Update on Budget Reconciliation

Recently, the U.S. Senate Finance Committee released their budget reconciliation language to be included in the larger Senate reconciliation package. In addition to providing and extending various tax proposals, the language includes several measures to reduce federal spending towards states’ Medicaid programs.

HCAOA is disappointed the Senate Finance package does not include HCAOA’s tax priorities as outlined in our 5/28/25 Newsletter (embed link). HCAOA will continue to advocate for bipartisan financial relief policies to support caregiving families and home care workforce issues.
 
The Senate Finance provisions made steeper cuts to Medicaid than the U.S. House passed legislation that estimated a $625 billion cut to Medicaid. The Senate provisions included, but are not limited to:

• A change in the provider tax percentage cap for states that expanded Medicaid under the Affordable Care Act. The Senate language incrementally changes the provider tax for certain providers from a 6% cap to 3.5% cap by 2031.
• The Senate also proposed changes to state directed payments. The language would direct the Secretary to revise the payment limit, reducing it from average commercial rate to 110% (expansion states) or 100% (non-expansion states) of the Medicare payment rate. Existing state directed payment limits would be reduced by 10% annually until the applicable rate is reached.

 
Senate Leadership has expressed a desire to vote on the legislation by the July 4th Congressional Recess. Some Senators have expressed reservations to parts of the language. HCAOA will continue to monitor the progress of the bill and continue to advocate for HCAOA positions. Please reference the 5/28/25 HCAOA update as well. If you have any questions, please reach out to us at [email protected]