Parliamentarian rejects Medicaid provisions in ‘big beautiful bill’

Senate Parliamentarian Elizabeth MacDonough struck out against the major Medicaid provisions in the “big beautiful bill,” warning senators that bill’s passage may be at risk.

MacDonough rejected a plan to cap states’ use of health care provider taxes to collect more federal Medicaid funding. This proposal would have generated hundreds of billions of dollars in savings to offset the cost of making President Donald Trump’s corporate tax cuts permanent, according to a Democratic summary of the parliamentarian’s ruling.

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.

The cap on health care provider taxes was projected to save hundreds of billions of dollars over the next 10 years, but it would have forced states to shoulder substantially more of the cost for Medicaid coverage.

The parliamentarian ruled that Sect. 71120 of the bill covering health care provider taxes violates the Byrd Rule, which determines what legislation is eligible to pass the Senate with a simple-majority vote on the budget reconciliation fast track.

Republicans could get around the parliamentarian’s rulings by holding a simple-majority vote on the floor to establish a new precedent, expanding the scope of what is eligible under reconciliation.

They also could try to rewrite the cap on health care provider taxes in a way that meets the parliamentarian’s approval.

But the parliamentarian’s decision appears to be a setback that could delay a vote on the bill.

Other provisions now at risk include several GOP proposals to exclude undocumented residents from Medicaid by withholding federal funds from states that make them eligible for benefits.

The parliamentarian also ruled early Thursday against a Republican proposal to prohibit plans from not getting certain Obamacare payments if they cover abortion. There are 12 states that currently require such coverage and insurers have worried they don’t have enough time to implement the payment change before the start of open enrollment.