How hospitals could still escape the megabill's Medicaid cuts

Politico

4 days ago

And 2028 is not only an election year, but a presidential one.
'Are they really going to want to cut rural hospitals in an election?' asked Chris Mitchell, head of the Iowa Hospital Association. 'We're going to talk to our delegation early and often about the impact of these cuts and how looming cuts down the road impact how hospitals run in the interim.'
Heartening for hospital executives is a now-long history of Congress delaying or repealing the painful parts of major legislation.
Congress, for example, never allowed a tax on high-end 'Cadillac' insurance plans in 2010's Affordable Care Act to take effect, and rescinded a tax on medical devices.
'We saw it with the Affordable Care Act, and we will certainly see it with this bill,' predicted Ben Klein, a former Democratic Senate aide and founding partner of Red+Blue Strategies, a lobbying firm that counts major hospital groups and systems among its clients.
Congress' habit of revisiting painful cuts also guarantees a multiyear windfall for K Street, the Washington corridor where many lobbyists have their shops. Lobbyists with ties to Trump or Republicans in Congress have already seen a surge in revenue this year. Several state-based hospital associations say they will ramp up meetings with lawmakers to stress the need for an off-ramp before the 2028 elections.
Even before the megabill's enactment, some Republicans in competitive districts were suggesting Congress may need to tweak a provision restricting states' ability to extract more money from the Treasury if it causes problems for hospitals.
'If it looks like we have issues and we're not comfortable, we can change it,' Rep. Jeff Van Drew (R-N.J.) said before the House voted to pass the bill last week. 'Things are subject to change. We're going to have different members of Congress. We're going to have a new president. Things are going to be different.'
If the lobbyists are successful in undoing the cuts — which mostly target Medicaid, the state-federal insurance program for low-income people — it'll mean the One Big Beautiful Bill Act will be even more expensive than the Congressional Budget Office expects: $3.4 trillion in deficit spending over a decade.
That will have ramifications across the U.S. economy, exposing Americans to higher interest rates and slower economic growth, budget experts warn.
'If they are successful in getting these reductions delayed, modified, scaled back, … it will be a tax on future generations,' said Bill Hoagland, senior vice president at the Bipartisan Policy Center and longtime GOP Senate budget aide.
But that's a deal hospital executives — who have predicted the cuts could threaten some facilities' survival — are willing to take.
Delays and cuts
States use two tools to get higher Medicaid payments from the federal government. The first is a tax on hospitals and other providers. States use the tax revenue to pay their share of Medicaid, which offers insurance to more than 70 million low-income Americans.