A group of House Republicans is warning that they won’t support the Senate’s version of the tax and spending bill because the proposed Medicaid cuts are too steep.
Led by Rep. David Valadao (R-Calif.), 15 other vulnerable Republicans sent a letter to Senate Majority Leader John Thune (R-S.D.) and House Speaker Mike Johnson (R-La.) saying they support the Medicaid reforms in the House version of the legislation, but the Senate Finance Committee proposal went too far.
“Protecting Medicaid is essential for the vulnerable constituents we were elected to represent. Therefore, we cannot support a final bill that threatens access to coverage or jeopardizes the stability of our hospitals and providers,” the lawmakers wrote. “The House’s approach reflects a more pragmatic and compassionate standard, and we urge that it be retained in the final bill.”
The Senate Finance Committee draft seeks to clamp down on two tactics states use to boost Medicaid funding to hospitals: state-directed payments and Medicaid provider taxes. The restrictions are a major concern for rural hospitals, a key constituency for senators.
Republicans have set an ambitious July 4 deadline to pass the bill and send it to President Trump to be signed into law.
The letter from the lawmakers, who all voted for the bill that included $700 billion in Medicaid cuts over the next decade, is a sign that significant issues still need to be straightened out for the bill to move forward.
Unlike the House bill, the Senate Finance Committee draft includes a significant cut to the taxes states can levy on medical providers. States impose taxes on providers to boost their federal Medicaid contributions, which they then direct back to hospitals in the form of higher reimbursements.
The legislation would effectively cap provider taxes at 3.5 percent by 2031, down from the current 6 percent, but only for the states that expanded Medicaid under the Affordable Care Act. The cap would be phased in by lowering it 0.5 percent annually, starting in 2027.
Non-expansion states would be prohibited from imposing new taxes, but as was true in the House-passed version, their rates would be frozen at current levels. The lower cap would not apply to nursing homes or intermediate care facilities.
“Throughout the budget process, we have consistently affirmed our commitment to ensuring that reductions in federal spending do not come at the expense of our most vulnerable constituents. We write to reiterate that commitment to those we represent here in Washington,” the members wrote.
They also expressed concern about “rushed implementation timelines” as well as changes to the work requirements for adults with dependents. The House bill imposes work requirements on Medicaid expansion enrollees aged 19 to 64 but exempts people with dependent children. The requirements will begin in 2027.
Seeking additional cuts, the Senate version would put those requirements on parents with children over the age of 14.
In a statement to The Hill, Democratic Congressional Campaign Committee spokesperson Justin Chermol said the letter rings hollow.
“Spare us the performative bulls[—]. These so-called moderates already voted for the largest cut to Medicaid in American history – and when the time comes, they’ll cave to their D.C. party bosses once again to give their billionaire donors a massive tax break,” he said.
