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Senate Conservatives Want Deep Cuts

Conservative senators are arguing that huge new spending cuts need to be added to the budget reconciliation bill if they are to vote for the package. One lawmaker called the bill a “debt bomb.” At least four senators on the right have raised issues with the long-term implications of more debt and deficits. Deficits will grow from $2.2 trillion a year in FFY 2025 to more than $2.5 trillion in FFY 2035. Many want a return to pre-pandemic levels of spending. The Senate problem is a group of moderates who could sink the bill want fewer Medicaid cuts.

Also, a good article on the provider tax reductions and impacts on states and providers. And a good article talking about impacts to younger Americans of losing Medicaid.

Additional article: https://stateline.org/2025/05/27/republicans-target-a-tax-that-keeps-state-medicaid-programs-running/ and https://www.healthcaredive.com/news/medicaid-cuts-impact-young-adults-urban-institute/749030/

#budgetreconciliation #trump #congress #medicaid #coverage

https://thehill.com/homenews/senate/5316940-trump-bill-fiscal-concerns-republicans

More Data Needed On Medicare Advantage Payments

While the authors of a Health Affairs Forefront blog appear to be sympathetic to charges that Medicare Advantage (MA) is considerably overpaid, they do admit that more data needs to be shared in order to conclude what many academics find with faulty data.

They note that MA now costs about 14% of federal outlays and is projected to grow to 18% by 2034. They repeat the dubious statistic that payments to MA plans exceed by 20% what Medicare would spend in the traditional program.

But the authors do note that none of the relevant agencies (the Congressional Budget Office, the Office of Management and Budget, the Medicare Payment Advisory Commission, the Medicare Trustees, or the Centers for Medicare and Medicaid Services Office of the Actuary) has released public assessments of what Medicare spending would be now or in the future, adjusted for health risk and differences in coding practices. They also note that assessments must take into account a variety of dynamic and interacting variables, including demographics and health status, selection, coding practices, and quality bonuses, among others.

I note that any number of studies point to the positive effect MA penetration has on FFS costs in certain areas.

(Article may require a subscription.)

#medicareadvantage #overpayments #riskadjustment

https://www.healthaffairs.org/content/forefront/policymakers-need-data-budgetary-impact-medicare-advantage-growth

Senate GOP Looking To Change House Budget Reconciliation Bill

Senate Republicans say they’re going to rewrite the 1,116-page budget reconciliation bill the House passed on a tight vote. House Speaker Mike Johnson, R-LA, says the Senate needs to be judicious and make minimal changes to avoid another showdown in the House that could sink the bill. But Senate Majority Leader John Thune, R-SD, said his body will definitely have an imprint on the bill. The Senate is generally far more independent than the House.

The ideological split we saw in the House is now emerging in the Senate. Rightist Rand Paul, R-KY, will vote against the bill given the provision that increases the debt limit dramatically. Conservatives Ron Johnson, R-WI, Rick Scott, R-FL, and Mike Lee, R-UT, argue much deeper cuts need to occur. Johnson says the bill has a $2.2 trillion deficit on average each year and the bill should target greater reductions. This is an increase from a projected deficit in federal fiscal year 2025 of $1.9 trillion. They also want deeper Medicaid cuts and structural changes, such as state matching fund reductions.

On the other hand, moderates and pragmatic conservatives Josh Hawley, R-MO, Susan Collins, R-ME, Lisa Murkowski, R-AK, and Jerry Moran, R-KS, are threatening to oppose Medicaid reforms that would cut benefits. They worry, too, about impacts on state budgets and providers.

As you can see there are at least four votes on each side of the ideological spectrum that could sink the House bill as is in the Senate. At the same time, making changes that all can get on will be a struggle. Last, the Senate may target removal of the state and local taxes (SALT) deduction increase. That would sink any revised bill in the House.

Health Affairs Forefront blog has a good summary of all healthcare provisions in the House version that passed. One area not discussed is the restoration of appropriations for the cost-sharing reductions (CSR) subsidies in the Exchanges. These ended under Trump 45 and actually cost the federal government more in premium subsidies because plans have to offer the CSR plans and must increase base Silver plan premiums dramatically. But those above 250% of federal poverty could see some negative impacts.

