Musk, DOGE threaten the health of millions of Americans

As Donald Trump begins his second term as US president next week, the nation he was elected to lead faces critical ongoing health challenges. These include rising medical costs, stagnant life expectancy and rampant burnout among healthcare workers.

Amid the medical turmoil, an unexpected figure has emerged—a civilian with no official government role is now poised to wield unprecedented influence over the federal budget.

Elon Musk, the world’s richest man, co-chairs the Department of Government Efficiency (DOGE), a non-governmental entity charged with cutting $500 billion in annual government spending.

But as the fiscal math unfolds, Musk and his DOGE co-chairman Vivek Ramaswamy face a frightening reality. Hitting their target will require them to inflict great suffering on millions of American families.

Wiping dollars out of American health care

Since Trump’s first term as president, the country’s economic outlook has deteriorated dramatically.

In 2016, the national debt was $19 trillion, with $430 billion spent annually on interest payments. By 2024, the debt had grown to $36 trillion, requiring $882 billion in debt service — 13% of federal spending that DOGE can’t touch.

Add to that figure another 48% in government spending that Trump has deemed politically untouchable: Social Security, Medicare and Defense. That leaves just $2.6 trillion (39%) of the $6.75 trillion budget up for grabs.

In a recent op-ed, Musk and Ramaswamy pledged to find half a trillion in savings by eliminating outdated or misused federal programs (though that was a significant pullback from the $2 trillion Musk had previously promised).

However, the examples they cited—such as the Corporation for Public Broadcasting, Planned Parenthood, and various international grants—account for less than $3 billion, not even 1% of their goal.

Therefore, Musk and Ramaswamy will obviously have to zero in on American health care. Even with more than trillions in government spending on health care, the choices are few.

Medicare, the $850 billion program for Americans over 65, is untouchable. So is $300 billion in tax credits for employer-sponsored health insurance and $120 billion in expired veterans health programs. The cut either involves raising taxes on 160 million working Americans or harms the health of millions of veterans.

That leaves DOGE with little choice but to cut programs that serve low-income Americans: Medicaid and online health exchanges.

Here’s how these cuts will play out and the devastating impact they would have on the lives of over 20 million Americans:

1. Defunding the ACA Exchange

Since the Affordable Care Act became law in 2010, it has provided insurance premium subsidies to Americans earning 100% to 400% of the federal poverty level.

For lower-income families enrolled in online health exchanges, the ACA also includes Cost-Sharing Reductions, which help offset deductibles and co-pays. These reductions, which average 30% of total premiums, make coverage more affordable for enrollees.

Without CSR, a family of four earning $40,000 could face deductibles of up to $5,000 before their insurance benefits take effect. The result: 7 million would leave the exchanges, with about 4 million families left uninsured.

If Congress allows CSR payments to expire in 2026, federal spending could drop by about $35 billion a year. As millions of individuals drop out of the exchanges and forego re-enrollment due to unaffordable out-of-pocket costs, DOGE could also receive credit for up to $50 billion in additional savings. While these cuts may help meet budget targets, the human cost is undeniable: millions of low-income American families would lose health insurance.

2. Slash Medicaid Coverage, Tighten Eligibility Requirements

To achieve $500 billion in annual savings, DOGE will almost certainly target Medicaid, which provides health care for over 90 million low-income Americans, including children, the elderly and individuals with disabilities.

Several cost-cutting strategies are on the table, including reducing federal payments to states, tightening eligibility criteria and restructuring Medicaid into lower-cost block grants.

Recall that the Affordable Care Act expanded Medicaid eligibility to individuals earning up to 138% of the federal poverty level. While Medicaid expansion remains optional, 40 states have adopted the program, helping cut the uninsured rate in the US in half—from 16% (50 million people) to 8% (25 million). DOGE would need Congressional approval to reverse this expansion, removing coverage from millions of participating states.

Another possible strategy involves establishing work requirements for Medicaid recipients. While proponents argue that this would boost employment, data show that most Medicaid enrollees already work for employers that do not offer insurance — or they are unable to work because of caregiving responsibilities or serious health conditions. In reality, work requirements would function primarily as bureaucratic hurdles, disqualifying or discouraging qualified individuals and increasing the uninsured rate.

Restructuring Medicaid funding into block grants is a final option. Unlike the current system, which adjusts funding based on need, block grants provide states with a fixed dollar amount. This will likely force states to cut services, further limit eligibility, or both. Although advocates argue that block grants offer states greater flexibility, the main result would be fewer medical services and fewer Medicaid beneficiaries.

In total, Medicaid currently costs $800 billion annually, with the federal government paying 70%. Reducing enrollment by 10% (9 million people) could save over $50 billion a year, while a 20% reduction (18 million people) could save $100 billion.

However, the consequences of such measures would be devastating. Medicaid covers more than 40% of births in the US, ensuring healthier babies and protecting families from financial ruin. It funds routine check-ups, vaccinations and treatment for chronic diseases such as asthma and diabetes for children. It also provides essential nursing home care and home health services for seniors and individuals with disabilities who cannot live independently.

But the fallout would not end with tens of millions of Americans losing health care coverage. If DOGE cuts Medicaid, states will be forced to absorb much of the financial burden. And since states are required to have a balanced budget, rising health care costs are likely to lead to cuts in education funding, reduced infrastructure investments and the closing of community hospitals — many of which are already struggling to make ends meet. standing – further straining local economies and leaving patients with nowhere to turn.

The first 100 days

The numbers don’t lie: Musk and DOGE must either cut Medicaid funding and ACA subsidies or abandon their $500 billion pledge. There is no other way to achieve their budget reduction target in the first year.

However, this draconian approach is not the only path to fiscal responsibility. There are long-term health care solutions that can reduce medical expenses while maintaining the health of the country. These would require bold and systematic reforms, but they are achievable.

They include changing the way doctors and hospitals are paid to reward superior clinical outcomes rather than higher volumes, capping drug prices at levels comparable to other countries, and deploying generative AI to prevent and manage chronic diseases more effectively.

These strategies would reduce costs by improving quality and preventing heart attacks, strokes and kidney failure, not by rationalizing care. Unfortunately, neither Musk nor DOGE have supported these ideas.

Right now, the health care of tens of millions of Americans hangs in the balance, seemingly collateral damage in a politically and financially impossible quest.