Kaiser Health News
9 States Poised To End Coverage for Millions if Trump Cuts Medicaid Funding
SUMMARY: With Republicans taking control of Congress in 2025, Medicaid expansion under the Affordable Care Act (ACA) is at risk, particularly for 3 million people in nine states with trigger laws that automatically end expansions if federal funding is reduced. These states, including Arizona, Arkansas, and Montana, could lose coverage if federal support falls below 90%. The ACA expanded Medicaid to low-income adults, and if funding cuts occur, states would need to make up the difference. This could increase the uninsured population and limit access to care. Conservative groups oppose the ACA, while Democrats argue Medicaid expansion saves lives.
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Kaiser Health News
She Co-Founded the Office That Became DOGE. Now, She Sees ‘Irresponsible Transformation.’
Jennifer Pahlka is perhaps best known as the founder of Code for America, a widely respected nonprofit that helped formalize the principles of civic tech, a movement leveraging design and technology expertise to improve public access to government services and data. Notably, the organization reimagined the online application for California’s food assistance program, which once had one of the country’s lowest participation rates, transforming it from a 45-minute endeavor requiring a computer to a mobile-friendly process that can be completed in under 10 minutes.
Pahlka’s 2023 book, “Recoding America,” outlines her views on why the government so often fails to achieve its policy goals in the digital age. In it, she argues that “archaeological” layers of policies, regulations, and processes center the bureaucracy, not the public.
As a deputy chief technology officer under President Barack Obama, Pahlka helped launch the United States Digital Service, a unit within the White House that paired top technology talent with federal agencies to make government services more efficient and user-friendly. It was the predecessor to Elon Musk’s “Department of Government Efficiency,” or DOGE. On Feb. 25, 21 employees resigned from the renamed service, saying they would not “carry out or legitimize DOGE’s actions.”
Pahlka believes bolstering the government’s tech chops and relying less on contractors could save taxpayer dollars. However, as the administration looks to slash spending, she worries that DOGE’s “very indiscriminate” approach to date could wind up harming people who rely on public benefits such as Medicaid.
KFF Health News spoke to Pahlka, now a senior fellow at the nonpartisan Niskanen Center, about what she sees as “irresponsible transformation” and how best to fast-track government reform. This interview, conducted in mid-February, has been edited for length and clarity.
Q: You’ve made a career of bringing Silicon Valley talent into the public sector to improve the delivery of government services. What have you learned from mixing tech with government?
A: It’s really easy to look from the outside of government and say, “That’s crazy it works that way. I’m going to go in and fix it.” And when you get in, it’s that way for a reason, and you gain so much more empathy and sympathy for people in public service. You realize that people who you thought were obstructionists actually are just trying to do their jobs.
Civil servants deserve respect. We’re just not transforming government fast enough.
Q: What are the key changes you think would speed things up?
A: One, you have to be able to hire the right people and fire the wrong ones.
You also have to be able to reduce procedural bloat. When the unemployment insurance crisis hit, every state’s labor commissioner got called in front of the legislature and yelled at for the backlog. Rob Asaro-Angelo in New Jersey brought boxes and boxes of paper — 7,119 pages of active regs. And when they kept yelling, he kept pointing them to them and saying, “You can’t be scalable with 7,119 pages of regulations.”
The third pillar is investment in digital and data infrastructure.
And the fourth is closing the loop between policy and implementation. In California, you get thousands of bills introduced every year in the legislature. We don’t need that many. We need legislators to follow up on bills that have already been passed, see if they’re working, tweak them if they’re not. They need to go into agencies and say, “If this is hard for you to do, what mandates and constraints can we remove so you can make this a priority?”
Q: Civic technologists pushed through layers of bureaucracy in California to boost participation in the Supplemental Nutrition Assistance Program. How did that process unfold?
A: When we started working on California’s SNAP application, it was 212 questions. It started from, “What are all the policies that we need to comply with?” Instead of, “How would this be easy for someone to use?”
I think it can always be helpful to have fresh eyes on something. If those eyes have experience in consumer technology, they’re going to see through that lens of, “How do we deliver something that is easy for people to use?”
Q: House Republicans are considering deep financial cuts to safety net programs such as SNAP and Medicaid, and restricting eligibility. In recent years, organizations including Code for America have received hundreds of millions in private funding to modernize social safety net programs and make them more accessible. How optimistic do you feel that these efforts will progress over the next four years?
