Robert F. Kennedy Jr., President Donald Trump’s pick for HHS secretary, appeared confused about key aspects of Medicare and Medicaid during a contentious Senate confirmation hearing Wednesday, including making mistakes about how the massive federal insurance programs are funded.
Sen. Bill Cassidy, R-La., peppered the nominee with questions about a range of topics related to public health insurance programs, including how the HHS should care for beneficiaries who are dually eligible for both Medicare and Medicaid.
“I’m not exactly sure, because I’m not in there. I mean, it is difficult to integrate them, because Medicare is under fee for service, paid for by employer taxes. Medicaid is fully paid for by the federal government, and it’s not fee for service,” Kennedy said during the hearing in front of the Senate Committee on Finance.
The Medicaid program, which along with the Children’s Health Insurance Program covers nearly 80 million Americans, is jointly funded by states and the federal government. The federal government foots at least half of states’ Medicaid bills.
Additionally, though more than half of Medicaid spending consisted of capitated payments to managed care organizations in fiscal year 2023, a smaller chunk was delivered through fee-for-service reimbursement, according to health policy research firm KFF. For example, more than 20% of Medicaid spending was for fee-for-service acute care in 2023.
Kennedy also said patients are dissatisfied with Medicaid because they face high deductibles and premiums. However, most enrollees in the safety-net program do not pay premiums or deductibles, as federal law limits their cost-sharing burden.
“States share in the funding of Medicaid. Millions of disabled children in this country are alive because of Medicaid,” said Sen. Maggie Hassan, D-N.H. “[…] So those are some facts about Medicaid that you might want to brush up on.”
Moreover, Kennedy’s comments on Medicare also suggest the nominee has a loose understanding of how the program operates. Medicare provides hospital, outpatient and prescription drug benefits to more than 66 million Americans. Though the employer taxes cited by Kennedy fund Medicare’s hospital benefit, Medicare’s physician and drug benefits are largely funded by premiums and general revenue.
Medicare is also not solely operated on a fee-for-service basis, as privatized Medicare Advantage plans receive per-member, per-month payments for covering Medicare members. More than half of people in Medicare plans — some 33 million Americans — are in MA, including a significant portion of dual-eligible individuals.
The exchange with Cassidy could be significant for Kennedy’s confirmation. To succeed, only three Republican lawmakers can vote against his nomination, assuming all Democrats also vote down the Kennedy pick.
Sens. Susan Collins, R-Maine, Lisa Murkowski, R-Alaska, and Mitch McConnell, R-Ky., are likely no votes, according to a note by TD Cowen analyst Rick Weissenstein. Cassidy, a physician, could be a possible fourth vote against Kennedy, he added.
Medicaid has become a significant policy concern under the Trump administration. Republican lawmakers have signaled interest in cutting the safety-net program to balance out the impact of tax cuts, either through restricting eligibility or reducing funding.
States also faced uncertainty this week after the Trump administration enacted a freeze on federal financial assistance. Lawmakers reported states were locked out of Medicaid payment portals, even though the administration officials said the program should be unaffected.
The White House rescinded the financial freeze memo on Wednesday.
Rebecca Pifer contributed reporting.
