Senate Finance Committee Endangers Even More Medicaid Patients

[justaprogressive]

The Senate Finance Committee released the text of its critical portion of the Big Beautiful Bill late Monday afternoon. The big thing to note is that the Senate does pick fights with two motivated House factions: the “SALT Caucus” that wants bigger tax breaks for high-income earners who deduct state and local taxes, and the Freedom Caucus that wants quicker phaseouts for clean-energy tax credits. But in the health care title, the bill actually got worse, and will be more immiserating for patients, hospitals, and states, particularly blue states.

Here’s what we know so far while we continue to dig into it:
Health care: As we reported on Monday, the brief flirtation with tackling the biggest source of waste and fraud in the entire health care budget, Medicare Advantage overpayments, was quickly extinguished. Instead, we have a health care title that, against all expectations, is actually worse on net than the House version.

The only Medicare policy change is a limitation on coverage for certain immigrants. (Specifically: refugees, aliens granted asylum, aliens granted parole for at least one year, abused spouses, victims of trafficking, and Haitian entrants. Cuban entrants, in a nod to Cuban Republicans, still get coverage.) Other House provisions that cost money, like inflation adjustments on doctor reimbursements, and the Accelerating Kids’ Access to Care Act, were stripped out. In addition, all the health savings account (HSA) changes that the House put in to allow older workers and some Medicare recipients to gain the tax advantage were stripped by the Senate.

One positive here: The “orphan cures” provision, an attempt to hobble the Medicare price negotiation process established in the 2022 Inflation Reduction Act by exempting certain expensive classes of drugs from negotiations, was also removed. This means that price negotiations will have fewer restrictions from going after high-cost drugs.

On Medicaid, the two major differences with the House version will lead to fewer resources for states to administer their programs. The House had already limited the Medicaid provider tax, a gimmick that 49 states use to generate more federal funding. It’s complicated, but generally speaking it works like this: States tax health providers like clinics and hospitals, but then cover the tax through higher Medicaid reimbursements. But states don’t pay all of that reimbursement; they get a large share from the federal government. So it’s a way for states to get more federal dollars into their systems.

https://prospect.org/politics/2025-06-17-senate-finance-committee-endangers-even-more-medicaid-patients/

[muriel_volestrangler]

1. "That would cut federal Medicaid dollars coming into the states, bit by bit over time"

The key paragraph:

The House version mostly prohibited further rate expansions and new provider taxes. But the Senate version would actually cap the rate of provider taxes over time by reducing them by 0.5 percent per year starting in 2027, with an eventual cap at 3.5 percent by 2031. That would cut federal Medicaid dollars coming into the states, bit by bit over time.

And the conclusion:

All they did in the Senate was make the bill worse for states, worse for patients as states react by cutting programs back, and worse for hospitals as they lose more and more insured patients. The coverage losses will likely be worse than in the House, which also means more people will die as a result of the Senate’s actions.