A: Let me say what I hope for: I hope that the states now get that when we don’t transform fast enough in a responsible way, you are inviting irresponsible transformation. I hope this gives governors and mayors all over the country a kick in the butt to say, “Whatever we have done so far, it has been insufficient. We really need to work on the capacity of our state to deliver in a modern era.”
Q: What do you mean by irresponsible transformation?
A: Maybe there is good stuff that DOGE is doing now that I don’t know about or good stuff that they will do in the future. I don’t have a crystal ball. But I do see that there is a huge difference between illegally stopping payments without Congress’ permission and making an IT system work better.
Q: To that point, DOGE’s purview seems to have shifted from modernizing government systems to, ostensibly, rooting out fraud, waste, and abuse. What do you make of that change?
A: I think the thesis that better technology could reduce waste, fraud, and abuse is sound, but you want to see both better use of technology to ensure that taxpayer dollars aren’t wasted, and that people who need their benefits are going to get them. You need a North Star that includes both of those things.
Q: And you’re not seeing that in DOGE?
A: They have not expressed great care for what damage can happen to people who rely on benefits. I’m just seeing large, very indiscriminate cuts.
They have signaled that government needs its own internal tech capacity and that it’s shocking how reliant on contractors our government is. I would agree with that.
We have a very dysfunctional government technology contracting ecosystem. There’s this set of big firms that we’ve outsourced our technology to that get to charge taxpayers a shocking amount of money to implement changes.
Q: Thousands of federal workers are now being pushed out. In light of your view that we outsource too much, what are your feelings on that?
A: We’ve overrelied on the idea that we should bring people in from the outside and underinvested in helping career civil servants to do transformation work themselves.
When I wrote my book, the biggest hero was Yadira Sánchez, who I think now has been at the Centers for Medicare & Medicaid Services for 25 years. She’s a leader who really pushes for the kinds of decisions that are going to make a service for doctors that’s going to be usable. She gets pushback and comes back and says, “If you make that decision, we are going to alienate doctors. They’re going to stop taking Medicare patients. And we’ve got to do it this different way.”
We need more of her, and we need to empower lots of people like that.
This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.
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Kaiser Health News
Medicaid Advocates Say Critics Use Loaded Terms To Gain Edge in Congressional Debate
In Washington’s debate over enacting steep funding cuts to Medicaid, words are a central battleground.
Many Republican lawmakers and conservative policy officials who want to scale back the joint state-federal health program are using charged language to describe it. Language experts and advocates for Medicaid enrollees say their word choice is misleading and aims to sway public opinion against the popular, 60-year-old government program in a bid to persuade Congress to cut funding.
Republicans such as Sen. Bill Cassidy of Louisiana, chair of the Senate Health, Education, Labor and Pensions Committee, are deploying provocative terms such as “money laundering,” rebranding a decades-old — and legal — practice known as provider taxes, which most states use to gain additional federal Medicaid funds.
They say it’s “discrimination” that the federal government matches state funding at a higher rate for adults covered by the Affordable Care Act’s Medicaid expansion than it does for other enrollees, including children, pregnant women, and disabled people.
And many Republicans, including House Speaker Mike Johnson and the director of the Office of Management and Budget, Russell Vought, have described adults who gained Medicaid coverage through the ACA expansion as “able-bodied” as they push for federal work requirements.
The term implies they have less need for government assistance than other Medicaid recipients — even though some have health conditions or caregiving responsibilities that make holding full-time jobs difficult.
“Able-bodied adults without dependents are better off with jobs than with hand-outs, and so are their communities and American taxpayers,” Sen. John Kennedy (R-La.) said in a press release in February.
To be sure, political spin is a practice older than Washington, and Democrats are no spectators in the war of words. But what’s striking about the latest GOP effort is that it is focused on cutting a health program for the nation’s poorest residents to pay, in part, for tax cuts for wealthier Americans.
A KFF poll conducted last month and released Friday found that support for proposed changes to Medicaid can wax or wane depending on what individuals are told about the program.
For example, the poll found about 6 in 10 adults support work requirements, with the same portion of respondents believing incorrectly that most working-age adults on Medicaid are unemployed. In fact, about two-thirds work.
KFF’s poll also showed that support for work requirements drops to about 3 in 10 adults when those who initially supported them hear that most Medicaid enrollees are already working and that, if the requirements were implemented, many would risk losing coverage because of the burden of proving eligibility.
