Project 2025’s proposals for Medicaid and Medicare: What we can VERIFY

Over the past month, VERIFY readers have submitted dozens of questions regarding Project 2025, the Heritage Foundation-led plan to radically transform the government during the next conservative administration. 

Several readers specifically asked about how the plan affects Medicare and Medicaid, and if it proposes any cuts to either.

THE SOURCES

QUESTION #1

Does Project 2025 propose cuts to Medicaid?

THE ANSWER

Yes, Project 2025 proposes cuts to Medicaid.

WHAT WE FOUND

While Project 2025 doesn’t propose eliminating Medicaid, it does propose narrowing the program’s eligibility and reducing funding for it.

Medicaid is a program jointly funded by the federal government and states to cover medical costs for people with little income or few resources, such as those with disabilities.

The plan proposes changes both to Medicaid’s eligibility requirements and funding to reduce costs. These changes include policies designed to “disincentivize permanent dependence” on Medicaid, such as adding work requirements for “able-bodied” beneficiaries to receive coverage and setting a lifetime cap on time spent receiving Medicaid benefits.

The Center for American Progress, a progressive-leaning policy institute, estimates there were about 18.5 million Medicaid beneficiaries who qualified based on income alone in 2021. Work requirements and lifetime caps are most likely to target beneficiaries who qualify based solely on income. 

Roger Severino, the author of Project 2025’s HHS chapter, also said that CMS should let states know they can raise premiums and share of costs for Medicaid enrollees with higher incomes.

Severino says the federal government should help states fund Medicaid through grants with caps on federal funding to “incentivize states to save money and improve the quality of health care.”

Currently, the federal government helps states fund Medicaid by paying a fixed percentage of the costs without any caps, according to the Georgetown University Center for Children and Families (CCF). The CCF says grants and funding caps could be used to reduce the funding the federal government gives states for Medicaid.

QUESTION #2

Does Project 2025 propose cuts to Medicare?

THE ANSWER

No, Project 2025 doesn’t propose cuts to Medicare. However, some of its proposals may increase costs for Medicare beneficiaries.

WHAT WE FOUND

Project 2025 doesn’t suggest narrowing eligibility requirements for Medicare or reducing funding to the program. Medicare is federal health insurance for people 65 or older and some younger people with certain conditions.

The plan’s authors do propose making Medicare Advantage the default plan for beneficiaries and ending the Medicare Part D price negotiation program, both proposals that critics say could lead to worse care or increased costs for seniors.

Medicare Advantage, also called Medicare Part C, is not the same as traditional Medicare, also called Medicare Parts A and B. Medicare Advantage are plans offered by private, for-profit health insurers that receive federal funding for offering these plans. Traditional Medicare is public health insurance in which the federal government directly pays for a beneficiary’s covered services. Medicare Part D is Medicare’s prescription drug coverage.

Roger Severino, the author of Project 2025’s section on Medicare, claims that the Medicare Advantage program “has been registering consistently high marks for superior performance in delivering high-quality care.”

Critics of the program, such as the Center for Economic and Policy Research (CEPR), argue that there is not sufficient evidence to support the idea that Medicare Advantage delivers better outcomes for patients than traditional Medicare.

“Medicare Advantage outperformed traditional Medicare on some measures, such as use of preventive services, having a usual source of care, and lower hospital readmission rates,” says a 2022 KFF review of available studies, which CEPR cites. “However, traditional Medicare outperformed Medicare Advantage on other measures, such as receiving care in the highest-rated hospitals for cancer care or in the highest-quality skilled nursing facilities and home health agencies.”

Finally, Project 2025 says Medicare’s drug price negotiation program, which “replaced the existing private-sector negotiations in Part D with government price controls for prescription drugs,” should be repealed. 

The Center for American Progress, which is critical of Project 2025’s plans for Medicare and Medicaid, argues that repealing the program could result in seniors losing an average of $400 in drug savings annually.