a trend the budget gnomes expect to continue.
Contra claims about Medicaid “cuts,” program spending will continue to grow every single year over the coming decade. From 2026 through 2036, CBO believes Medicaid spending will grow by a total of 39 percent, due to both growth from inflation and 18 percent growth in real (i.e., inflation-adjusted) spending per beneficiary.
Democrats will cite the estimated 14 percent reduction in Medicaid beneficiaries as evidence of the likely harm caused by the budget reconciliation measure. But even here, CBO notes that the number of individuals “losing” coverage “includes 1.5 million enrollees whose records indicated enrollment in more than one state and who would retain Medicaid eligibility in their current state of residence.” This “cut” reflects not individuals being harmed but “enrollees” who never should have had duplicate coverage to begin with.
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