GOP lawmakers revisit Medicaid reform in new budget bill talks

FIRST ON FOX: The House Budget Committee has begun having early discussions on a second Republican megabill, eyeing more potential reforms to Medicaid, sources told Fox News Digital.

Republicans on the panel are expected to hold closed-door talks in the coming days, as lawmakers return from the August recess, three people familiar with the matter said. 

Two sources familiar with discussions said the committee has begun early talk on mapping out further reforms to Medicaid, including revisiting and modifying measures that did not make the Senate’s final version of the bill. 

“I think you can kind of put this puzzle together, but I think we were talking about things that last time didn’t go through,” one person said.

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Rep. Ralph Norman, R-S.C., said committee Republicans would meet this week to discuss “Medicaid reform.”

“Same thing we debated before, same thing that we were fighting for,” Norman told Fox News Digital. “I don’t know that the appetite is there right now, but we’ll see.”

Rep. Jodey Arrington, R-Texas, chair of the House Budget Committee, confirmed to Fox News Digital that his panel had begun laying the groundwork for a second reconciliation package.

“Reversing the curse is a continuous effort when you’re $36-plus trillion in the hole,” Arrington said, referencing the national debt. “It’s going to take more than one reconciliation bill to get out of it. So that process is underway.”

He added that details remain fluid, with ongoing talks between his committee and leaders of other House panels on what should be included.

When asked about Medicaid specifically, Arrington said he supported proposals potentially blocking federal dollars from covering transgender medical procedures and from going to illegal immigrants.

“I’d be shocked if those don’t go back in, in some form,” he said. “They also happen to be 80-20 issues, like 80% of the American people would expect that that already happens and are shocked that it’s not happening.”

Arrington suggested that more contentious ideas, such as altering the federal-state cost sharing ratio for Medicaid — known as FMAP — would likely not be central to the new bill. Conservative Republicans had pushed for changes to FMAP during the first reconciliation effort, but the proposal divided the party.

“I guess the two big ones would be the transgender procedures and then prohibiting states from using federal funding, which is fungible, to support their extending Medicaid services to illegals. Those are absolutely two that should be included,” Arrington said. 

“The FMAP is, it’s unfortunately an unfair situation set up by Democrats through the Obamacare expansion, and I think a lot of members feel like it should be addressed. But again, it was debated, and it wasn’t included in the first one, so I don’t know how much time we’ll be spending on it.”

Republicans have long argued that Medicaid is plagued by waste, fraud, and abuse, framing reforms as necessary to protect benefits for the most vulnerable.

Any final decisions on policy related to Medicaid would have to go through the House Energy & Commerce Committee, which has jurisdiction over federal healthcare programs. 

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A spokesperson for that committee told Fox News Digital, “Energy and Commerce Republicans have not proposed policies to be considered for a potential second reconciliation effort.”

The first reconciliation bill — signed into law on July 4 — advanced several of President Donald Trump’s campaign priorities, including tax cuts on tipped and overtime wages, increased immigration enforcement, and rollbacks of green energy initiatives.

Trump branded the package his “one big, beautiful bill,” though he later sought to shift that to reflect its middle- and working-class tax relief. The legislation also imposed 20-hour-per-week requirements for some able-bodied adults on Medicaid and strengthened work requirements for federal food benefits.

The White House has not been making a public push for a second bill, however.

Democrats have seized on the GOP’s Medicaid proposals as a political weapon, accusing Republicans of pushing millions off the program to fund tax breaks for the wealthy. GOP lawmakers have pushed back on that charge and even accused Democrats of lying about the bill.

The path forward remains uncertain, however, with skepticism about whether both chambers have the appetite for another reconciliation bill. 

The first package, though a major GOP victory, took months of negotiation and internal wrangling.

House Minority Leader Hakeem Jeffries, D-N.Y., declined to directly assess the odds of a second reconciliation bill when asked Tuesday.

“If we’re going to go down the road of a second reconciliation bill, we suggest cancel the healthcare cuts and save our hospitals,” Jeffries said. “That should be the focus of a second reconciliation bill. It’s something that Democrats will broadly support.”

Budget reconciliation allows the party in power to pass vast pieces of policy legislation while sidelining opposition, in this case Democrats, by lowering the Senate’s passage threshold from 60 votes to 51. It can only be used three times in a single congressional term.