One Year On from the One Big Beautiful Bill:

Separating Fact from Trump’s Medicaid Fictions

Fidelity to the truth has not been a hallmark of the second Trump Administration. Still, the Administration’s claim that the One Big Beautiful Bill Act (OBBBA) does not represent a “cut” to the Medicaid program stands out.

This claim is striking since the non-partisan Congressional Budget Office (CBO) projects that that law, which was enacted one year ago, will reduce federal spending on Medicaid and the Children’s Health Insurance Program (CHIP) alone by over $900 billion over 10 years. Altogether, the OBBBA is projected to result in 10 million more uninsured people in 2034, most of which are due to its cuts to Medicaid and CHIP.

These represent the largest cuts in federal support for health insurance coverage in history. According to one early analysis, when combined with some other recent federal policy changes (such as the expiration of the enhanced premium tax credits), the OBBBA is projected to wipe away nearly three-quarters of the health insurance coverage gains made under the 2010 Patient Protection and Affordable Care Act (ACA).

United States Uninsured Rate: Historical and Projected¹

And yet, the Trump Administration, Congressional Republicans, and ideological allies have repeatedly insisted (including in a recent essay published in a prominent medical journal) that the OBBBA does not cut Medicaid. Instead, they have argued, among other things, that the law cracks down on “waste, fraud, and abuse” and “protects Medicaid for the truly vulnerable.”

Let’s evaluate these three claims.

Claim #1: The OBBBA does not cut Medicaid

At the risk of stating the obvious, to describe a law as “cutting” government spending means, colloquially, that it reduces health care spending.

As I outline in a forthcoming article, the OBBBA does just this in three main ways:

1. imposing a variety of new administrative burdens (including, most notably, work requirements in Medicaid) that make it more difficult for people to enroll in Medicaid and the ACA Marketplaces;

2. rendering certain categories of legal immigrants (e.g., refugees, asylees) ineligible for Medicaid, subsidized coverage in the ACA Marketplaces, and Medicare; and

3. imposing new constraints on certain complex mechanisms—provider taxes and state directed payments—that states use to finance their Medicaid programs and pay providers.

Although politicians generally try to avoid being seen as having cut healthcare spending, there is nothing necessarily wrong with such cuts. Limiting health care spending can be appropriate or even required to free up resources for spending on other important social goods, like education, transportation, or housing.

Yet instead of defending the OBBBA on normative grounds, Trump Administration officials have opted to defend it on semantic ones: they argue that because nominal Medicaid spending (not accounting for inflation, mind you) is still expected to rise over time, the OBBBA does not “cut” Medicaid. Instead, they claim the OBBBA simply “restores Medicaid [spending] growth to historical levels supported by Democrats under President Obama.”

Such semantic arguments are not new. They work by changing the baseline of comparison: instead of a cut meaning a reduction in spending relative to what spending would have been otherwise (the conventional understanding), they claim a cut is only a reduction in spending relative to a fixed historical level. It is akin to a defendant’s claiming that his embezzlement of millions of dollars from a pension fund does not constitute a “theft” because that fund is still expected to increase in value in the coming years. By contrast, the CBO’s own estimates compare a forecast in which the OBBBA is in effect to a baseline forecast based on prior law. Such counterfactual comparisons are the standard way of understanding the impact of a law or policy.

That is not to imply that there is no uncertainty in the CBO’s forecasts. Predicting the future is an imperfect art, and it is possible that the CBO will – when all is said and done – turn out to have overestimated the coverage impacts of the OBBBA.

But the reality on the ground is that although many state Medicaid and state-based ACA Marketplace directors and their staff (aided by people working in the non-profit and private sectors) are desperately trying to mitigate coverage losses, they face a variety of daunting constraints in doing so. In addition, perhaps not surprisingly, some states are actively choosing to adopt more restrictive policies than those required by the OBBBA. So it is also possible that the CBO’s predictions will turn out to have been underestimates.

Economists Katherine Baicker and Amitabh Chandra have written that health insurance policymakers face an “uncomfortable trade-off” between making health insurance benefits more generous and covering more people. The two most recent pieces of landmark health care reform legislation approached this tradeoff in different ways:

The 2010 Patient Protection and Affordable Care Act both increased the number of people who have health insurance coverage and improved the generosity of that coverage in certain ways, while also attempting to scale back coverage of some kinds of excessively costly medical care.

By contrast, the OBBBA comes down firmly on the side of covering fewer people (especially low-income people), even while the Trump Administration pursues other policies designed to make health insurance coverage less generous. So rather than making any trade-off, the Administration has opted for reduced generosity and reduced coverage, all without displaying any apparent discomfort. There’s no need to be uncomfortable, it turns out, if you don’t acknowledge the hardships that your policy choices create.

Claim #2: The OBBBA cracks down on fraud, waste, and abuse

There are a couple small kernels of truth to this second argument. The first is that fraud, waste, and abuse undoubtedly exist in government health care programs. The second is that the OBBBA does contain a few very modest provisions aimed at targeting fraud and abuse in government health programs.

