House GOP Unveils Federal Budget Proposal for Medicaid

The U.S. House Energy and Commerce Committee released its budget proposal late Sunday evening aimed at saving $880 billion through sweeping changes to the Medicaid program. While the plan avoids the most extreme reforms like per-capita funding caps, the measure still includes significant changes that could affect coverage and strain state budgets. Most notably, the proposal would freeze state provider taxes at current levels, curtailing future efforts to enhance federal matching funds.Ohio’s current SFY2026-2027 budget relies on an increase in hospital taxes to expand Medicaid funding.

In addition to curtailing provider taxes, the proposal would:

• Introduce work requirements for certain adults without dependents, potentially leading to loss of coverage for millions.
• Implement a 10-year moratorium on the mandatory nurse staffing rule mandate, freezing until January 2035.
• Severely reduce Medicaid retroactive coverage by limiting reimbursement to one month prior to the application date, instead of the three months allowed under current law.
• Require 1115 waivers to be cost neutral moving forward to gain CMS approval.
• Implement cost-sharing for some beneficiaries (up to 5% of income).
• Ban Medicaid funding for gender-affirming care for youth and cut funds to organizations like Planned Parenthood.
• Reduce federal support for states covering undocumented immigrants with their own funds.
• Crack down on state-directed payments and increase the frequency of eligibility checks (twice yearly instead of once).

LeadingAge staff continues to pour through the alert, and will be including updates in its serial post on its website. In addition to the Energy & Commerce markup, the House Ways & Means committee released its draft late Monday, which is being reviewed by LeadingAge staff currently.