Senate GOP restores Medicaid cuts to Trump tax package

Spending cuts to the health insurance program for the poor and disabled partially offset revenue losses from tax cuts in the measure and are a crucial demand of GOP fiscal conservatives.

The revision helps Republicans shore up the spending cuts they need to fund the bill, but it could also alienate three crucial senators — Susan Collins of Maine, Lisa Murkowski of Alaska and Thom Tillis of North Carolina — who have been pushing to scale back the Medicaid cuts.

Senate Republican Leader John Thune is trying to navigate competing demands from conservatives and moderates as he rushes to pass the massive tax and spending package to meet a July 4 deadline Trump has set for congressional approval.

The Senate’s legislative rules-keeper had judged a series of key health care provisions in the legislation ineligible for a special procedure Republicans are using to bypass the Senate’s normal process so they can avoid making concessions to Democrats. 

That earlier decision swept aside $250 billion in spending cuts fiscal conservatives had sought.

But Senate Parliamentarian Elizabeth MacDonough ruled acceptable a revised provision that would limit states’ ability to tax health care providers to help fund Medicaid, Senate Budget Committee Democrats said in an email on Sunday.

It wasn’t immediately clear how much budget savings the new version would produce.

The Congressional Budget Office has estimated that the legislation could lead to millions of people losing health coverage. The scorekeeper found that an earlier iteration of the Senate bill would lead to 11.8 million people losing health benefits by the end of the decade.

Earlier: Trump Tax Bill Hits $250 Billion Health-Care Snag in Senate

The revised provision is likely bad news for HCA Healthcare Inc. and Tenet Healthcare Corp., as hospitals are again facing potential cuts to Medicaid funding.

States often use the provider taxes, within some already existing rules, to draw down federal funding and increase payments to facilities like hospitals.

The House version of the provider tax provision, which is less aggressive than the Senate’s draft, would have saved the federal government $89 billion over a decade, according to congressional budget analysts.

Alaska, Biden Rules

The Senate’s rules-keeper also nixed measures that would’ve boosted some hospital outpatient payments and Medicaid federal matching rates for Alaska and Hawaii, according to Democrats on the Budget Committee. The measures had been included as Thune sought to win over support, including from Alaska’s Murkowski, who eventually helped advance the legislation after expressing hesitations.

Read More: Murkowski Votes to Advance Megabill After Securing Alaska Wins

The parliamentarian also said provisions aimed at blocking efforts to streamline federal health care enrollment and a Biden-era nursing home minimum staffing requirement weren’t in compliance with chamber rules. That could threaten billions in savings for the tax bill.

The Congressional Budget Office, when considering a similar House-passed measure aimed at blocking implementation the enrollment regulations until 2035, estimated $167 billion in savings over the next decade, while placing a moratorium on the nursing home staffing rule would save $23 billion.

The Senate version of the legislation, the centerpiece of Trump’s economic agenda, makes permanent individual and business tax breaks enacted in 2017, while adding temporary new breaks for tipped and overtime workers, seniors and car-buyers. 

The bill would add hundreds of billions of dollars in new spending for the military, border patrol and immigration enforcement. To partly pay for the revenue losses, the bill reduces spending on Medicaid, food assistance for low-income Americans and financial aid to college students.