U.S. Sen. Mike Crapo (R-ID), chairman of a Senate Finance Committee hearing on U.S. President Donald Trump's budget request for the Department of Treasury is seen on Capitol Hill in Washington, D.C., U.S., June 12, 2025. REUTERS/Nathan Howard
Senate Republicans sent "shockwaves" through Capitol Hill as they eyed a massive change Monday on a "politically explosive policy within Medicaid" to pay for President Donald Trump's so-called "big, beautiful bill," according to Politico.
The Senate Finance Committee has been working on the 2026 budget bill, and a new provision they've developed will further target Medicaid. Politico cited three sources with knowledge of the legislation that the Finance Republicans would brief their colleagues Monday night, which "would lower the Medicaid provider tax to 3.5 percent."
The measure would be a "huge" change from what the House passed, the report said about Trump's megabill. It "would put a moratorium on states’ ability to raise their provider tax beyond the current 6%."
There is already pushback from some Republican senators against the significant cuts to Medicaid. Others are concerned that this new provision would negatively impact rural hospitals.
"Republicans are expecting the forthcoming Medicaid language will have to be further negotiated," said Politico.
The idea is part of an ongoing effort by Senate Republicans to identify additional cuts to the bill to reduce the amount it adds to the deficit.
The Congressional Budget Office scored the bill a few weeks ago, saying that in its current form, it would add nearly $2.4 trillion to the national debt.
A "provider tax" is one area where some lawmakers believe they can impact savings, "while not touching Medicare."