A Republican tax and spending proposal in the Senate is advancing quickly and is set to result in deeper healthcare cuts and an increase in uninsured individuals compared to the version that previously passed in the House, according to a report from the Congressional Budget Office (CBO).
The legislation could lead to 11.8 million Americans being uninsured by 2034. The CBO indicates that this number is nearly one million higher than what was projected with the House’s version. This includes about 1.4 million people lacking “verified citizenship, nationality, or satisfactory immigrant status,” who would lose state-funded assistance.
Additionally, the bill would reduce federal expenditures on Medicaid, Medicare, and Obamacare by $1.1 trillion, with over a trillion dollars coming solely from Medicaid cuts.
Despite President Trump’s ongoing promises to eliminate only waste and fraud in Medicaid, the CBO’s analysis reveals that this law implements significant cuts to programs that currently serve more than 70 million low-income Americans.
The savings are expected to originate from various strategies, but a large portion will come from strict labor requirements and new limits on state taxes related to healthcare providers.
For the first time, beneficiaries of Medicaid will need to demonstrate that they work at least 80 hours each month to keep their health insurance under this bill. The requirement extends to low-income parents of children aged 14 and older, as well as non-disabled adults without children. This aspect is expected to save about $325 billion over ten years.
The changes to provider tax represent the second-largest cut in the House bill following work requirements, and these reductions are even greater in the Senate’s plan. The CBO estimates that these modifications could decrease spending by around $191 billion over a decade.
The provider tax clauses are particularly divisive in the Senate, as states impose taxes on providers to boost federal Medicaid funding, which often reroutes to hospitals via increased reimbursements.
This restriction on the provider tax is a long-time objective for conservatives since states argue they are largely responsible for current federal Medicaid spending. However, senators from states with significant rural populations, like Josh Hawley (R-Mo.), Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), and Tom Tillis (R-N.C.), have voiced their opposition to the scale of the cuts.
While the House version maintains existing tax rates for most states, the Senate’s proposal requires many states to lower their current rates. To persuade wary senators about provider tax reductions, the bill allocates $25 billion to support rural hospitals.
Regardless, this amount didn’t sway Tillis, who voted alongside Democrats against a procedural motion on Saturday night. Hawley supported the motion and expressed his backing for the bill, despite worries about cuts to Medicaid.
Further discussions are ongoing as Republicans and the Senate negotiate key components of the bill, which remain fluid. Lawmakers face a July 4th deadline set by the White House to pass the legislation in the Senate before it heads to President Trump.
