Republican efforts to limit taxes on hospitals, health plans and other providers that States use to finance their Medicaid programs can rid them of dozens of billions of dollars. The move can reduce access to health care for some of the poorest and most vulnerable people in the country, warning analysts, proponents of patients and democratic political leaders.
No state has more to lose than California, whose medicaid program, called Medi-Cal, covers nearly 15 million low-income inhabitants and a disability. That is twice as much as New York and three times as much as Texas.
A proposed rule By the Centers for Medicare & Medicaid Services, reflected in the Republican House reconciliation account In addition to a more drastic Senate Act, the federal dollars would considerably limit many states in matching funds of what is known as provider taxes. Although it is unclear how many states can lose, the income for grabbing is great. California, for example, has delivered an estimated $ 8.8 billion this financial year due to its tax on its tax managed care plans And last year recorded around $ 5.9 billion from hospitals.
Californian Democrats are already confronted with a $ 12 billion deficitAnd they have drawn political fire to scaling back an important health care policy, including Full Medi-Cal coverage For immigrants without permanent legal status. And a loss of providers tax revenues could add billions to the current deficit, forcing the state legislators to make even more unpopular cutbacks for the benefits of Medi-Cal.
“If the Republicans help this extreme Maga proposal ahead, millions will lose cover, hospitals will close and can collapse safety,” said Gov. Gavin Newsom, a Democrat, in a statement, referring to the “Make America Great Again” movement by President Donald Trump.
The proposals also pose a threat Position 35A ballot initiative California voters approved last November to make the tax on managed care organizations or MCOs permanent and to dedicate part of the proceeds to increasing the wages of doctors and other providers who treat Medi-Kal patients.
All states except Alaska have at least one supplier tax on managed care plans, hospitals, nursing homes, emergency land transport or Other types From health care companies. The federal government spends billions of dollars a year matching these taxes, which generally leads to more money for providers, which helps them to balance a lower Medicaid allowance rates, while states can protect against economic decline and budget restrictions.
New York, Massachusetts and Michigan would also be one of the states that are hit hard by the Ride of the Republicans to scale the tax on Backer’s provider, allowing states to encourage their share in Medicaid to receive raised federal medicaid funds.
In a statement of 12 May announcing the proposed rule, CMS described a “Maas in the law” as “Money laundering“And said that California had funded coverage for more than 1.6 million” illegal immigrants “with the proceeds from his MCO tax. CMS said his proposal would save more than $ 30 billion in five years.
“This proposed rule stops the Shell game and ensures that federal medicaid dollars go where they are most needed -to pay for health care for vulnerable Americans trust this program, not to close the budget holes of the state or bankroll benefits for non -citizens,” said Mehmet Oz, the CMS manager, said in the statement.
Medicaid allows coverage for non -citizens who are legally present and have been in the country for at least five years. And California uses state money to pay for almost all Medi-Cal coverage for immigrants who are not legally in the country.
California, New York, Michigan and Massachusetts together account for more than 95% of the “federal taxpayer losses” of the Maas in taxes in the provider, CMS said. But almost every state would feel any impact, especially under the provisions in the reconciliation law, which are more restrictive than the CMS proposal.
Nothing is a foregone conclusion. The CMS proposal, published on May 15, has not yet been assumed, while negotiations must be made in one on the bills of the house and the Senate and must be assumed by both rooms of the congress. But the limitations that are being considered would be overrun.
A report By the Ministry of Health and Human Services by Michigan, ordered by Democratic Gov. Gretchen Whitmer, discovered that a reduction in the income from the hospital tax of the state “Hospital finances could destabilize, in particular in national and safety net facilities, and could increase the risk of service omitations or closures.” Losing income from the State’s MCO tax “would probably require substantial reductions, tax increases or reductions in coverage and access to care,” said it.
CMS refused to respond to questions about the proposed rule.
The House of Republicans House Silvered Reconciliation, although not the CMS proposal, also prohibits new taxes or increases the existing provider. The senate version, released on 16 June, would gradually reduce the permitted amount of many tax taxes.
The American Hospital Association, which represents nearly 5,000 hospitals and health systems throughout the country, said the proposed moratorium on new or increased provider taxes could force states “To make considerable cuts to balance their budgets, including reducing suitability, eliminating or limiting benefits and reducing the low payment rates for providers.”
Because the taxes of the provider draw matching federal dollars, Washington has a say in how they are implemented. And the Republicans who run the federal government want to spend much less of those dollars.
In California, the insurers who pay the MCO tax are reimbursed for the part of their Medi-Cal registration. This helps explain why the tax rate for Medi-Cal registration is greatly higher than with commercial registration. More than 99% of the tax money that the insurers pay comes from their Medi-Cal-Business, which means that most of the state insurers come back almost all taxes they pay.
That imbalance, which CMS describes as a Maas in the law, is one of the most important things that Republicans are trying to change. If the CMS rule or the corresponding provisions in the bill of the house were to be established, states would be obliged to levy provider taxes equally on Medicaid and commercial companies to attract federal dollars.
California would probably not be able to increase the commercial rates to the level of the Medi-Cal, because the state law limits the assets of the legislative power to do this. The only way to meet the rule would be to reduce the tax rate for Medi-Cal registration, which would greatly reduce income.
CMS has warned California and other states for many years, also under the Biden administration, which considered important changes to MCO and other taxes from the provider. Those warnings have never been realized. But the risk can be greater this time, some observers say because the efforts to reduce taxes is embedded in both Republican reconciliation accounts and intertwined with a broader Republican strategy – and a series of proposals – to Medicaid -cut out With $ 800 billion or more.
“All these proposals move in the same direction: fewer people registered, less generous medicaid programs over time,” said Edwin Park, a research professional at the McCourt School of Public Policy of Georgetown University.
California’s MCO tax is expected to resolve the next two tax years of California $ 13.9 billion, According to estimates of January. The state tax of the State is expected to yield an estimated $ 9 billion this year, strong from last year, according to the Department of Health Care Services, that Medi-Cal runs.
Losing a significant part of that income in addition to other Medicaid-deployment in the bill in the house “all adding to potentially a super serious impact on Medi-Cal and the state budget in California,” said Kayla Kitson, a Senior Policy Fellow at the California Budget & Policy Center.
And it’s not just California who will feel the pain.
“All states will be hurt by this,” said Park.
This article is produced by KFF Health Newsthat publishes California Healthlinean editorial independent service of the California Health Care Foundation.
KFF Health News is a National Newsroom that produces in-depth journalism on health problems and one of the core activities of KFF is-a independent source of research, polling and journalism of health policy. Read more about Kff.
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