by Tim Rowan, Editor Emeritus

Medicaid Cuts Update

Senate Parliamentarian Elizabeth MacDonough

The ongoing negotiations in Congress will impact Medicaid and Medicare. There has been little movement from the Senate since we reported on this last week, but here’s what we know now:

When H.R. 1 was passed by the House of Representatives and forwarded to the Senate, it was immediately subjected to scrutiny by the Senate Parliamentarian, Elizabeth MacDonough. The job of the parliamentarian is to ensure that every proposed bill complies with Senate rules. The story of Ms. MacDonough taking her scissors to the “One Big Beautiful Bill” requires more than a little unpacking, but it is a good story.

Problem with Medicaid Cuts: "One Bill"

It appears that the idea to put all of the President’s legislative agenda into a single bill is acceptable in the House, but the Senate has different rules. The Senate forces itself to live under the filibuster system. When the filibuster is evoked, a bill must receive 60 votes to pass, but there is an exception. “Budget Reconciliation” is a rule that allows expedited passage of certain specific budget-related bills with only a simple majority, 51 votes.

The problem of the week is that H.R. 1 includes dozens of provisions that have nothing to do with spending. The Senate parliamentarian took her scissors to parts of the bill that:

change environmental regulations to pave the way to sell public lands
reduce the ability of federal judges to block Presidential orders¹
dissolve the Consumer Financial Protection Bureau
change the rules about who can be excluded from receiving Medicare benefits, even after contributing through FICA taxes

Cutting Medicaid Cuts

Parliamentarian MacDonough has also applied her scissors to the portion of the bill that would reduce Medicaid spending by nearly $800 billion over ten years. Writing for The Hill, Alexander Bolton reported on June 26:

“The Senate’s referee rejected a plan to cap states’ use of health care provider taxes to collect more federal Medicaid funding, a proposal that would have generated hundreds of billions of dollars in savings… The decision could force Senate Majority Leader John Thune (R-S.D.) to reconsider his plan to bring the Senate bill up for a vote this week.”

Alexander Bolton

Journalist, The Hill

The provision, which would have forced states to take over substantially more Medicaid costs, came under strong bipartisan opposition. Sen. Josh Hawley (R-Mo.), Susan Collins (R-Maine), Lisa Murkowski (R-Alaska) and Jerry Moran (R-Kan.) warned deep cuts to federal Medicaid spending could cause dozens of rural hospitals in their states to close. Senate Democrats, led by Jeff Merkley (D-Ore.), the ranking Democratic on the Senate Budget Committee, praised MacDonough’s exclusions.

The Hill reported, “Democrats are fighting back against Republicans’ plans to gut Medicaid, dismantle the Affordable Care Act, and kick kids, veterans, seniors, and folks with disabilities off of their health insurance – all to fund tax breaks for billionaires,” Merkley said in a statement.

The President pushed back against the parliamentarian’s rulings in a June 24 social media post:

“To my friends in the Senate, lock yourself in a room if you must, don’t go home, and GET THE DEAL DONE THIS WEEK. Work with the House so they can pick it up, and pass it, IMMEDIATELY. NO ONE GOES ON VACATION UNTIL IT’S DONE.”

Donald Trump

President of the United States

Sorting out the Complex Immigration Question

If the above seems complicated, it becomes rudimentary compared to the background that sets the stage for the parliamentarian’s next cut. Except for emergencies, most often crisis pregnancies, persons in the country illegally cannot, and do not, receive Medicaid-reimbursed healthcare. According to a study by Kaiser Family Foundation, however, fourteen states plus the District of Columbia use state taxpayer money, not federal funds, to cover children regardless of immigration status, Seven of those fourteen, and D.C., also cover some adults with state funds regardless of immigration status.

In the bill was a provision to punish these fourteen states and D.C. by reducing their federal Medicaid payments from 90 percent to 80 percent. Though there is no accusation in the bill that these states are guilty of improper use of federal funds, the states will lose some of those funds because of the way they have chosen to use their own funds. Parliamentarian MacDonough said that is not a budget line item but an attempt by the federal government to force states to change their own healthcare policies.

Medicare Restrictions also Scrapped

Almost as a postscript, a House restriction on Medicare eligibility also fell victim to the Senate Parliamentarian’s scissors. Non-citizens who work in W-2 wage jobs pay FICA taxes, many of them for 30 years or more. When these workers turn 65, they are eligible for Medicare benefits due to their contributions, regardless of their status. Though H.R. 1, the House version, would eliminate that eligibility, Ms. MacDonough said, “Nope, this is not a budget reconciliation issue.”

Although the White House is pressuring Senators to vote quickly — so that a joint House/Senate negotiating committee can hammer out differences and send their compromise version to the President’s desk by July 4 — that self-imposed deadline is up in the air at the moment. Both President Trump and House Speaker Johnson are adamant that every spending and every non-budgetary policy change they want must be enacted in one big bill. In spite of Ms. MacDonough’s cuts, the Senate it not exactly handcuffed either. Because it makes its own rules, Senators could simply decide, with a 51-49 party-line vote, to ignore the parliamentarian.

The power, as well as the future health of Medicaid, falls into the hands of the four dissenting Republican Senators. Home Health and Home Care folks in Missouri, Maine, Alaska and Kansas take note.

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¹ From White House correspondent Bart Jansen, writing for USA Today:

Currently, judges have discretion to set bonds on plaintiffs who file civil suits. Legal experts say judges often waive bonds in lawsuits against the government because the disputes are typically over policy rather than money.
A provision in the House-passed version of the bill would remove that discretion from federal judges and require litigants to post a bond when the issue under consideration is whether to block a Trump policy.
So far, judges have blocked Trump policies in 180 cases. All of them would have to be reviewed for bonds if the Senate approves the House provision and Trump signs it into law.
The law would effectively kill most of the limitations on Trump policies because bond amounts are determined by the dollar amount of the contested policy. In federal cases involving massive policy changes, those bonds can amount to hundreds of billions.

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Tim Rowan is a 30-year home care technology consultant who co-founded and served as Editor and principal writer of this publication for 25 years. He continues to occasionally contribute news and analysis articles under The Rowan Report’s new ownership. He also continues to work part-time as a Home Care recruiting and retention consultant. More information: RowanResources.com
Tim@RowanResources.com

©2025 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in The Rowan Report. One copy may be printed for personal use: further reproduction by permission only. editor@therowanreport.com

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