February 27, 2025

What comes to mind as I read the story below is (obviously) the MCO Tax NYS was recently approved (by CMS) to implement. It is, at base, a ‘provider’ tax

(in this case the provider is the health plan) but in the past NYS has tried to tax other entities including hospitals, in order to generate a federal match. Anticipated revenue for NYS

from the MCO Tax is close to 4B over 3 years although Bill Hammond from the Empire Center released a report recently that challenged that number, stating it’s more like

$1.4B over 3 years. And of course, he characterized the MCO Tax as a scheme, and one that the federal government was likely to try to close as soon as possible.

Republicans say states are pulling a fast one on Medicaid

GOP lawmakers are considering a plan to limit federal matching funds for the health insurance program to pay for tax cuts.

By Robert King | 02/27/2025 04:22 PM EST

Republicans in Congress see a way around the $880 billion budget shortfall they need to fill to extend President Donald Trump’s tax cuts set to expire at the end of the year.

States aren’t going to like it.

To qualify for federal Medicaid dollars, states must also kick in their own matching funds. GOP lawmakers want to stop states from taxing insurers and health care providers to raise that money, a maneuver that would leave states with a $612 billion hole in their budgets over the next decade.

Republican leaders, who are under pressure from some of their rank and file to protect Medicaid, say getting rid of the taxes would not be a funding cut, but elimination of a loophole. They argue that states are inflating Medicaid costs because they kick back the taxes to providers and insurers through higher payment rates — and also sometimes spend the money on items unrelated to Medicaid.

“States and providers scheme so that the provider gets an enormous flow of federal dollars with no state cost exposure,” said Brian Blase, who served in President Donald Trump’s first administration and has pitched restrictions on the state taxes at his think tank, the Paragon Health Institute.

House Energy and Commerce Chair Brett Guthrie (R-Ky.), who’s in charge of finding the $880 billion in savings by the time Republicans plan to vote on their budget bill in April, told POLITICO that he’s looking closely at the state taxes.

The levies became even more of a target after Speaker Mike Johnson said Congress would not use two other methods the GOP had considered to raise revenue: imposing caps on federal payments based on Medicaid enrollment in states or reducing the percentage of state spending the federal government matches.

Medicaid is funded jointly by states and the federal government. States can draw upon a variety of funding sources, including their general funds. States have used the provider taxes to juice their federal matching funds since the mid-1980s.

Barring states from drawing federal matching funds for the taxes would hit red and blue states. Every state except for Alaska levies provider taxes.

Republicans are already getting pushback.

Last week, New Jersey Gov. Phil Murphy, a Democrat, released a report detailing the potential blow to his state’s budget if Republicans cut funding to the states, including by restricting matching funds for provider taxes.

“It’s crucial for stakeholders, advocates, policymakers, and recipients to fully understand the potential repercussions on health care and services if these proposals are enacted into law,” said Sarah Adelman, New Jersey’s human services commissioner, in a statement to POLITICO. “We urge Congressional leaders to protect the integrity of Medicaid and uphold the commitment to those who rely on it every day.”

Advocates for Medicaid patients say Republicans are wrong to call the taxes abusive.

“This is just an attempt to cut a critical source of state share that states use by inaccurately calling it money laundering to disguise a cut to Medicaid,” said Joan Alker, executive director and co-founder of the Center for Children and Families at Georgetown University, during a media briefing on Tuesday.

And hospitals, which pay the taxes and are also speaking out forcefully against Medicaid cuts, say the taxes help boost the quality of care and access to it.

“States would have to make difficult decisions about how to fill the gaps, including raising taxes on residents, reducing eligibility for some Medicaid populations such as children, elderly, or disabled individuals, or reducing Medicaid benefits,” said the American Hospital Association in a statement.

But the reason hospitals don’t mind paying the taxes, Republicans say, is because states are manipulating the way federal matching funds are set to increase payment rates to providers — essentially directing the taxes back to them.

In 2022, 27 percent of states’ Medicaid share was funded by outside sources like provider taxes, according to an analysis from the National Association of State Budget Officers. A state can also rely on contributions from local governments to help cover its share of Medicaid funding.

The federal government pays its share of Medicaid funding based on a matching rate — covering a minimum of 50 percent of states’ Medicaid costs.

