Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.

As Republicans debate how to rein in federal spending following President Donald Trump's latest round of tax cuts, a proposed shift in Medicaid funding is drawing resistance: not from Democrats, but from within the GOP. Moderate and battleground-district Republicans, including Representatives Mike Lawler of New York and Don Bacon of Nebraska, are publicly warning party leaders not to go too far in overhauling the safety net. Why It Matters Nearly 80 million Americans are currently enrolled in Medicaid, the federal-state health insurance program for low-income individuals and people with disabilities.

States that expanded Medicaid under the Affordable Care Act could face steep federal funding reductions under a capped system. Analysts at the KFF estimate that such caps would cause 15 million enrollees to lose Medicaid coverage over the next decade. The proposed cap doesn't directly reduce individual benefits, but it limits how much the federal government pays per enrollee, regardless of how much care is actually needed.

That could lead to states scaling back services or narrowing eligibility as they try to manage budget shortfalls. U.S. President Donald Trump reacts to a question during a Cabinet meeting at the White House on April 30, 2025 in Washington, DC. U.S. President Donald Trump reacts to a question during a Cabinet meeting at the White House on April 30, 2025 in Washington, DC.

Andrew Harnik/Getty Images What To Know The proposal at the center of the debate is known as a "per capita cap," a policy that would limit federal Medicaid payments to a set amount per enrollee. Though supporters argue it wouldn't technically cut benefits, critics say it would gradually shift costs to states and potentially reduce access to care. GOP leaders say no final decision has been made, and the party remains divided.

Lawmakers in politically vulnerable seats are warning that any proposal perceived as a cut to Medicaid could be harmful in 2024 swing districts. Centrist Republicans are seeking alternative savings proposals to avoid politically risky Medicaid changes. Representatives Lawler and Bacon are part of a loose coalition pushing leadership to focus on other cost-cutting measures, such as fraud reduction and administrative streamlining, that wouldn't reduce access to care.

In addition to Lawler and Bacon, other Republicans have signaled caution. Representative Jeff Van Drew of New Jersey said he would support "guardrails" on Medicaid growth but opposes cutting the 50 percent federal match for traditional Medicaid. Members of the Congressional Hispanic Conference, including Representatives Juan Ciscomani of Arizona and Gabe Evans of Colorado, are also showing resistance, pushing leadership to focus on anti-fraud measures rather than broader cuts that could affect constituents' health access.

What People Are Saying Representative Don Bacon told Omaha's KETV: "We're trying to do this very carefully. But I wanted to tell our leadership that if you are going to cut above this, you're going to have to persuade about 20 of us, or maybe more, that it's not going to affect the quality of healthcare for individuals who need it, or hospitals." Louise Norris, health policy analyst for healthinsurance.org, told Newsweek: "Especially in lower-income districts that rely heavily on Medicaid, it's not surprising that lawmakers on both sides of the aisle are expressing concerns about federal proposals that would shift Medicaid costs onto states and potentially result in reduced benefits or stricter eligibility rules."

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "Proposals for changes to Medicaid vary, but one gaining traction has been for caps to put on the amount the federal government will supply the states for beneficiaries. The current Medicaid program is a partnership between federal and state governments, and while this proposal would keep that partnership, it would install firm limits on how much the federal government would pay for that program. The result is states would have to pick up the tab for increased costs and assume more liability."

Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "There's a small but growing trend of Republicans speaking out against cuts to the Medicaid expansion budget. Some have gone on record saying they won't support any direct reductions in benefits. They're fine with tightening eligibility or adding work requirements, but once you introduce caps, you're talking about cutting benefits, and that's where the resistance starts."

What Happens Next House Speaker Mike Johnson has not publicly committed to including the caps in a budget deal, and negotiations are expected to continue through the summer. "Some Republicans are growing concerned – and rightfully so," Beene said. "If their state is dependent on that funding, any cap put on federal Medicaid spending could create a domino effect that would hurt beneficiaries in their state."

Thompson said the states that rely most heavily on Medicaid expansion are Republican strongholds. "This budget would pull funding from the very people who voted them into office. That's a political problem, and they know it," Thompson said.

"The bigger issue is the shift of financial responsibility. These cuts don't just disappear, they land squarely on state budgets. And when the federal support shrinks, states will be forced to either raise revenue or cut back.

That means scaling down the very programs people rely on."