Trump's affordability czar touts Medicaid cuts to
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- Casey Mulligan, appointed by Robert F. Kennedy Jr. as HHS chief economist and chief regulatory officer in April, told hospital finance leaders at the Healthcare Financial Management Association's National Harbor conference that the One Big Beautiful Bill Act's Medicaid cuts are good policy.
- Mulligan championed the law's cuts to state-directed payments, which the government projects could save $510 billion over 10 years, even though those payments underpin hospital and nursing home revenue.
- State-directed payments work by taxing Medicaid providers, drawing down federal Medicaid matching dollars, and redistributing the money back to providers — often reimbursing them more than they paid in taxes.
- Since 2024, some providers have been reimbursed at much higher commercial rates through this mechanism, rates the One Big Beautiful Bill Act will gradually trim starting in 2028 until they are close to or on par with Medicare rates.
- Hospital finance leaders gave Mulligan the main stage at their industry conference despite the cuts he was praising directly threatening their bottom lines.
Why it matters: Hospital finance leaders invited the official championing cuts to their own revenue stream to headline their conference — a striking show of deference to an administration whose Medicaid policy is projected to redirect $510 billion over a decade. Providers that since 2024 have budgeted around commercial-rate reimbursements from state-directed payments now face a multi-year glide path beginning in 2028 back toward Medicare-level rates.
