The Trump administration earlier this week unveiled a new rule that advocates said would make it harder for states to fund their Medicaid programs, compounding damage caused by expanded work requirements and other changes enacted under the 2025 Republican budget law.
The law bars states from creating new provider taxes—levies on hospitals and other healthcare providers—and limits existing ones. The new Centers for Medicare and Medicaid Services (CMS) rule, which is open for public comment until September, would codify the GOP law’s changes.
Anthony Wright, executive director of Families USA, said Wednesday that the CMS rule “goes beyond the harsh restrictions already imposed by Congress to further narrow the options that states have to fund Medicaid services and providers.”
“Along with Congress’ other restrictions on taxing healthcare providers—restrictions that gut Medicaid funding in all states—CMS estimates this new proposed rule will cut $198.7 billion in state Medicaid funding over 10 years,” Wright noted. “This rule comes at a time when states are already under significant budgetary pressure to foot the bill for the cost of implementing complex and unnecessary work reporting requirements; in tandem with a proposed rule that slashes Medicaid provider payments and further eliminates state flexibility.”
“Taken together," Wright warned, “these three rules serve as a coordinated dismantling of the Medicaid program, including its eligibility systems, payment structures and financing mechanisms, with disastrous impacts on individuals and healthcare systems.”
The Republican budget measure, which President Donald Trump signed into law last summer, includes roughly $900 billion in Medicaid cuts over the next decade. Millions of Americans have lost Medicaid coverage since the GOP law took effect.
Earlier this week, the entire House Democratic caucus implored CMS to “reconsider” its recently published Medicaid work requirement rule, warning it “will create an undue burden for beneficiaries with serious healthcare needs and put people at risk of losing coverage, while also creating significant implementation challenges for states.”
“This rule will require beneficiaries to frequently prove and verify their exemptions in order to maintain coverage, which will cause confusion, create bureaucratic burdens for patients seeking care, and, as a result, will lock patients out of lifesaving treatments,” the lawmakers wrote. “Forcing vulnerable patients to exhaustively document their symptoms simply to maintain access to basic
healthcare is both imprudent and inconsistent with federal law.”
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