House Republicans are touting that their partisan spending bill from last year will dramatically lower costs across the healthcare system, bolstering their case to midterm election voters that the GOP’s agenda is working on affordability. A new analysis from the Department of Health and Human Services found Medicaid financing reforms in the One Big Beautiful Bill Act passed last summer will lower healthcare prices by roughly 3.5% across the industry by 2034.House Energy and Commerce Committee Chairman Brett Guthrie (R-KY) and Subcommittee on Health Chairman Morgan Griffith (R-VA) said in a press release on the analysis that the Republican-led legislation “will protect patients by not only restoring the long-term security of the Medicaid program, but also lowering costs for patients.”
Affordability, particularly healthcare costs, has become a central issue in the 2026 election season, and the new analysis will likely be a boost for Republicans who have come under fire for being out of touch with the high cost of living.Until now, Republicans on the 2026 campaign trail have shied away from delving too deeply into the cost-cutting measures to Medicaid baked into the bill, instead focusing on how the legislation eliminated income tax on tips and Social Security payments and made permanent the 2017-era tax cuts from the first Trump administration.For Republicans who have talked about the healthcare elements of the bill, which Republicans are attempting to rebrand as the Working Families Tax Cuts, they have honed in on how the Medicaid reforms will protect the social safety net program from waste, fraud, and abuse for the 75 million Americans nationwide who depend on the program.But the new findings from the HHS report give Republicans a way to talk about healthcare affordability when touting their most significant piece of legislation since 2024.“By ending the abuses of financial gimmicks, we help save taxpayer dollars and ensure federal funding is being used for the most vulnerable,” Guthrie and Griffith said.The legislation cut $1 trillion in funding for Medicaid health insurance for low-income Americans over the next decade. Democrats have denounced the law, saying it will cause millions of people to lose health coverage and harm hospital systems, but Republicans maintain the savings stem from reforms that strengthen work requirements and cut down on fraud. The new analysis from HHS projects that eliminating so-called provider taxes and state-directed payments will dramatically lower non-Medicaid healthcare costs, saving taxpayer dollars and putting downward pressure on prices throughout the healthcare system. Provider taxes, which many Republicans refer to as “Medicaid money laundering,” were at the top of the list for Guthrie, Griffith, and others in the party when drafting the big, beautiful bill’s Medicaid reforms last year.Before the new law, states used provider taxes to increase their Medicaid budgets, maximizing the federal matching funds they could receive in return. Healthcare providers effectively supported provider taxes because they knew their facilities would eventually reap the benefits of more Medicaid dollars from the federal government. Provider taxes and the federal matching dollars added to state coffers as a result make up the bulk of Medicaid spending, with provider tax-supported spending increasing 270% between 2008 and 2018.Using complex quantitative econometric modeling, HHS researchers project that when provider taxes are fully eliminated come 2028, the policy is expected to save non-Medicaid insurance providers between $502 billion and $875 billion through 2034, and a minimum of $100 billion annually thereafter.“It’s no secret that the abuse of provider tax schemes and state directed payment arrangements had become an open-ended checkbook for states to shift more and more costs to the federal government, driving unsustainable and unaccountable growth in the Medicaid program, Guthrie and Griffith said.DEMOCRATS ATTACK GOP DOCTOR FOR CUTS TO MEDICAID IN TIGHT IOWA HOUSE RACEThe report also explains that for every $1 billion saved in federal Medicaid spending, an additional $29 billion will be saved in federal Medicare for seniors and commercial insurance coverage.“Because of Republicans’ commonsense policies, we are protecting our most vulnerable and lowering health care costs for all Americans,” Guthrie and Griffith said.