Additional articles: https://thehill.com/homenews/senate/5315185-trump-big-beautiful-bill-senate-gop/ and https://www.healthaffairs.org/content/forefront/house-republicans-pass-budget-reconciliation-legislation-s-new-coverage-provisions and https://thehill.com/homenews/senate/5315019-senate-republicans-salt-cap-big-beautiful-bill/?tbref=hp

(Some articles may require a subscription.)

#budgetreconciliation #spending #trump #congress #medicaid #coverage

https://thehill.com/homenews/senate/5316382-these-are-the-changes-senate-republicans-are-eyeing-to-the-gops-big-beautiful-bill/

Reconciliation Bill Already Creating Anxiety In Senate

As the House budget reconciliation bill moves to the Senate, signs are appearing already of a deep ideological divide over the bill. At least two conservatives, Rand Paul, R-KY, and Ron Johnson, R-WI, have questioned whether they will vote for the bill – Paul due to the debt limit provision and Johnson because of too few spending cuts and surging debt.

At the same time, moderates and pragmatic conservatives are pushing for Medicaid reductions to be rolled back. Both Lisa Murkowski, R-AK, and Josh Hawley, R-MO, want Medicaid changes. Susan Collins, R-ME, has also weighed in on Medicaid in the past. There are others, too, who are concerned.

As such, the Senate has too few votes to pass the House version due to opponents on each side.

See my blog today for more details: https://www.healthcarelabyrinth.com/the-budget-rollercoaster-reconciliation-advances-but-big-debate-looms-in-senate/ .

In other news, a Modern Healthcare article outlines all the final Medicaid changes.

Further, another article discusses the possibility but no probability of Medicare sequestration cuts.

Additional articles: https://www.modernhealthcare.com/politics-policy/big-beautiful-bill-medicaid-medicare-pbms and https://www.fiercehealthcare.com/payers/will-trumps-tax-bill-cut-medicare-500b-not-exactly and https://thehill.com/business/budget/5314997-ron-johnson-criticizes-house-gop-bill-says-trump-cant-pressure-him-same-as-house-hardliners/?tbref=hp and https://thehill.com/homenews/senate/5314189-rand-paul-house-gop-budget-bill/?tbref=hp

(Some articles may require a subscription.)

#budgetreconciliation #congress #trump #medicaid #spending #coverage

https://www.modernhealthcare.com/politics-policy/senators-promise-changes-medicaid-cutting-tax-bill

House Passes Reconciliation Bill; On To An Uncertain Fate In Senate

(UPDATED 5/22 AM)

The House threaded the needle and passed the budget reconciliation bill on a tight 215-to-214 vote. Two Republicans voted against the bill, and one voted present to get the bill to pass. The vote was a result of a marathon session and backroom arm-twisting by President Trump, House Speaker Mike Johnson, and other House GOP leaders. President Trump met with the caucus this week and laid down the law, telling moderates to drop their SALT demands (they did to some degree) and conservatives not to “f—” with Medicaid.

The House leaders thread the needle by a mix of further concessions and appealing to party unity. The conservatives wanted additional Medicaid structural changes and accelerated reductions. They were conceded acceleration of work requirements from 2029 to essentially 2027. It is likely impossible for states to do so that quickly.

House moderates cut a deal to further raise the state and local tax (SALT) deduction limit put in place in 2017, but watering down of Medicaid reductions did not occur. The conservatives received some more spending cuts to close the increase in the deficit created by the last-minute SALT change.

Each side was told that was it and they must support the bill given the importance to the GOP and the nation. Further, the president gave commitments to issue additional executive orders to address some spending and Medicaid concerns.

Now the Senate must grapple with passing the bill. It is philosophically opposed to the mammoth nature of the bill. The GOP likely has a solid no vote in deficit hawk Rand Paul of Kentucky. He will hate the deficit impacts. And there are between 5 and 7 moderates or pragmatic conservatives who right now are very concerned about the level of Medicaid cuts. Most can stomach work requirements, but others are concerned about the impact to reimbursement to states and the impact to coverage, especially related to provider tax reform.

