Medicaid Kayfabe: Fake Wrestling

Medicaid was the most obvious football in the political game behind the recent passage of President Donald Trump’s One Big Beautiful Bill. As Democrats cried foul from the sidelines, the Republicans fought among themselves. In an earlier post on the Revaluing Care in the Global Economy website, I thought the budget hawks were winning out against MAGA loyalists who were concerned about backlash from working-class voters. 

I was wrong. Both these factions lost out to an overarching goal, what conservative New York Times columnist Ross Douthat describes as “the absolute priority that the Republican Party still gives to never raising taxes on the affluent and rich.” That he says “never raising” rather than “cutting” taxes illustrates the war of words and memes that has characterized the political debate.   

The end result of the bill, clearly explained in a recent Left Hook post by John Miller, is a significant redistribution of income from those who can’t afford health insurance to those who can purchase the finest boutique services from their personal physicians. 

Polls show that the bill is extremely unpopular, especially among those who understand its details, and even among Republicans who fear retribution in the midterm elections. Of course, Trump proclaimed it “the most popular bill ever signed in the history of our country.”

Football is clearly the wrong analogy for this game, which is better described as a  wrestling match full of “kayfabe,” defined by Merriam-Webster as “the tacit agreement between professional wrestlers and their fans to pretend that overtly staged wrestling events, stories, characters, etc., are genuine.” 

The features of the bill that are likely to help ordinary people were catchy and easy to understand—reduced taxes on tips and overtime pay and a higher standard deduction for the elderly on income taxes. Yet the projected revenue losses from these features are tiny compared to those incurred on behalf of those in Trump’s tax bracket. 

In the end, most of the largest revenue losses were officially discounted on the grounds that they originated in earlier legislation passed during Trump’s previous term in office—legislation that promised that the cuts would be discontinued this year. An already large deficit is now metastasizing, exposing “fiscal responsibility” as a fake Republican slogan. The libertarian Cato Institute, lashing out at this fakery, calls the bill a “big beautiful blunder that could increase national debt by $6 trillion.” 

Greater Republican anxiety is driven by projections that the cuts to social spending will not only harm the bottom 40% of income earners but are especially likely to cut services in the red states that are so central to the MAGA base. Looking back at how the debate played out, it seems entirely possible that Republican opposition was largely staged in order for those who are vulnerable to upcoming elections to claim plausible deniability—and describe how long they held out despite pressure from their leaders. The July 4 deadline that Trump used to force quick action was pure showmanship. 

 The bill itself was cleverly designed to both obfuscate its intention and divide opposition to tax cuts for the rich. Rather than explicitly cutting the Medicaid budget, it introduced administrative rules that will have that effect—simply making it harder to get and maintain eligibility. 

Little attention was given to a basic contradiction in the claim that it would reduce “shirking” among the very small number of working-age men not currently in wage employment. If they land in low-paying jobs that don’t offer health insurance, many will  remain technically eligible for assistance anyway. 

Nor did estimates of potential cost-savings take into account the additional burden on hospital emergency rooms, which are required by law to provide life-saving care even for those not covered by insurance. Many hospitals in rural areas, already under stress from the low reimbursement rates for both Medicaid and Medicare, are likely to close. 

As the American Hospital Association put it, “the real-life consequences of these reductions will negatively impact access to care for all Americans.” The president of the American Medical Association posted a Facebook video warning that the legislation will leave millions without coverage and worsen health outcomes. 

Republicans have expressed more horror at the potential impact of a dramatic increase in national debt, which could put pressure on interest rates. However, they don’t seem at all horrified by a proposed 50% reduction in the enforcement budget for the Internal Revenue Service, which will, in the words of the Tax Law Center, “declare open season for high-end tax evasion.” 

 So much for law and order—Hulk Hogan-style kayfabe is way more fun.