Senate Finance Committee releases blueprint for budget bill

The Senate Finance Committee on Monday released its version of the One Big Beautiful Bill Act, which proposed deeper cuts to Medicaid and stricter limits on the provider taxes that states use to finance Medicaid.

Specifically, the Senate version of the bill proposed reducing the allowable use of provider taxes to 3.5% by 2031 in states that have expanded Medicaid under the Affordable Care Act (ACA). The bill also includes a 10% phase down of state directed payments each year until they meet Medicare rates.

In the House bill, provider taxes, which are used by 49 states, would be frozen at current levels, and new approvals would be barred. However, in the Senate version, provider taxes would only be frozen in states that have not expanded Medicaid. Expansion states would see their threshold amount drop by 0.5% each year until it hits 3.5% in 2031.

The Senate bill also adds ED, pediatric, and prenatal care to the list of cost-sharing requirement exemptions in the House bill, which already includes primary care services, mental health, and substance abuse services. The cost-sharing requirements listed in the bill would include co-pays of no more than $35 that are capped at 5% of income.

In addition, while the Senate version of the bill doesn't make significant changes to the House's proposed Medicaid work requirements — which would require people up to age 64 who are without dependents or disabilities to work at least 80 hours a month to maintain Medicaid coverage — it clarifies that only parents with children younger than 15 should be exempt from the national requirements. The House version of the bill said parents of a dependent child would be exempted as would those who already meet the Temporary Assistance for Needy Families program or the Supplemental Nutrition Assistance Program work requirement.

Both versions of the bill also say that Medicaid beneficiaries who live in areas with an unemployment rate of around 8% or 1.5 times the national unemployment rate would also be exempt.

Sen. Josh Hawley (R-Mo.) said the phasing down of provider taxes is surprising and not a good development, especially for rural hospitals in his state.

"I'd invite them to come explain that to the people of Missouri," Hawley said. "We're gonna close your hospitals in rural America so that we can pay for the Green New Deal subsidies that Joe Biden championed. I mean, good Lord."

Sen. Ron Johnson (R-Wis.) said he would oppose the bill if it came to the floor in its current form as it doesn't go far enough to cut the $2.2 trillion annual deficit.

"We're not doing anything to significantly to alter the course of the financial future of this country," Johnson said. "We're not seriously addressing our long-term deficit and debt issues."

(Mills-Gregg, et al., Inside Health Policy [subscription required], 6/16; McAuliff, Modern Healthcare, 6/17; Bolton, The Hill, 6/16)

Federal judge rules that cuts to NIH focused on minority groups are illegal

A federal judge on Monday ruled that some of the Trump administration's cuts to NIH grants are "void and illegal" and accused the government of racial discrimination and prejudice against LGBTQ individuals.

Attorneys representing researchers in several states said the administration's funding cuts were "arbitrary" and specifically singled out cuts affecting people of color, women, and LGBTQ people. Young ordered the government to restore much of the NIH funding for now, pending an appeal.

Young said the government's rationale for canceling some NIH grants, which also supported research into topics like gender identity and equity in healthcare, appeared to be rooted in prejudice. He cited the administration's public efforts to eliminate diversity and equity initiatives from the federal government, as well as its attacks on transgender people.

Young said over the course of his career, which has spanned 40 years since he was appointed by former President Ronald Reagan, he had "never seen government racial discrimination like this" and that he felt duty bound to state his conclusions regarding the government's intent.

HHS said it's exploring all legal options, including filing an appeal and moving to stay the order.

"HHS stands by its decision to end funding for research that prioritized ideological agendas over scientific rigor and meaningful outcomes for the American people," said HHS spokesperson Andrew Nixon in a statement.

If the ruling survives appeal, it could allow researchers to restart work on a variety of subjects, including cancer, diabetes, Alzheimer's disease, and HIV.

(Montague, New York Times, 6/16; Reed/Solis, Axios, 6/17)

In addition, an estimated 150 employees at CDC's National Center for Environmental Health, including people staffing a lab that works on lead poisoning, are being reinstated.

Previously, HHS Secretary Robert F. Kennedy Jr. said that at least 20% of HHS' cuts were "mistakes" and that it was "always the plan" to reinstate some employees.

"Bringing a few hundred people back to work out of thousands fired is a start, but there are still countless programs at CDC that have been cut, which will lead to increased disease and death," said Abby Tighe, one of the founding members of Fired But Fighting, a group of affected CDC workers.

(Stobbe, Associated Press, 6/11; Cirruzzo, STAT+ [subscription required], 6/11)

CBO says budget bill will cost healthcare industry $1T

A recent analysis from the Congressional Budget Office (CBO) of the One Big Beautiful Bill Act concluded that the economic benefits of its tax breaks will ultimately be outweighed by its costs and will cost the healthcare sector $1 trillion.

While cuts to Medicaid, health insurance exchanges, and other programs alongside some economic growth would partially offset the $3.7 trillion price of the bill, CBO said the bill would increase the federal deficit by $2.8 trillion over 10 years.

This latest scoring differs from CBO's previous estimates because it models the broader economic effects of the legislation rather than just its consequences for spending and revenue. The new analysis doesn't say much about the economic impacts on the healthcare sector specifically. However, projections suggest there would be a slight increase in employment among people who would no longer receive Medicaid or food assistance.

(McAuliff, Modern Healthcare, 6/17)

Congressional Democrats introduce bill establishing Medicare 'Part E' public option

Democrats in both the House and Senate have introduced a new bill that would establish a "Part E" in Medicare that would allow people to opt into the program.

The bill, called the Choose Medicare Act, was introduced in the House by Reps. Jimmy Gomez (D-Calif.) and Don Beyer (D-Va.) with Sens. Jeff Merkley (D-Ore.) and Chris Murphy (D-Conn.) introducing a companion bill.

In the bill, Medicare Part E would compete with private insurance and would sustain itself through premiums. Enrollees would be able to sign up through any state or federal insurance marketplace, and any existing subsidies available for ACA plans would also be applicable to Part E coverage. The bill would also allow employers to choose to provide Part E coverage to workers.

In addition, the bill would establish an out-of-pocket cost cap for traditional Medicare and allow the program to negotiate drug prices. Part E coverage would also include consumer protections against surprise medical bills.

"Our bill would give all Americans access to Medicare, one of the most popular and successful healthcare delivery programs in history," Beyer said in a press release. "Allowing employers and the general public the option to choose Medicare would fill many of the gaps in our healthcare system, get more people covered, and make the nation healthier."

(Minemyer, Fierce Healthcare, 6/16)