Tax bill with Medicaid cuts clears House Budget Committee

Modern Healthcare – Monday, May 19, 2025
By Michael McAuliff 

The sweeping bill of tax and Medicaid cuts that Republicans are trying move through Congress took a step forward late Sunday night as the House Budget Committee reconvened and advanced the measure that had failed Friday.

Five fiscal conservatives had rebelled against passage of the bill, dubbed the One Big Beautiful Bill Act of 2025, in a markup Friday, blocking its passage in hopes of achieving deeper cuts to Medicaid and other programs.

The measure aims to extend tax cuts from the Tax Cuts and Jobs Act of 2017 from President Donald Trump’s first term, as well institute some new tax provision and spending, paid for in part by Medicaid cuts.

All the Republicans on the Budget Committee voted in favor of reopening the vote, and four of the Republican opponents voted ‘present’ to allow it to advance 17-16 Sunday night.

House Budget Committee Chairman Jodey Arrington did not say what changes were being contemplated, but acknowledged much was still in play.

“Deliberations continue to this at this very moment,” Arrington said late Sunday. “They will continue on into the week, and I suspect right up until the time we put this big, beautiful bill on the floor of the House.”

Ranking committee Democrat Brendan Boyle (D-Pa.) protested the lack of information offered on any new provisions, noting “obviously it’s changing back in the back room by the minute.”

Arrington insisted the bill the committee was advancing was the same as Friday’s, but that Republican leaders and the holdouts likely would make changes in a substitute to be offered before the Rules Committee this week.

“I couldn’t tell you what is in flux, what is fixed, what might change or not change,” Arrington said.

Rep. Chip Roy (R-Texas), one of the holdouts, said in a post of the social media platform X that House Speaker Mike Johnson (R-La.) would agree to speeding up cuts to Medicaid, among other changes. He also suggested that steeper cuts to provider taxes and a rollback of Medicaid rates in the Affordable Care Act of 2010 were on the table.

The current bill would cut some $625 billion from Medicaid, with more than half of that coming from work requirements and other tighter eligibility tests starting in 2029. Roy and other right-leaning holdouts want the date moved up to the start of 2027.

“Importantly the bill now will move Medicaid work requirements forward,” Roy said in his X post.

Such a move would likely push the Medicaid cuts to more than $700 billion. Roy said he wants more, though.

“The bill does not yet meet the moment,” Roy posted, saying the measure does not do enough to curb the provider taxes that Roy calls “money laundering” and which states levy on providers to help fund the states’ share of Medicaid costs.

Roy also flagged the 90% Medicaid matching rate states get to fund health insurance for people in the ACA’s Medicaid expansion population as something that needs to be rolled back.

“This all ultimately increases the likelihood of continuing deficits and non-Obamacare-expansion states like Texas expanding in the future,” Roy said.

However, any such steps in Roy’s direction would anger Republicans in swing districts who have said repeatedly they oppose such deep cuts to Medicaid.

Speaker Johnson hopes to pass the bill before the Memorial Day recess, and has warned he will keep the House in session over the holiday if needed.

The next step is for the bill to be presented at the Rules Committee before it is sent to the House floor. Any changes that are agreed to would need to be unveiled there. The time for that meeting was not set, but could come as soon as early Wednesday morning.

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