Joseph Zubretsky, CEO of Molina Healthcare, told investors he expects any cuts to Medicaid in 2025 to be “marginal.”
Republican lawmakers have floated Medicaid cuts that would reduce spending by up to $2.3 trillion, according to a document published by Politico in January. The proposal would impose a per-capita limit on federal Medicaid funding and lower federal matching funds for states that have expanded Medicaid.
Mr. Zubretsky does not expect these proposals to be politically palatable.
“Neither side of the aisle wants to see an increase in the number of uninsured, a reduction in benefits for those relying on government assistance or the related impact to providers,” Mr. Zubretsky said on a Feb. 6 investor call transcribed by Seeking Alpha.
Congress is expected to pass two budget reconciliation bills in 2025, Mr. Zubretsky said, and it remains to be seen if Medicaid funding changes will be a part of the spending packages.
In February, lawmakers proposed a bill to require Medicaid recipients work or volunteer at least 20 hours a week to receive benefits. In 2023, the Congressional Budget Office estimated federal Medicaid work requirements would save $109 billion over 10 years, and leave around 600,000 people uninsured.
Centene, the nation’s largest Medicaid managed care insurer, also is not expecting major cuts to the program.
At the company’s investor day in December 2024, Jon Dinesman, vice president of external affairs, told investors that cuts to Medicaid have been “historically [a] hard sell politically.”
“When it comes to healthcare, the Republican MAGA coalition is more dependent on government subsidies for affordability than ever before. So much so, that in the past few years, we have seen a shift in the popularity of Medicaid,” Mr. Dinesman said.
While some payer CEOs have shrugged off the proposed cuts as unlikely, some hospital leaders are concerned about the effect of Medicaid cuts on their margins.
Peter Banko, CEO of Springfield, Mass.-based Baystate Health, told Becker’s that Medicaid cuts would be “devastating” to Massachusetts providers, especially Baystate as an academic safety net system.
Brendan Harris, president of Pittsburgh-based UPMC’s Medicaid program, told Becker’s the health system is watching all developments closely.
“We’ve been working closely with regulators in Pennsylvania to ensure we’re all aligned as we approach any changes. With leadership changes at CMS and an unclear sense of what’s ahead, we’re left in a state of anticipation, preparing the best we can.”
