Republican lawmakers on May 12 unveiled a sweeping proposal to slash $880 billion from Medicaid over the next decade. The plan is part of efforts to secure funding to extend the Donald Trump administration’s large-scale tax cuts.
Medicaid, known as Medi-Cal in California, primarily provides healthcare coverage for low-income individuals, people with disabilities, and seniors. The program currently serves 86 million people nationwide, including an estimated tens of thousands of Korean American beneficiaries. If enacted, the proposed overhaul is expected to have wide-reaching consequences.
The central aim of the proposal is to restructure what Republicans describe as loosely and wastefully managed Medicaid in order to reduce inefficiencies and prevent fraud and abuse.
Work and eligibility requirements to tighten
Under the proposed plan, starting January 2029, Medicaid recipients between ages 19 and 64 who are deemed able-bodied must provide proof of at least 80 hours per month of employment, volunteer service, or community engagement to continue receiving benefits. Those who fail to meet these requirements would be disqualified from the program.
Additionally, all Medicaid recipients would face biannual eligibility reviews. Failure to comply could result in benefits being cut off, reflecting the government’s intent to regularly monitor recipient circumstances.
The plan also tightens income and asset verification. Beneficiaries whose income exceeds 100% of the federal poverty level would face a $35 copay for certain medical services. Those owning homes valued over $1 million would no longer qualify, significantly strengthening current eligibility rules that exclude primary residences and vehicles from asset calculations.
Cuts to support for undocumented immigrants
The proposal includes a provision to reduce federal funding by 10% to states such as California and New York that provide Medicaid benefits to undocumented immigrants.
Republicans argue these measures are necessary to extend existing tax cuts and enable new tax reductions. However, Democrats and healthcare advocacy groups have voiced strong opposition, warning that the cuts would severely harm low-income communities.
Opposition emerges within Republican ranks
Democrats have pledged to block the proposal, saying the sudden and large-scale cuts would disproportionately impact vulnerable populations. Some Republican lawmakers have also raised concerns that curbing Medicaid, a widely used social safety net, could backfire politically.
David G. Valadao, a Republican representative from California, warned, “If this proposal becomes reality, it will be difficult to convince my constituents. Such abrupt changes will also have major consequences for our communities.”
The draft bill is scheduled for review and a vote on May 13 by the House Energy and Commerce Committee, before moving to a full House vote. The Republican majority plans to pass the legislation by May 26.
Trump signs executive order targeting high drug prices
Separately, on May 12, President Trump signed an executive order pressuring pharmaceutical companies to lower drug prices. Companies that fail to meet price targets set by the Department of Health and Human Services (HHS) will face penalties.
According to the Trump administration, U.S. prescription drug prices are currently three times higher than those in other advanced economies. Trump warned that pharmaceutical companies may face tariffs if their U.S. prices do not align with prices in other countries.
“It’s unacceptable that while the U.S. population makes up less than 5% of the world, three-quarters of global pharmaceutical profits come from the U.S.,” Trump said. The list of drugs subject to the price reduction mandate will be announced at a later date.
BY BRIAN CHOI [choi.inseong@koreadaily.com]
