‘Deeply harmful’ Medicaid cuts still in ‘big beautiful’ bill after parliamentarian ruling, expert says Yet other proposals like work requirements were left untouched
A Senate referee has rejected certain proposed Medicaid cuts including caps on provider taxes
While some Medicaid cuts proposed in Republicans' One Big Beautiful Bill Act were rejected by the Senate parliamentarian on Thursday, other reforms to the program that could affect individuals' access to coverage were left untouched.
The Senate parliamentarian rejected proposed changes aimed at capping states' provider taxes, which are used to help fund states' Medicaid expenditures. The Senate provision reduces the safe harbor limit in expansion states and puts a moratorium on any new provider taxes in all states.
Yet other parts of the proposed Medicaid cuts — including new work requirements of 80 hours per month and more frequent redetermination evaluations every six months — made it past the Senate referee.
"The Senate bill, like the House bill, includes deep cuts to Medicaid and other health programs, and is deeply harmful, whether or not these provisions stay in or out," said Allison Orris, senior fellow and director of Medicaid policy at the Center on Budget and Policy Priorities.
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The House version of the One Big Beautiful Bill Act would reduce federal Medicaid spending by almost $800 billion, according to estimates from the Congressional Budget Office.
Republican lawmakers are pushing to pass the bill through budget reconciliation, an expedited legislative process that requires a simple majority vote. This week, the Senate parliamentarian evaluated whether the proposal complies with the Byrd rule, which prohibits the inclusion of changes that are extraneous to the budget.
While the Senate parliamentarian's decisions mean certain provisions cannot stay in as written, that leaves room for lawmakers to change the language of the proposal or make other adjustments.
How Medicaid provider taxes may affect coverage
Medicaid provider taxes offer a way for states to raise money for the non-federal share of funding toward the program, Orris said. If states are limited on how they can do that, the federal government will spend less on Medicaid, she said.
The CBO scores a reduction in provider taxes as a Medicaid cut, Orris said, because it is assumed states will not be able to replace that revenue.
In response to restrictions on provider taxes, states could make decisions that would result in people losing Medicaid coverage, Orris said. Based on the House version of the bill, the CBO has estimated around 400,000 people could lose Medicaid coverage based on the proposed changes to provider taxes, she said.
Some Republican lawmakers have expressed concerns that the changes to the provider taxes would hurt rural hospitals financially and prompt them to reduce services or close.
In addition to Medicaid provider taxes, the Senate parliamentarian also rejected proposals to make certain immigrants who are not citizens ineligible for Medicaid coverage.
About 7.8 million people may lose Medicaid coverage based on both the House version of the "big beautiful" bill and Affordable Care Act changes including expiring subsidies and rule changes proposed by the Trump administration, according to Washington, D.C.-based think tank Third Way.
In a recent report, Third Way found the budget bill may increase medical debt by $50 billion — a 15% rise over today's $340 billion in unpaid debts.
This story originally appeared on: CNBC - Author:Lorie Konish
