Several Republican lawmakers are speaking out about proposed Medicaid cuts in the Senate’s tax package and the Senate parliamentarian has warned of procedural violations — putting the July 4th goal for passing a reconciliation bill in jeopardy.
The House-passed One Big Beautiful Bill Act (OBBBA, H.R. 1) makes cuts to Medicaid to partially offset the bill’s costs. The Senate version, however, would go even further, as outlined by KFF.
The Senate proposal would “amplify the effects” of the House bill for Affordable Care Act expansion states, according to KFF’s Elizabeth Williams, Alice Burns, and Robin Rudowitz.
Among the changes in the Senate draft are reducing provider taxes in expansion states, which the KFF authors say could “reduce federal Medicaid spending in 22 states by tens of billions or hundreds of billions of dollars.” They also note Senate provisions that would limit certain federal matching payments and change work requirements in expansion states.
Republican opposition builds.
While leadership maintains that cuts to Medicaid simply target waste, fraud, and abuse, some Republicans have been vocal about the potential impacts of those cuts — especially the deeper Senate cuts.
Sixteen House Republicans signed onto a June 24 letter opposing the Senate’s Medicaid proposal, which they say “undermines the balanced approach” of the House and “treats expansion and non-expansion states unfairly.”
The House lawmakers also contend that the Senate version does not “give hospitals sufficient time to adjust to new budgetary constraints or to identify alternative funding sources.” They urge Senate Majority Leader John Thune (R-SD) and House Speaker Mike Johnson (R-LA) to maintain the cuts in the House-passed bill.
A few Senate Republicans, too, have come out against the cuts. Among the most vocal has been Senator Josh Hawley (R-MO), who penned a New York Times op-ed last month opposing Medicaid cuts. “If Congress cuts funding for Medicaid benefits, Missouri workers and their children will lose their health care. And hospitals will close. It’s that simple,” Hawley wrote. “And that pattern will replicate in states across the country.”
Hawley had President Donald Trump’s ear on the Senate’s Medicaid cuts, posting on X June 25 that the president said, “Stay with the House!”
Hawley is not the only senator with reservations. Senators Thom Tillis (R-NC) and Susan Collins (R-ME) have also reportedly voiced their concerns about the deeper Senate cuts.
Byrd rule issues.
Beyond lawmaker opposition, some of the Medicaid reconciliation provisions also may face a procedural hangup in the Senate. That chamber’s Byrd rule limits reconciliation provisions to those that “produce a change in outlays or revenues” within the relevant budget window.
Provisions in the Senate bill that do not produce such a change, or where the change is “merely incidental,” are subject to a “point of order.” Such provisions would then need to be modified or dropped — or be subject to a 60-vote supermajority. Reconciliation bills typically need just 50 votes to pass the Senate.
The Senate parliamentarian, Elizabeth MacDonough, has been reviewing the Senate draft for potential Byrd rule violations over the last several days. Senate Budget Committee Ranking Member Jeff Merkley (D-OR) said on June 26 that MacDonough had identified several Medicaid provisions subject to a point of order.
The offending provisions include a proposal on provider taxes and a proposal to lower the federal medical assistance percentage (FMAP) for certain expansion states. Also on the list are proposals to end Medicaid eligibility for certain non-citizen legal immigrants and prohibit them from qualifying for premium tax credits for the purchase of Affordable Care Act Marketplace plans.
Senate Finance Committee Ranking Member Ron Wyden (D-OR) celebrated the parliamentarian’s findings, saying they would force Republicans to “backtrack on $250 BILLION in Medicaid cuts.”
“The Parliamentarian has made clear that reconciliation can not be used to manipulate state provider tax policies,” Wyden stressed in a June 26 statement. He added that the proposal “would have resulted in massive Medicaid cuts that hurt kids, seniors, Americans with disabilities and working families.”
Merkley’s June 26 press release indicated that there are still several health care provisions under review.
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