The sequestration provisions hidden in the bill could trigger future healthcare cuts beyond what are strictly outlined, including in Medicare.

There is still a long way to go, but the House shockingly got its business done by the self-imposed Memorial Day deadline.

Additional articles: https://thehill.com/homenews/senate/5312796-thune-may-fight-medicaid-cuts/ and https://insidehealthpolicy.com/daily-news/house-gop-meets-wh-over-reconciliation-issues-johnson-strives-wednesday-night-vote and https://www.beckerspayer.com/policy-updates/gop-budget-bill-could-slash-medicare-by-45b-in-2026/ and https://thehill.com/homenews/house/5312712-house-gop-bill-medicare-cuts/ and https://thehill.com/business/5309473-trump-tax-policies-national-debt/?tbref=hp and https://thehill.com/homenews/house/5313019-salt-medicaid-house-republicans-trump-bill/ .

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #medicaid #coverage #spending

https://thehill.com/homenews/house/5313198-house-passes-trump-big-beautiful-bill

HHS Explains MFN Drug Price Approach

The Department of Health and Human Services (HHS) issued guidance regarding President Donald Trump’s recent executive order regarding adopting most favored nation (MFN) drug pricing throughout the country.

If Big Pharma brand drug makers were not worried before, they should be now. An HHS press release laid out expectations for how drug makers will engage with the order. It notes all brand products that do not currently have generic or biosimilar competition across all markets (lines of business) are covered. It says drug companies must “commit to aligning” their U.S. prices with “the lowest price of a set of economic peer countries.” The peer group is the so-called rich nations as represented by the Organization for Economic Co-operation and Development countries and that have a gross domestic product (GDP) per capita of at least 60% of the U.S. GDP.

Big Pharma came out swinging, arguing the order could mean a pullback on planned American investments.

Critics came out again arguing there is no legal basis for the order, although the administration will pursue the policy through an experimental Center for Medicare & Medicaid Innovation (CMMI) model. It will likely face legal challenges.

Notwithstanding all this, Trump made the right move here to finally challenge Big Pharma. My blog on the topic: https://www.healthcarelabyrinth.com/trump-goes-all-out-on-drug-price-reform/ .

Additional articles: https://insidehealthpolicy.com/daily-news/trump-s-mfn-pricing-plan-likely-face-legal-hurdles-despite-cmmi-workaround and https://insidehealthpolicy.com/daily-news/hhs-most-favored-nation-scheme-include-only-brand-name-drugs and https://www.hhs.gov/press-room/cms-mfn-lower-us-drug-prices.html

(Some articles may require a subscription.)

#irp #mfn #drugpricing #trump

https://www.fiercepharma.com/pharma/all-branded-drugs-not-facing-generic-biosimilar-competition-must-abide-mfn-order-all-markets

House Budget Committee Advances Reconciliation Bill

After a high-profile defeat Friday, the House Budget Committee advanced the budget reconciliation bill with $625 billion in Medicaid reductions Sunday night. Four House Freedom conservatives in the GOP caucus voted present to advance the bill, apparently with commitments that changes will be made to the bill.

A prominent conservative, Chip Roy, said work requirements would be accelerated. He also mentioned the need for steeper provider tax cuts and a rollback of the enhanced reimbursement for the Medicaid expansion.

If all House moderates are on the bill now (a big if), they would likely jump off with steeper Medicaid cuts.

Providers and doctors are sounding the alarm on coverage losses, lower state dollars, administrative costs, and red tape.

Health policy group KFF published two briefs: one on the 15 states that would be impacted with lower reimbursement if they maintain undocumented immigrants and the impact on those with unpredictable incomes to proposed changes regarding tax penalties for Exchange subsidies.

