Senate cuts to the provider tax, a way for states to get more federal funding for their Medicaid programs, along with the House cuts that have been analyzed as leading to at least 11 million fewer people on the Medicaid rolls, will deeply harm the 700-plus rural hospitals already at risk of closure. But that's too narrow a frame. The entire healthcare provider network would come under heavy strain, and possibly collapse.
Health insurers are starting to notify states that tariffs will drive up the premiums they plan to charge individual and small group market enrollees next year.
Rural hospitals across the U.S. — many already hanging by a thread — could take a serious hit if a proposed Medicaid cut in the Senate's domestic spending bill is signed into law. The provision, outlined in the 549-page bill released by the Senate Finance Committee on Monday, would gradually limit states' use of Medicaid's so-called provider tax. Medicaid is jointly funded by the federal government and states. States cover the upfront cost of care and then are reimbursed by the federal government for at least 50%.
Hospital stakeholders were infuriated when Senate Republicans on the Finance Committee released their version of the bill this week. The proposal went even further than the House measure in curtailing the ability of states to impose taxes on providers. States have used those taxes to gain a larger federal Medicaid contribution, which they have then directed back to hospitals with higher reimbursements. The Senate's proposal would lower the amount the 40 states that have expanded Medicaid under Obamacare can levy in provider taxes from 6% to 3.5%. It has hospital lobbyists painting a bleak picture of their financial prospects in a last-ditch effort to change senators' minds.
Fitch Ratings has lowered the outlook for the U.S. Health Insurance sector to 'deteriorating' from 'neutral' and the U.S. non-life personal line sector outlook to 'neutral' from 'improving'. The outlooks for other insurance sub-sectors remain 'neutral'.
President Donald Trump's tax cuts package would increase deficits by $2.8 trillion over the next decade after including other economic effects, according to a fuller analysis of the House-passed measure released Tuesday by the CBO. The report, produced by the nonpartisan CBO and the Joint Committee on Taxation, factors in expected debt service costs and finds that the bill would increase interest rates and boost interest payments on the baseline projection of federal debt by $441 billion.