Senate GOP Proposes Deeper Medicaid Cuts, Caps Provider Taxes

Senate Republicans have proposed legislation to fund President Trump's domestic policy agenda and extend his first-term tax cuts that includes deeper cuts to Medicaid than those in the House-passed bill. The Senate bill seeks to cap Medicaid provider taxes at 3.5 percent by 2031 for states that expanded Medicaid, with phased reductions starting in 2027, while freezing rates in non-expansion states and tightening eligibility requirements. These changes aim to limit states' use of tactics like state-directed payments and provider taxes that inflate federal Medicaid spending, but critics warn the cuts could reduce access to healthcare for low-income Americans and threaten rural hospitals. The Senate's version of the budget reconciliation package, dubbed the "One Big Beautiful Bill," also raises the debt ceiling by $5 trillion and makes permanent Trump's tax cuts, sparking internal GOP tensions due to concerns over the Medicaid reductions' impact. Republican senators from several states have publicly expressed worries about the cuts, complicating efforts to secure enough votes to pass the bill. The legislation also includes significant increases in border security and defense spending as part of Trump's broader policy priorities.