Republican senators’ proposed Medicaid cuts threaten to send red states ‘backwards’ | Medicaid

Defenders urge the Republicans in the Senate to reject a proposal to reduce billions of American health care to extend tax alternatives that mainly benefit rich and companies.

The proposal would carry out historic cups in Medicaid, the public health insurance program for low -income and disabled people who cover 71 million Americans, and is the version of the Senate of the law on “Big Beautiful Bill”, which contains most of the Donald Trump legislative program.

“With the text published earlier this week, the Senate aggravated the” Big Budget Bill “of the Chamber in many ways in many ways,” said Anthony Wright, Executive Director of Families USA, a group for the defense of consumer health care, during a press call.

The version of the Senate leads to deeper discounts for Medicaid and the so -called Obamacare plans (affordable Care Act), “both by widening paperwork requirements and making it more difficult for states to finance the coverage of Medicaid to their residents,” Wright said.

If it is adopted, the disputed bill would have already made Medicaid’s biggest reductions since the promulgation of the program in 1965. With administrative formalities and an expiration of additional grants on health care in Obamacare, the Congressional Budget Office (CBO) estimated that the version of the Chamber would leave 16 million people without health insurance by 2034.

The CBO has not yet published any estimates or “rated”, the impact of the Senate proposal, but the defenders and experts said that the cuts are more draconian, “punish” the states that have expanded Medicaid and attack Medicaid by continuing its Byzantine financing structures.

“If we examine the situation as a whole of our health system, this is where the ineffectures are – not in Medicaid – but in all groups taking advantage of the system,” said David Machledt, analyst of senior policies in the national health law program, referring to the repercussions with the statements of the Republicans according to which they target “waste, fraud and abuse”.

“What these cuts will do is watch the most profitable program and press it more, and take us back, and get back into a system where people from the low -end literally die to finance these tax reductions for rich and businesses.”

A recent study revealed that the expansion of Medicaid, as was done during the Obama administration, probably saved 27,400 additional lives over a period of 12 years, and did it cheaper than other insurance programs. The same study has revealed that about a quarter of the difference in life expectancy between low and high income Americans is due to the lack of health insurance.

The Republicans, like Senator John Thune of the southern Dakota, argue that their bill “protects” Medicaid by “removing people who should not be on roles”, including adults of the working age, legal and undocumented immigrants; By adding work requirements and pursuing a tax maneuver, states have used to provide more Federal Medicaid funding.

“The suppression of these individuals is simply basic, good governance,” said Thune.

But experts and defenders argue that the cuts will remove not only targeted individuals, including many who work but have trouble crossing administrative formalities, but will also place states in impossible situations with potentially multi-mini-billion deficits in their budgets.

The two versions contain so -called work requirements, which analyzes show that people will lose coverage even if they are eligible, experts said. Instead, the greatest difference between the versions of the Senate and the Bill Chamber is the attack on the Senate against the complex funding funding agreements of Medicaid.

Medicaid is financed jointly by the States and the federal government, which simultaneously makes one of the most important expenses and sources of income. The version of the Senate specifically attacks two ways of which the statements finance Medicaid, through the taxes of suppliers and payments led by the State.

With a service tax, states report additional federal income by increasing payments to suppliers. Since the federal part of Medicaid is based on a percentage rate, the increase in payments to providers in turn increases the amount that federal officials pay in the state. States then tax these same suppliers, such as hospitals, to bring funding to the state.

Although this maneuver has been criticized, it has also been used for decades. It is in place in each state, except Alaska, is legal and openly discussed. The Senate bill caps this manueer by reducing the tax rate by about half, from 6% to 3.5%, according to Machledt.

In an analysis in 2024, the Congressional Research Service estimated that the reduction of the tax ceiling of the supplier to 2.5% would effectively reduce $ 241 billion in Medicaid payments to the States. Although the exact impacts of the Senate tax ceiling are not yet known, Machledt expects it to be in the billions, whether the states would then be under pressure to catch up.

“We took a lot of trouble to close a deficit of $ 1.1 billion caused by the rise in health costs,” said the treasurer of the state of Colorado, Dave Young, during a press call. “To protect health care and education, we had to reduce transport projects, maternal health programs and even $ 1 million in food banks.”

Due to the tax provisions in the constitution of the State of Colorado, Young said: “It will be almost impossible to increase taxes or borrow money to compensate for the difference.”

Likewise, the Senate bill will after “payments led by the State”. To understand the payments led by the State, it is useful to understand a global and often hidden aspect of American health care – health insurance pays different providers for the same service.

Providers are almost universally paid the worst to treat patients who have Medicaid. Medicare pays roughly the cost of providing care, although many doctors and hospitals complain that it is still too little. Commercial insurance pays most generously doctors and hospitals.

To encourage more providers to accept Medicaid, the legislators of certain states have chosen to pay providers dealing with Medicaid patients. In Virginia-Western, a plan approved by the federal government allows the state to pay suppliers more for certain populations. In Northern Carolina, state -run payments allow the State to pay rates of hospitals equal to the average commercial insurance rate, if they accept the provisions for the delivery of medical debts.

The first state -managed payment plan was approved in 2018, under the first Trump administration. These types of payments were criticized by the Office of the Government of responsibility during the Biden administration.

However, the Senate bill goes after these rates by linking them to the expansion of Medicaid – a central principle of Obamacare – and gives more strict limits to the 41 states that have extended the program. This will actually be “punishing them,” said Machledt, referring to the states that participated in this main provision of Obamacare, “by limiting the way they can finance”.

The defenders also warned against the effects of involuntary inability of these huge disruptions. The funding for medical debt is already preparing new arguments for hospitals. Even people who do not lose their insurance and are not provided by Medicaid could see prices increase.

When Medicaid is cut, hospital emergency rooms are always forced to provide stabilizing care to patients, even if they cannot pay. Hospitals must then compensate for this deficit somewhere, and the only payers with which they can negotiate are commercial: for example, private health insurance on which the United States counts.

“People who do not lose their health insurance will see increased costs,” said Leslie Frane, executive vice-president of Seiu, a union which represents around 2 million members, including in health care. “Your Copays will go up, your deductibles will increase, your bills will go up.”

The Republicans hope to adopt the bill on July 4.