Additional articles: https://insidehealthpolicy.com/daily-news/house-budget-moves-reconciliation-bill-rules-medicaid-changes-unclear and https://thehill.com/policy/healthcare/5305058-concerns-rise-over-medical-coverage-losses-from-big-beautiful-bill/?tbref=hp and https://www.kff.org/medicaid/issue-brief/proposed-medicaid-federal-match-penalty-for-states-that-cover-undocumented-immigrants-with-their-own-funds-state-by-state-estimates/ and https://www.kff.org/affordable-care-act/issue-brief/marketplace-enrollees-with-unpredictable-incomes-could-face-bigger-penalties-under-house-reconciliation-bill-provision/ and https://www.fiercehealthcare.com/payers/florida-blues-plan-rebuffed-cms-star-ratings-challenge

(Some articles may require a subscription.)

#trump #congress #budgetreconciliation #medicaid #coverage #spending

https://www.modernhealthcare.com/politics-policy/tax-bill-medicaid-house-budget-committee

Conservative Rebellion On Budget Bill

Conservative House members on the Budget Committee sent shock waves through the Capitol Friday when they stopped advancement of the budget reconciliation bill over a lack of sufficient spending cuts. In some ways, the meltdown could be predicted, but the fact that the five conservatives defied the wishes of the president and leaders showed just how fragile the GOP’s hold on Congress is.

Speaker Mike Johnson already had a huge issue on his hands when it came to moderates from Blue states asking to increase state and local tax reductions. Now, he has the conservatives off the bill, which could then spur more moderate concern if cuts go deeper.

Principally, the conservatives want work requirements to be imposed much earlier than 2029 and to see tighter eligibility in Medicaid. They complain that cuts are backloaded and spending front-loaded. The bill will be discussed behind the scenes this weekend and another vote could happen.

Then you have the Senate GOP, which has major disagreements with the House bill. And in the upper chamber, there are moderates and pragmatic conservatives concerned about Medicaid and other cuts and conservatives who are budget and deficit hawks. Like the House conservatives, the latter want a deficit-neutral bill.

Healthcare policy group KFF has a good analysis of the Medicaid reduction measures in the bill. Most of the reductions come in three broad categories (about $600B of $625B in total reductions over 10 years):

• Mandating that adults who are eligible for Medicaid through the Affordable Care Act (ACA) expansion meet work and reporting requirements ($300.8 billion); and
• Repealing the Biden Administration’s rule simplifying Medicaid eligibility and renewal processes ($162.7 billion); and
• Eligibility redeterminations for expansion group ($49.0 billion); and
• Establishing a moratorium on new or increased provider taxes ($86.8 billion).

KFF also finds $625 billion over 10 years is about 20% of state financed Medicaid per resident. States have unequal impacts and a lot is dependent on how each state responds to the changes and reductions from a policy and budget perspective. KFF says impacts from 6% to 50% per state.

Additional articles: https://insidehealthpolicy.com/daily-news/hardliners-doom-budget-committee-s-first-crack-reconciliation-another-vote-planned-sunday and https://www.nbcnews.com/politics/congress/senate-republicans-put-house-notice-wont-accept-trump-agenda-bill-chan-rcna206705 and https://thehill.com/homenews/house/5304719-trump-agenda-house-republicans/ and https://thehill.com/homenews/house/5304514-these-republicans-voted-against-advancing-trumps-big-beautiful-bill/ and https://www.kff.org/medicaid/issue-brief/state-level-context-for-federal-medicaid-cuts-of-625-billion-and-enrollment-declines-of-10-3-million/

(Some articles require a subscription.)

#budgetreconciliation #medicaid #coverage #spending #trump #congress

https://www.modernhealthcare.com/politics-policy/gop-tax-bill-blocked-medicaid-cuts

Budget Reconciliation Saga

House Freedom Caucus members could sink the budget reconciliation bill coming out of the Budget Committee for lack of enough reductions and weak Medicaid policy changes. Conservatives are pushing for an acceleration of work requirements from the current plan targeted for 2029.

At the same time, moderates are upset with the scope of Medicaid reductions.

House Speaker Mike Johnson also said that the proposed bill would be changed to enhance state and local tax deductions as well as increase Medicaid savings. But the latter could further upset moderates.

The current reductions fall disproportionately on states, which will have to make up hundreds of millions of reimbursement reductions, as well as enrollees, who could lose coverage.

