Legislative text that the House Energy & Commerce Committee released for its section of the House’s budget reconciliation package calls for substantial cuts to Medicaid cuts and will have additional impacts on health care.

 The Committee is scheduled to mark up the legislation today and aims to have the full House vote on it before the end of the month.

 Proposed extensive changes to the Medicaid program include:

·     Stopping Abusive Financing Practices: This includes freezing state provider tax rates and prohibiting the imposition of new taxes; restricting state-directed payments to no more than the published Medicare payment rates for the same services; sunsetting the 5% enhanced Federal Medical Assistance Percentage (FMAP) for new expansion states established under the American Rescue Plan Act; modification of the definition of “generally redistributive” in healthcare-related taxes and imposition of penalties for noncompliance; and a requirement for budget neutrality certification for Section 1115 demonstration waivers.

·     Reducing Fraud and Improving Enrollment Processes: Under this provision, a moratorium will go into effect until Jan. 1, 2035, on the following: implementation of rules on streamlining enrollment into the Medicaid and Medicare Savings Program; enactment of the Centers for Medicare and Medicaid Services' (CMS') rule on streamlining enrollment for Medicaid, the Children's Health Insurance Program (CHIP) and the Basic Health Program; requirement for states to conduct monthly checks to disenroll providers who have been terminated by the U.S. Department of Health and Human Services (HHS) or another state; requirement for Medicaid eligibility redeterminations every six months for expansion adults (currently every 12 months) and other measures enacting to eliminate fraud.

·     Immigration-Related Restrictions: These include prohibition of federal financial participation for individuals whose citizenship, nationality or immigration status has not been verified and reducing FMAP by 10% for expansion states that provide Medicaid or state-based coverage to undocumented immigrants.

·     Preventing Wasteful Spending: A moratorium would be in effect until Jan. 1, 2035, on the CMS rule related to long-term care staffing standards and institutional payment transparency; limitation of retroactive Medicaid eligibility to one month prior to each individual’s application (currently three months); barring of federal Medicaid and CHIP funding for gender-transition procedures for minors; and prohibition of Medicaid payments to nonprofit providers that primarily engage in family planning or reproductive health services, including abortion services.

·     Increasing Personal Accountability: These provisions include a requirement for states to implement work/community service requirements for able-bodied adults without dependents; set a minimum requirement of 80 hours per month of employment, job training, volunteer service, or education; mandate cost-sharing for expansion adults earning above 100% of the federal poverty level; set a maximum of $35 per service (reduced from $100) for applicable cost-sharing, among other measures.

·     Affordable Care Act (ACA) Provisions: These include strengthening eligibility and income verification processes for ACA marketplace enrollment; eliminating income-based special enrollment periods in federal and state ACA exchanges; prohibiting coverage of gender-transition procedures as essential health benefits; and allowing insurers to require payment of past-due premiums before activating new coverage.

In other provisions, the committee text delays scheduled reductions in Medicaid Disproportionate Share Hospital (DSH) payments from FY 2026–2028 to FY 2029–2031.

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