Yet the administration and its allies have both overstated the extent of the fraud and abuse in Medicaid and the ACA Marketplaces, as well as the OBBBA’s role in combatting it.

For example, the Administration and its allies have cited as evidence of widespread fraud the fact that many people who enrolled in ACA Marketplace coverage filed no insurance claims while they were enrolled. But of course, that is how health insurance is supposed to work: it provides a measure of financial protection from medical costs by spreading risk across the healthy and the sick. In any given year, for some number of people, this protection mercifully will not prove necessary. Indeed, a comparable proportion of people with group health insurance coverage also had no claims, once you adjust for the fact that individual market enrollees are usually only enrolled for part of the plan year.

Moreover, the bulk of the OBBBA’s health care provisions are not targeted at reducing fraud. Many of these provisions (such as work requirements) simply make it more difficult for people to enroll in—or stay enrolled in—health insurance coverage by adding red tape and administrative hurdles. The primary effect of these policies will be to disenroll people who are in fact eligible for coverage. If this counts as combatting fraud, then, by the same logic, repealing Medicare and Medicaid in their entirety would count as an “anti-fraud” measure too.

“Waste” is a somewhat subjective term, but in public policy contexts, it generally refers to government spending that brings little of value (say, spending $5 million to cover four bronze horse statutes with gold plating). Again, there is, no doubt, waste in the health care system.

Yet the irony is that the Medicaid program, which bears the brunt of the OBBBA’s cuts, has proven especially cost-effective. A voluminous body of empirical research has repeatedly confirmed that having Medicaid coverage improves financial security, increases access to medical care, and leads people to live longer, healthier lives. Unfortunately for the millions of people expected to lose coverage over the coming years as a result of the OBBBA, this means that many of them will likely lead shorter, less healthy lives than they otherwise would have.

Claim #3: OBBBA protects Medicaid for the “truly vulnerable”

This claim rests on dubious normative and empirical foundations. Normatively, it reflects a belief (which dates back to the English Poor Laws) that only certain categories of people (e.g., pregnant women, children, people with disabilities) are “deserving” of social welfare benefits including health insurance, whereas others (so-called “able-bodied adults”) are not. This view is, to say the least, contestable.

It is also not popular: polling suggests that nearly two-thirds of Americans believe that it is the federal government’s responsibility to ensure that everyone (not just the “truly vulnerable”) has health care coverage. Indeed, the proportion of Americans supporting universal coverage has increased in recent years.

Empirically, this claim assumes that, by expanding Medicaid eligibility to include low-income adults making up to 138% of the Federal Poverty Line, the ACA reduced health care access for those people who were already eligible because they fit into one of the aforementioned categories (the “categorically eligible”). However, the evidence does not support this claim. To the contrary, the empirical literature finds that the ACA has improved access to health care, including for those who were previously eligible for coverage.

The argument also assumes that the Medicaid expansion population is in fact “able-bodied.” The reality, perhaps unsurprisingly, is much more complicated. For example, analysis from KFF finds that nearly half of adults enrolled in the Medicaid expansion have at least one chronic condition, and a quarter of expansion adults have a chronic behavioral health condition.

Moreover, even if it were true that the ACA’s Medicaid expansion somehow did reduce access for the categorically eligible, that fact would not justify cutting benefits for the Medicaid expansion population. Rather, if one supports universal health insurance coverage (as most Americans appear to do), the natural way to respond would be to increase the generosity of benefits for the categorically eligible, rather than to cut eligibility for the Medicaid expansion population (i.e., to “level up”, instead of “levelling down”).

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In political scientist Paul Pierson’s seminal 1994 book, Dismantling the Welfare State? Reagan, Thatcher, and the Politics of Retrenchment, he identifies a few tried-and-true strategies that conservative governments use to minimize the resulting political blowback from cutting social programs (“retrenchment”).

The most important of these strategies, which Pierson terms “obfuscation,” involves “efforts to manipulate information concerning policy changes.” In essence, the objective is to muddy the waters and make it more difficult for people to understand retrenchment efforts or their consequences. It remains to be seen how successful the Trump Administration and its allies will be in achieving these ends, but if they fail it will not be for lack of trying.

Gabriel Scheffler is a Professor of Law at the University of Miami School of Law.

1. The historical uninsured data come from Matthew Fiedler, Taking Stock of The Health Coverage Impacts of the House Reconciliation Bill, Health Aff. Forefront (Jun. 10, 2025), https://www.healthaffairs.org/content/forefront/taking-stock-health-coverage-impacts-house-reconciliation-bill. I have updated the projected uninsured rate to reflect the CBO’s August 2025 estimate of the impact of the OBBBA, together with its earlier estimate of the effect of the expiration of the enhanced Premium Tax Credits (PTCs).