Welp. Senate version of the #MAGAMurderBill would slash Medicaid even MORE.

Mon, 06/16/2025 - 5:16pm

Senate GOP tax bill would hit politically explosive Medicaid provision

The Finance Committee is due to brief members on its megabill draft text Monday night.

Senate Republicans are seeking to ratchet up savings from a politically explosive policy within Medicaid to pay for their megabill, and it’s already setting off shockwaves through Capitol Hill.

The Senate Finance Committee’s forthcoming portion of the party-line tax and spending package would lower the Medicaid provider tax to 3.5 percent, according to three people with direct knowledge of the legislation who were granted anonymity to discuss it.

That would be a huge departure from the House-passed bill, which would put a moratorium on states’ ability to raise their provider tax beyond the current 6 percent. It’s also likely to spark fierce pushback from a coalition of GOP senators who were already worried that the freeze would negatively impact rural hospitals in their states. Republicans are expecting the forthcoming Medicaid language will have to be further negotiated.

“Hell no,” said one moderate House Republican who was granted anonymity to react candidly to the Senate proposal. That lawmaker is part of a group warning that deeper changes to the provider tax would be viewed as cuts to the program and are a red line for them.

Still, Senate Republicans are scrambling to notch deeper spending cuts in the filibuster-skirting legislation, and the provider tax is one of the few areas lawmakers can increase savings while not touching Medicare — another entitlement program GOP lawmakers were briefly flirting with overhauling to find offsets.

OK, first of all, I'm rolling my eyes at the anonymous "moderate" House Republican who supposedly is solidly opposed to the change. I'll believe it when I see it.

There's also this, according to David Dayen of The American Prospect:

BIG UPDATE: The new changes in the Senate version of BBB that will cut funding for Medicaid do not apply to Medicaid non-expansion states, per sources familiar. In those 10 states (WI, WY, KS, TX, TN, MS, AL, GA, SC, FL), provider taxes and state-directed payments will be frozen at current levels.

ADDITIONAL UPDATE: All PBM reforms have been stripped out of the bill. This included a ban on spread pricing in Medicaid, which allows PBMs to play on information advantages and pocket the spread between what they pay drug companies and what they charge pharmacies.

The upshot: states are rewarded under the bill for not expanding Medicaid; their finances will be easier to manage. PBMs will continue to rip people off. (Including the government; that provision saved money!) The Senate version is worse for Medicaid patients and hospitals than the House's.

I've attached the full legislative text (all 500+ pages of it) below and am digging through it now.

I think this is the part which Dayen is referring to:

SEC. 71111. EXPANSION FMAP FOR CERTAIN STATES PROVIDING PAYMENTS FOR HEALTH CARE FURNISHED TO CERTAIN INDIVIDUALS.

Section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended—

(1) in subsection (y)—

Subsection (y) refers to the ACA's 90% federal funding rate for the Medicaid expansion population.

(A) in paragraph (1)(E), by inserting ‘‘(or, for calendar quarters beginning on or after October 1, 2027, in the case such State is a specified State with respect to such calendar quarter, 80 percent)’’ after ‘‘thereafter’’; and (B) in paragraph (2), by adding at the end the following new subparagraph:

This means that the FMAP drops from 90% to 80% for "specified states," which are defined as...

‘‘(C) SPECIFIED STATE.—The term ‘specified State’ means, with respect to a quarter, a State that—

‘‘(i) provides any form of financial assistance from a State general fund during such quarter, in whole or in part, whether or not made under a State plan (or waiver of such plan) under this title or under another program established by the State, to or on behalf of an alien who is not a qualified alien and is not a child or pregnant woman who is lawfully residing in the United States and eligible for medical assistance pursuant to section 1903(v)(4) or is eligible for child health assistance or pregnancy-related assistance pursuant to section 2107(e)(1)(P), for the purchasing of health insurance coverage (as defined in section 2791(b)(1) of the Public Health Service Act) for an alien who is not a qualified alien and is not such a child or pregnant woman; or

Welp. There it is: Any state which provides either Medicaid or any other type of state-based healthcare program coverage to undocumented immigrants would see their FMAP rate drop from 90% to 80%.

‘‘(ii) provides any form of comprehensive health benefits coverage, except such coverage required by Federal law, during such quarter, whether or not under a State plan (or waiver of such plan) under this title or under another program established by the State, and regardless of the source of funding for such coverage, to an alien who is not a qualified alien and is not such a child or pregnant woman.

‘(D) IMMIGRATION TERMS.—

‘‘(i) ALIEN.—The term ‘alien’ has the meaning given such term in section 101(a) of the Immigration and Nationality Act.

‘‘(ii) QUALIFIED ALIEN.—The term ‘qualified alien’ has the meaning given such term in section 431 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, except that the references to ‘(in the opinion of the agency providing such benefits)’ in subsection (c) of such section 431 shall be treated as references to ‘(in the opinion of the State in which such comprehensive health benefits coverage or such financial assistance is provided, as applicable)’.’’; and

(2) in subsection (z)(2)—

(A) in subparagraph (A), by striking ‘‘for such year’’ and inserting ‘‘for such quarter’’;

and

(B) in subparagraph (B)(i)—

(i) in the matter preceding subclause (I), by striking ‘‘for a year’’ and inserting ‘‘for a calendar quarter in a year’’; and

(ii) in subclause (II), by striking ‘‘for the year’’ and inserting ‘‘for the quarter for the State’’.

SEC. 71112. EXPANSION FMAP FOR EMERGENCY MEDICAID.

Section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended by adding at the end the following new subsection:

‘‘(kk) FMAP FOR TREATMENT OF AN EMERGENCY MEDICAL CONDITION.—Notwithstanding subsection (y) and (z), beginning on October 1, 2026, the Federal medical assistance percentage for payments for care and services described in paragraph (2) of subsection 1903(v) furnished to an alien described in paragraph (1) of such subsection shall not exceed the Federal medical assistance percentage determined under subsection (b) for such State.’’.