When respondents initially opposed to work requirements were told they could allow Medicaid to be reserved for groups like the elderly, people with disabilities, and low-income children, support for them increased to 77%.
Steven Mintz, a history professor at the University of Texas, said the Medicaid debate likely will be won not on the facts, but instead on which party can describe it in terms that gain the most public support. “Words are wielded as weapons,” he said.
Republicans’ word choices are designed to appeal to people’s prejudices about Medicaid, he said, adding that “loaded” terms help divert attention from a detailed policy discussion.
“Words help reinforce a position that people already lean toward,” he said.
Sara Rosenbaum, professor emerita of health law and policy at George Washington University, said conservatives who have long tried to shrink Medicaid have an obvious motivation.
“These people spend their lives trying to ruin the program by searching for the newest slogans, the newest quips, and the newest nonsensical monikers that they think somehow will persuade Congress to completely upend the program and take benefits away from tens of millions of people,” she said.
Medicaid and the closely related Children’s Health Insurance Program cover nearly 80 million low-income and disabled people — roughly 1 in 5 Americans. Enrollment and spending soared in the past decade due largely to the covid pandemic and the decision by more states to expand Medicaid under the ACA. Polling shows the program is nearly as popular as Medicare, the health program primarily for those 65 or older — with about 3 in 4 Americans holding a favorable opinion of Medicaid.
The House of Representatives’ budget resolution, a blueprint that narrowly passed Feb. 25 with no Democratic support, calls for cuts of at least $880 billion over a decade largely from federal health and energy programs. A separate Senate resolution with no such cuts — so far — is also in play. Any proposal would need to pass both chambers.
Democrats fear most of those cuts will come from Medicaid. Trump has vowed not to touch Medicare, leaving few if any alternatives. He has said he would “cherish” Medicaid and go after only waste, fraud, and abuse in the program without offering details on how those would be interpreted — and he endorsed the House’s blueprint calling for cuts.
States and the federal government share in the financing of Medicaid, with the federal government paying from 50% to 77% of the cost of providing services to most beneficiaries. The rate is 90% for beneficiaries receiving coverage through their state’s Medicaid expansion program.
The federal matching rate varies based on a state’s per capita income relative to the national average; states with lower per capita incomes have higher matching rates. The remaining share of program funding comes from state and local sources.
The words “discrimination” and “money laundering” have been used in reports from the Paragon Health Institute, a conservative think tank led by a former Trump adviser, Brian Blase. Two former Paragon executives now advise Trump, and a former Paragon analyst advises Johnson.
Blase said there’s no ulterior motive in the group’s word choices. “This is us trying to describe the issue in a way that makes the most sense to members of Congress and policymakers,” he said.
Paragon analysts have argued for ending the federal government’s “discrimination” in matching state dollars for those covered under the ACA’s Medicaid expansion at a higher rate than for other enrollees. They also propose giving states a set amount of federal money per year for the program, rather than the open-ended federal funds that always have been a hallmark of Medicaid.
One way states raise funds for their share of Medicaid spending is through provider taxes that hospitals or nursing homes pay. States often reimburse the providers through the extra federal money.
Blase acknowledges that provider taxes used by states to draw down more federal money — which Paragon has referred to as “money laundering” — are legal. He said calling the practice a “tax” is misleading because the providers financially benefit from it.
“Money laundering is the best term we can think of for the schemes providers and states come up with to get federal reimbursement for artificial expenditures that benefits states and providers,” he said.
Joan Alker, executive director of the Center for Children and Families at Georgetown University, defended provider taxes as a legal way states raise money to cover low-income people. She noted most states with provider taxes are controlled at least partly by Republicans.
Alker rejected the notion that enhanced funding to expand enrollment is “discrimination.” The ACA included the higher rates for covering more low-income enrollees because that was the only way states could afford it, she said.
Without providing a specific example, Blase said advocates have said cuts would “leave people dying in the streets.”
During a brief funding freeze to Medicaid providers in January, Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, said, “This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed.”
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Kaiser Health News
Years Later, Centene Settlements With States Still Unfinished
More than three years ago, health insurance giant Centene Corp. settled allegations that it overcharged Medicaid programs in Ohio and Mississippi related to prescription drug billing.
