Politico reports that Senate Republican leaders have proposed a $15 billion stabilization fund aimed at supporting rural hospitals that could be adversely affected by upcoming changes to Medicaid in a sweeping domestic policy package. The proposal, shared in a memo to Senate offices and confirmed by insiders, is part of a broader effort to appease GOP senators from states that rely heavily on provider taxes to fund their Medicaid programs. Many of these senators have raised alarms that the proposed rollback of state provider taxes would disproportionately harm rural healthcare systems.
While the inclusion of the fund has been confirmed in closed-door meetings, the $15 billion figure is being described as a preliminary offer likely to evolve during ongoing negotiations. Senators Josh Hawley (R-Missouri) and Susan Collins (R-Maine), among others, have voiced skepticism that the proposed amount will be sufficient to offset the financial impact on rural hospitals. Senator Thom Tillis (R-North Carolina) has also circulated data showing that projected state-level losses from the provider tax change could exceed the current fund proposal, signaling that more intense bargaining lies ahead as GOP leaders try to secure broader support within their caucus.
The bill may be voted on by the Senate this week.
Senator Hawley is strongly urging Senate leadership to revise its proposed Medicaid changes and align more closely with the House’s framework, particularly its decision to freeze the provider tax at 6%. Alarmed that the Senate version goes further than the House in cutting Medicaid, Hawley has warned that the current bill risks collapsing entirely if it cannot pass the House. He supports maintaining a rural hospital fund but is adamant about scrapping the Senate’s gradual reduction of the provider tax to 3.5%, arguing that the dual approach of preserving provider tax levels and establishing the fund is both feasible and necessary. Frustrated by the Senate’s direction, Hawley has voiced confidence in Senate Majority Leader John Thune’s (R-South Dakota) leadership but insists the bill must be significantly changed, predicting that it will not reach the floor in its current form.
Read the Politico article here.