Medicaid provision

Senate GOP tax bill would hit politically explosive Medicaid provision

The Finance Committee is due to brief members on its megabill draft text Monday night.

By Meredith Lee Hill, Benjamin Guggenheim and Jordain Carney

Senate Republicans are seeking to ratchet up savings from a politically explosive policy within Medicaid to pay for their megabill, and it’s already setting off shockwaves through Capitol Hill.

The Senate Finance Committee’s forthcoming portion of the party-line tax and spending package would lower the Medicaid provider tax to 3.5%, according to three people with direct knowledge of the legislation who were granted anonymity to discuss it.

That would be a huge departure from the House-passed bill, which put a moratorium on states’ ability to raise their provider tax beyond the current 6%. But, as Senate Republicans are scrambling to notch deeper spending cuts in the filibuster-skirting legislation, the provider tax was one of the few areas they could increase savings while not touching Medicare — another entitlement program GOP lawmakers were briefing flirting with overhauling to find offsets.

Finance Chair Mike Crapo is due to brief senators Monday evening.