Republican senators are proposing even more drastic cuts to Medicaid than their House counterparts, setting the latest iteration of the GOP’s reconciliation megabill up for opposition from healthcare lobbies — and likely complicating the bill’s chances of passing the full Senate.
The Senate Finance Committee released its draft version of the legislation on Monday. It includes a number of similar provisions that the House greenlit late last month, like requiring states to increase how often they check eligibility for the safety-net insurance coverage as well as implementing work requirements.
However, while the House bill would exempt adults with dependent children from logging work, education or volunteer hours to stay enrolled in the coverage, the Senate version would only excuse guardians whose children are ages 14 or younger — essentially expanding the work requirement to parents of teens.
The Senate’s bill would also implement more restrictions on provider taxes, arrangements in which states tax providers to help finance their share of Medicaid expenditures.
The House proposed freezing the taxes at current rates and preventing states from levying new ones. But the Senate bill would lower the amount that a state can tax providers from 6% to 3.5% in states that have expanded Medicaid under the Affordable Care Act. The rate would be gradually lowered each year starting in 2027 until it reaches the new threshold.
Taxes levied on nursing and intermediate care facilites would be exempt. Republicans have zeroed in on the payments as an area for reform, arguing states use the taxes to unfairly boost federal Medicaid contributions.
State-directed payments, or arrangements that allow states to make supplemental payments for services covered in Medicaid managed care contracts, would also face new restrictions. Providers say that state-directed payments are essential to keep Medicaid-dependent clinics and hospitals afloat.
Currently, the threshold at which the federal government stops matching state funds is capped at the average commercial rate.
But the Senate bill would direct the HHS to revise that payment limit to Medicare rates in expansion states, and 10% above the Medicare rate in non-expansion states.
Existing state-directed payments would have been grandfathered in under the House version. However, the Senate’s legislation would cut payment limits for those arrangements each year until they reach the Medicare-linked rate.
The Senate preserved the House’s proposed $35 co-pay for select services for some Medicaid patients above the poverty line. It also kept stricter eligibility verification processes in place for Americans in Medicaid plans.
Provider groups — already concerned about the impact Medicaid cuts could have on their bottom lines — slammed the Senate’s changes on Monday.
Cuts in the Senate’s draft are “draconian” and will “devastate health care access for millions of Americans,” Dr. Bruce Siegel, the president and CEO of America’s Essential Hospitals, said in a statement.
The bill “moves in the wrong direction” and will undermine hospitals’ ability to care for Medicaid enrollees, Rick Pollack, the president and CEO of the American Hospital Association, said.
Meanwhile, Chip Kahn, the Federation of American Hospitals’ president and CEO, urged lawmakers to reject the increased cuts to Medicaid, arguing rural hospitals in particular will be forced to cut services or shut down entirely.
“The Senate just made a bad bill worse,” he said.
Senate Finance Committee Chairman Mike Crapo, R-Idaho, didn’t directly address the healthcare provisions in the text in a statement Monday. But he argued the legislation targets “waste, fraud and abuse in spending programs while preserving and protecting them for the most vulnerable.”
Republican lawmakers and Trump administration officials have previously made similar arguments about the Medicaid provisions, arguing the policies preserve the safety-net insurance for the neediest beneficiaries by culling able-bodied enrollees and undocumented immigrants from the rolls.
However, the legislation is unpopular with voters. Nearly two-thirds of the public views the reconciliation bill passed by the House unfavorably, according to a poll released Tuesday by health policy research firm KFF.
Still, the text could change as Republicans in Congress debate the massive budget bill. GOP leadership wants to get the legislation to President Donald Trump’s desk by July 4.
Rebecca Pifer contributed reporting.
