Summary of Senate-Specific Revisions (as of June 17, 2025)
The Senate Finance Committee’s draft introduces several changes to the House-passed Budget Reconciliation Bill. These changes affect Medicaid, the Affordable Care Act (ACA), and other federal health care programs. The summary below reflects new or revised provisions in the Senate text, including removed or dropped policies.
Medicaid-Related Changes
Provider Tax Threshold Lowered: Reduces the allowable Medicaid provider tax threshold from 6% to 3.5% (excluding nursing homes and intermediate care facilities), resulting in lower federal matching funds and potentially reduced hospital payments.
State-Directed Payment Adjustments: Scales back existing Medicaid payment arrangements by capping rates at 100% of Medicare for expansion states, 110% for non-expansion states, and 150% for rural providers. Requires states to phase down current payments to meet these levels.
Family Planning Provider Funding Restrictions: Lowers the federal threshold for excluding certain family planning providers from Medicaid, which could impact access to services such as cancer screenings and reproductive health care.
Expanded Work Reporting Requirements: Extends Medicaid work-related requirements to parents of children over age 14 and makes technical implementation changes. These changes could lead to eligible individuals losing coverage.
Emergency Medicaid Matching Funds Reduced: Lowers the federal match for life-saving emergency Medicaid for individuals excluded due to immigration status.
Clarification on Immigration Penalties: Specifies that the penalties apply only to state-funded coverage for undocumented adults, not to coverage for lawfully present immigrants.
Retroactive Coverage Limitations Expanded: Applies limitations on retroactive Medicaid coverage more broadly, affecting older adults and people with disabilities.
Affordable Care Act (ACA)–Related Changes
Verification Requirements Retained: Keeps House-passed provisions that introduce new eligibility and enrollment verification rules, which may create administrative barriers to ACA Marketplace enrollment and retention.
State Marketplace Constraints: Retains restrictions that could limit state autonomy in operating ACA Marketplaces, which may lead to instability or closure in some state-run systems.
Premium Increases and Reproductive Coverage Restrictions: The Senate HELP title (combined with Finance) includes provisions that may increase Marketplace premiums and limit access to reproductive health coverage.
Premium Tax Credits Not Extended: The bill does not extend enhanced ACA premium tax credits, which may result in coverage loss for Marketplace enrollees who rely on subsidies.
Policies Removed or Dropped in Senate Version
- Expansion of Health Savings Accounts (HSAs), including 10 policies totaling $41 billion in cost.
- Rare disease (“orphan”) drug exemption from Medicare drug price negotiations.
- Pharmacy Benefit Manager (PBM) reforms to increase transparency and prohibit price-based compensation in Medicare Part D.
- Increased Medicare payments for physicians (previously created a future payment cliff).
- Medicare funding for contracts with Artificial Intelligence (AI) vendors.
- Delay in Medicaid Disproportionate Share Hospital (DSH) payment reductions.
- Medicaid/CHIP out-of-state care access for children.
- Codification of CHOICE Arrangements and changes to Individual Coverage Health Reimbursement Arrangements (ICHRAs).
- Expansion of rural hospital conversions to Rural Emergency Hospitals (REHs).
