Parliamentarian’s wrench into ‘big, beautiful’ bill might spare Minnesota some Medicaid cuts

WASHINGTON – The Senate Parliamentarian dealt a serious blow to the U.S. Senate’s “big beautiful” bill on Thursday, a move that threatens President Trump’s economic agenda and spares Minnesota from some of the steep Medicaid cuts that would have cost the state hundreds of millions of dollars.

The bill is being considered under the reconciliation process, which bars the use of a filibuster but must be subject to the Byrd Rule, which prevents the inclusion of “extraneous” provisions, including those that don’t directly affect spending or revenue and those that make major increases to the deficit.

John Connolly, deputy commissioner of the Minnesota Department of Human Services and state Medicaid director, was cautious about the rulings made by Senate Parliamentarian Elizabeth MacDonough, who some angry GOP lawmakers demand to be fired.

“At this point, we aren’t sure about those provisions,” Connolly said of MacDonough’s rulings during a virtual press conference on Thursday.

A major impact of the parliamentarian’s ruling on Minnesota is the tossing of a provision that would cap the Medicaid provider tax for states that have expanded Medicaid under the Affordable Care Act.

Most states, including Minnesota, charge extra taxes to medical providers and in return give them higher Medicaid payments. Since the cost of the Medicaid program, known as Medical Assistance in Minnesota, is shared between the state and federal government, those enhanced payments bring more federal matching funds to Minnesota.

Minnesota’s provider tax is low at 1.8%. But to shore up finances in rural hospitals and other Medicaid-dependent hospitals in the state, the newly adopted state budget would raise that tax to 5.75% on participating hospitals.

The state hoped to extract an additional $1 billion a year from the federal government for their plan, which must be approved by the Centers for Medicare & Medicaid Services (CMS), but the Senate bill would cap provider taxes at 3.5%. The parliamentarian ruled that the cap violated the Byrd Rule.

But the provision has already run into political trouble, as several Senate Republicans have voiced deep concern about the provider tax cap’s impact on their rural hospitals.

by Ana Radelat