Now at least 20 states have settled with Centene over its pharmacy benefit manager operation that coordinated the medications for Medicaid patients. Arizona was among the most recent to join the ranks, settling for an undisclosed payout, Richie Taylor, a spokesperson for the state’s attorney general, told KFF Health News in December.
All told, Centene has agreed to pay more than $1 billion in settlements, according to Cohen Milstein, one of the law firms representing states in the agreements. Meanwhile, St. Louis-based Centene reported $163 billion in revenue in 2024, largely proceeds from government health programs for Medicaid, Medicare, and the Affordable Care Act. The health care company has admitted no wrongdoing in the settlements.
Two state holdouts appear to remain: Georgia has yet to settle with Centene, even though the administration of Gov. Brian Kemp hired law firm Liston & Deas in 2019 to investigate state pharmacy benefit operations.
Florida hired the same law firm in 2021 to pursue overbilling allegations involving Centene, but state officials declined to answer a reporter’s questions about whether Florida has dropped the case, reached an undisclosed settlement, or is still discussing the issue.
Neither state has publicly disclosed what’s standing in the way of potentially tens of millions of dollars in Centene payouts, or whether negotiations are taking place. Because the deals are largely occurring outside the court system, the process between the private law firms hired by states and Centene remains generally out of public view.
Centene spokespeople did not return multiple phone calls and emails asking for updates. In 2022, the company said it was working on settlements with Georgia and eight other states, having reached deals with 13 others. And in a Securities and Exchange Commission filing in October, Centene said it had reached settlements with “the vast majority of states impacted” over the operations of its former pharmacy benefits manager.
Georgia has “taken disproportionately long compared to other states,” said Greg Reybold, a vice president of the American Pharmacy Cooperative, which represents independent pharmacies.
Meanwhile, Centene’s Georgia Medicaid plan, the Peach State Health Plan, lost its bid last year to continue its longtime participation in a Georgia Medicaid program in which companies cover the care for Medicaid recipients for a set fee from the government rather than for each medical service provided. The company, which has been part of the contract since the managed-care program began in 2006, filed a protest over the contract awards, saying that the process was “mismanaged, rife with errors and reckless practices.”
Nationally, pharmacy benefit managers, or PBMs, have come under increased scrutiny over accusations of pocketing discounts on medications or inflating costs in the years since Centene started settling its Medicaid-related allegations. Members of Congress have proposed major policy constraints on PBMs. Centene has since overhauled its PBM operation.
Still, a possible settlement in Georgia could bring in significant money to the state. California had the largest publicly disclosed settlement at $215 million, split with the federal government, but a settlement with Georgia could be in the range of the $88 million that Centene agreed to pay in the Ohio dispute, Reybold said.
The state should aggressively pursue a settlement with Centene, said Roland Behm, co-founder of the Georgia Mental Health Policy Partnership, who is a critic of Centene and its Georgia Medicaid plan. Behm said state Attorney General Chris Carr should take “the same tenacious prosecutorial action” against Centene that Carr’s agency takes against individuals involved in fraud against Medicaid, the federal-state program that provides health insurance coverage for those with low incomes or disabilities.
Carr’s office said in 2022 that it stood ready to represent Georgia in settlement negotiations with Centene. Carr, a Republican who has announced he’s running for governor in 2026, received tens of thousands of dollars in campaign contributions from Centene, its subsidiaries, and its executives, as did Kemp, a fellow Republican, KFF Health News reported in 2022. Contributions to the Kemp and Carr campaigns were part of more than $26.9 million that Centene, its subsidiaries, its top executives, and their spouses donated to state politicians in 33 states, to their political parties, and to nonprofit fundraising groups from 2015 through 2022.
Since 2022, the company and its political action committee have contributed, combined, at least $2 million more to the campaigns of Florida and Georgia candidates of both political parties, along with state party organizations and political committees, according to state campaign finance records.
When asked about a possible settlement, a spokesperson for Carr, Kara Murray, directed a reporter to the Georgia Department of Community Health, which administers Medicaid.
Fiona Roberts, a spokesperson for that agency, then told KFF Health News that the department “is actively pursuing options to ensure regulatory compliance with the state’s contract.” She declined to comment further.
Florida’s attorney general’s office directed a reporter to the state agency that oversees Medicaid, the Florida Agency for Health Care Administration. But that agency did not respond to multiple phone calls and emails requesting comment.
Rebecca Grapevine of Healthbeat contributed to this article.
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