On June 16th, the Senate Finance Committee published proposed legislative text for their portion of the so-called “One Big Beautiful Bill”, the Republicans’ reconciliation legislative package. This includes versions of most of the health care proposals that were passed by the House.
Notable changes that the Senate proposes include:
- Reducing the limit for allowable health care provider taxes from 6% to 3.5% by 2031, for Medicaid expansion states. This cut would affect the majority of states; as noted by KFF, 38 states had some provider tax over 5.5% in 2024, and this group includes both red and blue Expansion states. Notably, the bill does not seek to repeal New York’s exception to these rules for the HCRA tax system, which may continue so long as HCRA does not change and the enabling federal statute is in place. This change will therefore have a limited effect on New York specifically.
- Phasing down all state-directed payment rates to 100% of Medicare. The House version of the bill allowed existing state-directed payments to be grandfathered in at their current (gross) value. This Senate version would phase down those payments “by 10 percentage points each year” until it reaches 100% of Medicare for Expansion states, or 110% of Medicare for non-Expansion states. In New York, this could be an additional cut each year of about $300 million.
- Removing Medicare physician fee schedule provisions. The House bill would have provided an approximately 1.7% increase to Medicare physician rates next year, but the Senate bill contains essentially no Medicare provisions.
- Removing ICHRA expansion provisions. The Senate bill does not contain the House’s language to incentivize greater participation in ICHRAs.
- Removing the increase to the State and Local Tax (SALT) deductionnegotiated by the House. This is likely to provoke a confrontation with the House’s “SALT Caucus”, a group of representatives who have claimed that increasing the allowable SALT deduction to $40,000 is a red line for them.
A draft summary table of the legislation’s proposed provisions is available here. Please remember that these changed provisions are not final and will likely continue to change as negotiations continue.