Cutting Care From Patients Saves Only a Fraction of What Cutting Insurance Abuse Would

Lawmakers say cuts to Medicaid and CHIP will save money — but patients will pay with their lives, while Big Insurance cashes in.

As lawmakers debate cuts to Medicaid and the Children’s Health Insurance Program (CHIP), I can’t help but think back to the time when CHIP saved my life.

I was a teenager with Type 1 diabetes, a diagnosis that made daily survival dependent on insulin, glucose monitoring supplies and an insulin pump—costs that can add up to thousands of dollars a month. My parents worked multiple jobs but did not get health benefits from their employers. CHIP was the only reason I had access to the care I needed. Without it, I’m not sure I’d be here today.

Yet instead of targeting the real drivers of skyrocketing health care costs, some policymakers continue to propose taking away coverage for people on programs like Medicaid and CHIP in an effort to reduce health care costs. For example, proposals to institute work requirements for Medicaid enrollment would greatly reduce enrollment, with many people losing coverage due to administrative hurdles, not because they do not work. Almost all enrollees in Medicaid who do not receive Social Security disability benefits are already working or unable to work due to caregiving or school. 

Another proposal would reduce the federal funding to states that expanded Medicaid under the Affordable Care Act. This would either require states to come up with billions of dollars to address the sudden funding gap or to stop providing Medicaid coverage to people in the expanded program, which currently covers more than 21 million patients.  

These proposals are estimated to result in 28,721 excess deaths per year. To some, that number might seem abstract. But for those of us who have relied on these programs, the consequences are all too real. If CHIP had been cut while I was on it, I would have lost my coverage. My family could not afford to buy me a different plan. That would have meant suddenly paying thousands of dollars a month out-of-pocket for insulin, insulin pump equipment, and blood glucose monitoring supplies. I don’t know if we would have managed to find that money. That’s how cuts to Medicaid and CHIP target vulnerable patients and kill people.

Meanwhile, the actual waste in our health care system remains largely untouched—namely, the unchecked power of Big Insurance. In 2023 alone, just seven private insurance companies reported more than $70 billion in profits. UnitedHealth, the nation’s largest, receives more than 70% of its revenue from taxpayer-funded programs like Medicare and Medicaid. And these corporations are not just profiting—they’re gaming the system.

A wide body of research from across the political spectrum shows that insurers running Medicare Advantage plans are overpaid by more than $100 billion each year. That’s $1 trillion every decade, siphoned from public funds through tactics like artificially inflating patient risk scores. This isn’t inefficiency—it’s exploitation.

Here’s the stark reality: While work requirements and funding cuts might save billions, mainly by taking coverage away from people, ending Medicare Advantage overpayments could save ten times as much—without kicking a single person off their coverage. One approach cuts care. The other cuts fraud. So why are we even debating?

The answer, unfortunately, lies in whose interests we choose to protect. Targeting patients is politically easier than challenging powerful corporations. But it’s wrong—and it's deadly.

I’m living proof of what these programs can do. CHIP didn’t just make my life easier; it made my life possible. If it had been cut, my family couldn’t have afforded another plan. I wouldn’t have gotten the insulin I needed. And my story certainly isn’t unique. It’s shared by millions of Americans who rely on Medicaid and CHIP every day.

We need to stop pretending that patients are the problem with health care costs. They aren’t. The real problem is the systemic abuse by Big Insurance—and it’s time we treated it that way. If we have the choice between policies that save lives and policies that take them, between policies that enable fraud by Big Insurance and policies that stop fraud, the path forward should be clear.

Rachel Madley is Director of Policy and Advocacy at the Center for Health & Democracy. She previously worked for Congresswoman Pramila Jayapal. She received her PhD from Columbia University and has written for publications including The New York Times.