Inside the DOGE billionaires' plan to kill Medicare

I’ve shared with you the plans of Trump’s unelected multi-billionaires, Elon Musk and Vivek Ramaswamy, to undermine Social Security — the most popular and successful program in the federal government, into which you’ve paid your entire working life.

Today I want to share their plan to gut Medicaid.

Medicaid is less politically popular than Social Security or Medicare, because it mainly supports poor children and families who have little or no political voice.

But Medicaid covers far more Americans.

Medicaid insures nearly half of all children in the United States. It covers 1 in 5 women of childbearing age. It also pays for a large portion of the nation’s nursing home care and mental health treatment. States and the federal government share its costs, which totaled $880 billion last year.

How are the DOGE billionaires planning to gut it?

First, by turning Medicaid into “block grants,” in which states get lump sums regardless of how many people sign up for the program. Republican senator and founding DOGE caucus member John Cornyn has already publicly stated that he favors this approach.

As more poor children and needy families sign up, block grants will force states to increase their own spending on Medicaid or restrict who gets it. Given the strain on state budgets and the negligible political voice of Medicaid recipients, it will almost surely be the latter.

A second method for gutting Medicaid favored by Musk, Ramaswamy, Cornyn, and other DOGE caucus members is to impose work requirements on Medicaid recipients. They claim this would save the federal government at least $100 billion over the next decade.

But the reason for the saving is that work requirements would cause an estimated 600,000 people — most of them unable to work — to lose coverage (according to estimates from the Congressional Budget Office).

The third idea DOGE is considering is to cut back on the expansion of Medicaid that came with the Affordable Care Act. That expansion enabled adults in families earning up to $43,000 a year to get health care coverage. (Under it, the federal government pays 90 percent of the costs.)

Step back for a moment and consider what’s being proposed.

If the Affordable Care Act’s expanded Medicaid is cut back, hundreds of thousands of Americans in families earning up to $43,000 a year will lose their health care.

If Medicaid is turned into block grants or if work is required of people unable to work, many hundreds of thousands more will lose their only access to health care, including large numbers of children.

The presumed goal of the DOGE exercise is to reduce the federal budget deficit.

Yet Trump and his billionaires are planning to extend the 2017 Trump tax cuts, which disproportionately have benefited large corporations and wealthy people like themselves, along with additional tax cuts and loopholes for the wealthy.

The estimated cost of extending the Trump tax cuts is at least $5 trillion — more than twice the amount Musk has stated DOGE will cut in “wasteful” government spending.

The richest man in the world and his billionaire colleagues are seeking to reduce money spent for the health care of the poorest and most vulnerable Americans, at the same time they’re seeking to reduce taxes on themselves and others who are the richest and most privileged.

Anything wrong with this picture?

Many of the Americans who will be shafted by all this voted for Trump in 2024.

They may never discover that Trump is behind this because Trump won’t have his fingerprints on the Medicaid cuts. He’ll hide behind Musk and Ramaswamy’s DOGE and the newly formed DOGE caucus in Congress.

Not even their fingerprints will be obvious because block grants to the states, work requirements, and elimination of the Affordable Care Act’s Medicaid expansion will all do the dirty deed quietly.

Nor will working Americans discover that big corporations and the wealthy are reaping most of the savings from the gutting of Medicaid in the form of lower taxes. Most working Americans haven’t yet discovered how skewed the 2017 Trump tax cut has been to the wealthy and big corporations, so why should they discover it in future years?

One more thing.

Employer-sponsored health insurance — available to most salaried workers in large corporations but rarely to hourly workers or contract workers — remains untaxed.

This is one of the largest tax expenditures in the federal government.

As I said, Medicaid costs about $880 billion a year. The exclusion from taxes of employer-provided health insurance costs the federal government a very large fraction of that — the Joint Committee on Taxation estimated $299 billion in 2022; the Congressional Budget Office projects $641 billion by 2032.

It’s another well-disguised benefit for the privileged that’s underwritten by the non-privileged. Yet I’d be astonished if DOGE touched it.

Why go after the costs of Medicaid and not the costs of employer-provided health insurance? For the same reason Trump’s billionaires will happily cut taxes on themselves even as they gut health care for millions of poor kids and working-class families.

What’s considered “waste and fraud” often depends on whether one is looking downward or upward, and the billionaire DOGEs look only downward. But the biggest waste and fraud is found at the high rungs — in tax loopholes and tax expenditures used by wealthy individuals and big corporations. (Did I hear anyone say “carried interest?”)

When Trump chose Dr. Mehmet Oz, the multimillion-dollar celebrity doctor (who infamously promoted hydroxychloroquine while holding over $615,000 in shares of the drug’s distributor) to lead the Centers for Medicare and Medicaid Services, Trump said Oz will “cut waste and fraud within our country’s most expensive government agency.”

Believe that, and you should believe in hydroxychloroquine.

Robert Reich is a professor of public policy at Berkeley and former secretary of labor. His writings can be found at https://robertreich.substack.com/.