Senate GOP proposes to rein in states’ tools to boost Medicaid funding

WASHINGTON — To help pay for President Trump’s tax cuts, the Senate is proposing steeper cuts to Medicaid funding than their House colleagues.

The spending reductions come from clamping down on tactics that states use to boost federal Medicaid funding, according to legislation released Monday by the Senate Finance Committee. The text includes harsher restrictions on Medicaid provider taxes and places stricter limits on programs that states use to boost Medicaid funding to health care providers, known as state-directed payments.

The finance committee, led by Sen. Mike Crapo (R-Idaho), is responsible for the largest portion of the budget reconciliation bill that Republicans are using to make good on Trump’s promise to extend expiring tax cuts and create new ones. The House passed its version of the One Big Beautiful Bill last month, and Senate Republicans are now negotiating it.