Republicans have yet to detail how they might set limits on state taxes.

There already are several restrictions on them. A state can only tax up to 6 percent of a provider’s revenue and has to levy the tax on providers who both do and do not participate in Medicaid.

The House Budget Committee earlier this year released a list of programs that could be subject to cuts in the upcoming budget bill. One of the proposals was to phase down the cap on taxes from 6 percent to 3 percent by 2028, leading to $175 billion in savings over a decade.

A 2022 report from the Congressional Research Service, a nonpartisan budget scorekeeper, found that getting rid of the taxes altogether could create savings of $612 billion over 10 years, making up the majority of the $880 billion in cuts Energy and Commerce needs to make.

For now, the panel is figuring out its next steps and what can get support from Republicans’ narrow House majority.

Rep. Buddy Carter (R-Ga.), chair of the Energy and Commerce Health Subcommittee, told POLITICO that the state taxes are in the mix.

“With Medicaid, we’re concentrating on waste, fraud and abuse,” he said. “If it’s waste, fraud and abuse, then it’s in danger of being cut.”

Kelly Hooper and Daniel Han contributed to this report.

New York

New York City health clinic now asking for proof of citizenship, citing Trump
Federally funded community health centers are required by law to provide basic health services to anyone in their area.

By Maya Kaufman, Politico

02/27/2025 05:00 PM EST

NEW YORK — A prominent community health center with a long legacy of treating asylum-seekers is now requesting patients’ proof of citizenship, in an apparent response to the Trump administration’s broad threats to federal funding and anti-immigrant rhetoric.

The Floating Hospital in Queens is asking patients to show their Social Security cards or other proof of citizenship, citing an unspecified executive order by the Trump administration, according to an audio recording reviewed by POLITICO and two city lawmakers who were briefed on the matter and granted anonymity to speak candidly about a sensitive issue.

The policy, which was implemented earlier this month, appears to contradict federal requirements for community health centers under the Public Health Service Act, according to state and national trade associations. To be eligible for federal grant funding, organizations like the Floating Hospital are required to provide certain basic health services to all patients in their area, regardless of their ability to pay.
The Floating Hospital receives over $4 million annually in federal grants for primary health care, according to Health Resources & Services Administration data.

Spokespeople for the Floating Hospital did not respond to a list of questions about the matter. The organization’s president and general counsel, attorney Sean Granahan, did not return POLITICO’s requests for comment.

The health center’s actions show the wide-reaching ramifications of President Donald Trump’s efforts to force recipients of federal funding to adhere to his political agenda. Already in New York City — a progressive bastion within a majority Democratic state — a Bronx medical school erased references to diversity initiatives from its website and multiple Manhattan hospitals shifted their approaches to gender-affirming care for transgender adolescents.

Murad Awawdeh, president and CEO of the New York Immigration Coalition, said universal access to medical services is a moral imperative and essential for public health.

“Excluding certain people from this care will hurt every New Yorker, and creates a chilling effect for providers and for recipients alike,” he said in a statement to POLITICO. “Let us be clear to all health care providers operating in New York State: you must treat every person who needs care. Any ‘health care’ institution that turns its backs on its mission to care for all has made the wrong choice, but it is not too late to correct this mistake and fulfill its mandate to serve the people of New York City.”

It is unclear whether other local community health centers are following in the Floating Hospital’s footsteps. A health center in New Mexico reportedly began turning away noncitizens after an executive order by Trump last week directed federal agencies to ensure federally funded programs do not provide taxpayer-funded benefits to “unqualified aliens,” according to local news reports. That organization reversed course after Democratic Sen. Martin Heinrich publicly criticized the policy.

The National Association of Community Health Centers is advising members that federal law still requires them to provide care to all residents of their service area and to not discriminate against patients based on their identity, a spokesperson said in a statement to POLITICO.

Every New Yorker has a right to quality health care, regardless of immigration status, the city health department’s website states. That includes emergency medical care.

The Floating Hospital previously touted a 155-year legacy of providing “expert medical care to all who have needed it, regardless of insurance status, immigration status or ability to pay,” according to an archived version of its homepage accessed through the Wayback Machine.

The same message on its homepage now substitutes “identity status” for “immigration status.”