Senate Republicans remain divided over health care provisions in the budget reconciliation package, with some suggesting that the proposed Medicaid cuts go too far while others push for even deeper cuts. With these disagreements, the goal of passing the final bill by July 4 seems increasingly challenging to meet.
On Monday, June 16, the Senate Committee on Finance, which has jurisdiction over tax and health-related provisions, released draft text of their portions of the reconciliation bill. The language e would cause millions of Americans to lose their health care and harm hospitals’ and states’ flexibility to finance care to the Medicaid population. Policies of most concern in the bill are restrictions on state directed payments and provider taxes. The bill heavily targets states that have expanded Medicaid.
The bill restricts new SDPs to 100% of the published Medicare Payment Rate for expansion states and 110% of the Medicare Payment Rate for non-expansion states. Temporary grandfathering is set for current SDPs in place beginning in rating periods starting on or after January 2027, while existing SDPs would be phased down to 100% of the Medicare rate in expansion states and 110% of the Medicare rate in non-expansion states at 10% a year until the new rate limit is reached.
Like the House-passed bill, there is also a moratorium on new provider taxes and some grandfathering of existing taxes. However, in expansion states, existing provider taxes will be gradually capped at 3.5% over time (other than taxes on nursing facilities or ICF-IDDs) with a phased in 0.5% reduction in the hold harmless level per year until that cap is reached.
The Senate Committee on Health, Education, Labor and Pensions released its section of the bill last week, and it largely aligns with the House-passed version of the bill. The committee’s Ranking Member Bernie Sanders (I-Vt.) released a request for information (RFI) aimed at providers and is seeking insights into the harmful impacts of H.R. 1. Information can be sent to providerinput@help.senate.gov, and association members are urged to reach out with formal feedback ahead of the Friday, June 20 deadline.
On Thursday, June 12, Senate Democrats released a series of legislative proposals to strengthen and invest in Medicaid. It stands in opposition to the Republicans’ reconciliation package.
Recent Hearing
The House Committee on Energy and Commerce Subcommittee on Health held a hearing on Wednesday, June 11, on the health care supply chain. Subcommittee Republicans focused on reducing American reliance on China and India for pharmaceutical manufacturing, promoting long-term contracts, reshoring the full supply chain, and reducing regulatory barriers to bolster domestic production. Subcommittee Democrats acknowledged the risks of foreign dependence but repeatedly criticized the Trump administration for FDA layoffs and budget cuts; raising concerns about FDA staffing and inspection delays, tariff impacts on the supply chain, and patient safety. Building resilience without raising costs or compromising safety was also emphasized.
Committee Activity This Week
The Senate is in session Monday through Wednesday this week before both chambers observe the Juneteenth federal holiday on Thursday, June 19.
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