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Senate Democrats have smartly gone after the funding cuts mechanisms in the tax cuts for the rich bill, and they got a big win in the Byrd Bath process because of it. One of the ways that Republicans planned to cut Medicaid was to shift the cost burden for the program to the states, while cutting off a state’s ability to fund the program through provider taxes.

Republicans also tried to deny Medicaid and ACA marketplace access to immigrants.

The Senate parliamentarian ruled that the provisions in the legislation related to these goals violated the rules of reconciliation.

Here is a list from the Senate Budget Committee Democrats of what has been tossed from the bill:

Prohibiting federal financial participation under Medicaid and CHIP for individuals without verified citizenship, nationality or satisfactory immigration status. This section prohibits federal financial participation in Medicaid for adults and kids whose citizenship, nationality, or immigration status cannot be immediately verified, overriding the existing 90-day reasonable opportunity period that currently exists for states to provide coverage as they verify individuals’ immigration status under threat of withholding federal funds. (Section 71109)

Immigrant Medicaid Eligibility. This section denies federal funding to states for Medicaid coverage for certain immigrants who are not citizens. (Section 71110)

Expansion of FMAP for certain states providing payments for health care furnished to certain individuals. This section lowers the Medicaid expansion federal medical assistance percentage from 90 percent to 80 percent for states that choose to provide coverage to people who are undocumented using the state’s own funds. (Section 71111)

Spread pricing in Medicaid. This section requires Medicaid managed care contracts with pharmacy benefit managers to adopt state reimbursement methodologies for pharmacy reimbursement. Reimbursement amounts from managed care organizations would be required to be fully passed through to pharmacies. (Section 71116)

Prohibiting Federal Medicaid and Children’s Health Insurance Program (CHIP) Funding for Gender Affirming Care. This section prohibits federal Medicaid and CHIP funding for gender-affirming medical care. (Section 71117)

Provider Taxes. This provision prohibits non-expansion states from increasing the rate of current provider taxes or increasing the base of the tax to a class or items of services that the tax did not previously apply. Beginning in 2027, the hold harmless threshold in expansion states for provider classes other than nursing or intermediate care facilities would be reduced by 0.5 percent annually until the maximum hold harmless threshold reaches 3.5 percent in 2031. Ending states’ ability to tax health care providers would severely limit states’ ability to provide health care to millions of Americans who depend upon Medicaid for their care. (Section 71120)

Limiting Medicare coverage of certain individuals. This section revokes eligibility from certain immigrants who are not citizens. This section effectively removes the ability of refugees, asylum seekers, and people with temporary protected status from being able to enroll in the Medicare program, even if they have sufficient work history, pay into the Medicare program, and meet other requirements, including age and disability status. (Section 71201)

Permitting premium tax credits only for certain individuals. This section limits immigrants who are not citizens from qualifying for premium tax credits or cost-sharing reductions beginning in 2027. This would prohibit over 1 million currently eligible individuals from qualifying for premium assistance when purchasing insurance through the Affordable Care Act Marketplaces. (Section 71301)

Disallowing premium tax credit during periods of Medicaid ineligibility due to immigrant status. This section prohibits the use of premium tax credits for persons buying health insurance on the Affordable Care Act Marketplaces if their immigration status alone would deem them ineligible for Medicaid, effectively eliminating access to affordable insurance coverage for these individuals. The conforming amendments to Sections 1331 and 1402 of the Affordable Care Act on immigrant eligibility for cost-sharing reductions and basic health programs for low-income individuals not eligible for Medicaid cannot be made under the Byrd Rule. (Section 71302).

Senate Republicans are now going to have to rewrite major parts of the Medicaid provisions of the bill to either comply with the rules of reconciliation, or they are going to have to come up with different cuts to put in the bill.

According to Laura Weiss of Punchbowl News, who posted on X, that is exactly what Senate Republicans will do:

WHAT’S NEXT after R’s dealt a blow from parliamentarian knocking out provider tax & more Medicaid cuts Senate R’s will keep working on provider tax crackdown. R’s expected to go back to the parl w/ new provider tax language & can also try other savings options w/ a similar goal, per multiple sources But this will take time. Still significant Byrd Bath work w/ parl to go & these are critical pieces of the bill. Senate R’s still pushing for July 4 finish.

Senate Republicans now have to make massive changes in the legislation, and it is very uncertain whether these changes can pass the House.

This whole effort could be on the verge of collapse.

Republicans should forget about getting this bill passed and to Trump’s desk by the 4th of July.

It is questionable whether this Frankenstein of bad policy can pass at all.

Bit by bit, what the American people are witnessing is the unraveling of Trump’s “Big Beautiful Bill.”

What do you think about Senate Democrats getting some big wins on Medicaid cuts? Share your thoughts in the comments below.

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