Another controversy is ambiguous language regarding provider taxes. While new provider taxes are barred, it is unclear how long existing taxes would be grandfathered or whether renewing current provider taxes would be permissible.

To refresh on major Medicaid reductions in the bill, the following are in the current proposal:

• Work requirements (starting in 2029)
• Repealing Biden eligibility rules
• Eligibility checks twice a year
• Cost-sharing for Medicaid beneficiaries above 100% of poverty
• Reimbursement penalties for states that provide coverage for undocumented immigrants
• Limits on new provider taxes
• Codify Program Integrity Rule

Affordable Care Act (ACA) changes include:

• Barring most legal immigrants from premium tax credits
• Rescission of the cap on premium repayment

On the positive side, Medicare docs get a rate fix.

Not talked about much is the budget reconciliation bill’s efforts to rebrand Trump’s earlier push to promote individual coverage subsidies known as IHCRA, and expand Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs).

In other news, a good Health Affairs blog explains the rationale behind the Trump administration’s proposed rule to reform the provider tax. I have to say, after reading through it, I do think some reform is needed.

Additional articles: https://www.modernhealthcare.com/politics-policy/medicaid-cuts-provider-taxes-state-budgets and https://www.healthaffairs.org/content/forefront/cms-proposes-limit-provider-taxes and https://thehill.com/homenews/house/5302339-trump-mega-bill-changes/ and https://thehill.com/homenews/5302765-gop-medicaid-work-requirements/?tbref=hp and https://www.beckerspayer.com/policy-updates/an-ichra-rebrand-3-things-to-know/ and https://www.beckerspayer.com/policy-updates/house-gop-pushes-for-big-changes-to-hdhps-hsas/

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #spending #medicaid #aca #obamacare #medicare

https://thehill.com/homenews/house/5302554-trump-gop-tax-thin-ice-budget-committee

Medicaid Cuts Advance In House

After a marathon overnight hearing where lawmakers literally fell asleep in their chairs, the House Energy & Commerce Committee advanced on a party-line vote deep Medicaid spending reductions in the budget reconciliation process. The cuts amount to $624 billion in Medicaid over 10 years. New provider tax bans, cost-sharing for certain populations, and work requirements are some of the largest reductions. Democrats proposed to tackle Medicare Advantage (MA) overpayments instead. They, too, wanted to use savings from President Trump’s recent executive order to reduce drug pricing.

While the reductions advanced, a deep divide is quickly emerging. Moderates and conservatives are still at odds in the House. Conservatives claimed that the reductions are not deep enough, while many moderates could be off the bill due to the existing Medicaid cuts. Some moderates and pragmatic conservatives in the Senate are also concerned about the Medicaid cuts. In the House, enough conservatives and/or moderates exist to tank the bill. The same could be true in the Senate as well. The Senate GOP generally also has taken issue with the broad scope of the entire reconciliation process and could craft its own bill.

In other news, healthcare policy group KFF discusses the impediments to passing deep Medicaid cuts and how that task has only gotten harder with a major expansion of Medicaid, the popularity of the program, and the more-easily-definable fallout on coverage.

As well, the Senate Judiciary Committee appears poised to back major pharmacy benefits manager (PBM) reform after a hearing where major issues were discussed, including the role of the Big 3 PBMs.

Additional articles: https://kffhealthnews.org/news/article/house-budget-bill-medicaid-deja-vu-2017-republican-cuts/ and https://www.healthcaredive.com/news/senate-judiciary-backs-pbm-reform-hearing/747989/ and https://www.modernhealthcare.com/politics-policy/reconciliation-bill-medicaid-cuts-energy-commerce and https://thehill.com/policy/healthcare/5299154-republicans-advance-medicaid-bill-trump-agenda/ and https://thehill.com/homenews/senate/5298819-senate-gop-house-trump-package-medicaid/

(Some articles may require a subscription.)

#medicaid #coverage #budgetreconciliation #medicareadvantage #drugpricing #trump #congress

https://thehill.com/homenews/house/5300149-trump-meditaid-reforms-gop-fight