Rep. Jim McGovern speaking in the house (unedited):
The gentle lady was talking about what was said in the rules committee meeting last night. I want to take a couple of minutes to talk about how people voted in the rules committee last night. We gave republicans a chance last night.
The committee said if they really don’t believe that thi…
Rep. Jim McGovern speaking in the house (unedited):
The gentle lady was talking about what was said in the rules committee meeting last night. I want to take a couple of minutes to talk about how people voted in the rules committee last night. We gave republicans a chance last night.
The committee said if they really don’t believe that this budget cuts funding for school meals, if they really believe what they’re saying, then they can vote to assure the American people that they’re not going steal school meals from kids in order to give tax breaks for millionaires. Every Republican voted no, every single one of them.
Then Democrats offered to protect Medicaid and Medicare. Medicaid as you know covers 41% of all births in the United States, nearly half of children with special healthcare needs and 5 in 8 nursing home residents. We asked them not to cut Medicaid in order to fund tax breaks for billionaires. Every Republican vote voted no.
Then Democrats offered an amendment to extend the tax cuts for people making under $400,000 while ensuring that corporations and billionaires pay their fair share. We asked Republicans to continue tax cuts for only those who needed the most because those are the tax cuts they let expire while their tax cards for greedy corporations were made permanent. We asked them to prioritize working families over greedy corporations. Every Republican voted no.
Then, Democrats offered an amendment preventing tax giveaways for people earning over $1 million a year. Every republican voted no. We wanted to see if there was anyone so rich that Republicans don’t think they deserve a tax giveaway, so we asked them to vote against tax rates for earning over $100 million per year. We asked them to side with factory workers and firefighters over hedge fund managers and billionaire bankers. Every republican voted no.
We even offered an amendment preventing tax cuts for people with a net worth of over - getting this - $1 billion. Every Republican voted no. They betrayed their constituents. They voted to steal from the American people in order to protect tax breaks for billionaires. Again, this is about whose side you are on. Republican showed us last night with their votes whose side they are on, and it’s not the working people this country.
Rep. Jim McGovern’s speech casts Republicans as villains robbing kids’ lunches to fund billionaire tax breaks.
It’s a great story, but the facts don’t line up.
School meal funding? The USDA’s budget for child nutrition rose from $23.2 billion in 2020 to over $28 billion in 2024. No cuts there—just a budget debate over spending growth. Medicaid and Medicare?
GOP plans slow their rise (up 30% since 2019) via reforms, not slashes for tax handouts. Tax cuts? The 2017 law boosted GDP and jobs, per the Tax Foundation; individual breaks expire in 2025, corporate ones don’t—policy, not greed.
McGovern’s amendments were theater—symbolic votes, not fixes. The top 1% already pay 46% of income taxes (IRS, 2022). This isn’t about stealing from workers; it’s a fight over growth versus guarantees. Hyperbole’s fun, but it’s not the truth.
Why the politics!!?!?!?! Why, why, why?
Lets talk about the problems underlying this noise.
That’s just a scrapbook for political fan fiction—doesn’t make it gospel. You’re clinging to it like a life raft, but I don’t need to disprove your vibes; you’ve got to bring more than sass and a hunch.
Trump’s theater? Sure, but it’s sold-out shows while your crew’s playing to empty seats. And ‘Chainsaw Muskie’? Cute nickname, but he’s building rockets, not robbing peasants. Reverse Robin Hood? Nah, they’re just not spoon-feeding the entitled—sorry if that stings.
Pucker up all you want, but that ‘kiss of truth’ you felt? Probably just the breeze from reality passing you by.
You mean that Musk’s engineers, at great taxpayer expense, are building rockets that blow up and endanger air traffic. The only waste, fraud and abuse to be found is in all of his government contracts. At trump’s direction, Chainsaw Charlie has ripped the foundations out from under our government. We are all now caught up in Donald’s own reality show. From your response, I can only assume that you are pleased with the result.
Shakespeare was right when he said, “Hell is empty. All the devils are here”.
I appreciate your perspective and the passion behind it, but I’d like to address some of the points raised with the data at hand, as it tells a different story about SpaceX’s contributions and costs.
First, the claim that SpaceX’s rockets are built “at great taxpayer expense” doesn’t fully align with the numbers. SpaceX’s Falcon 9 launches cost around $67 million each, a fraction of the $2–4 billion per launch for NASA’s Space Launch System (SLS), which Boeing develops under traditional government contracts. Even in crewed missions, SpaceX’s Crew Dragon comes in at $209 million per mission for NASA, compared to $345 million for Boeing’s Starliner. These savings stem from SpaceX’s reusable rocket technology and streamlined operations, reducing the burden on taxpayers compared to older models of government-funded spaceflight. NASA’s own audits and reports—like the 2021 Inspector General findings—highlight how SLS costs ballooned, while SpaceX delivers results under fixed-price contracts, shifting much of the financial risk to the company itself rather than the public.
As for rockets “blowing up,” SpaceX has had failures—most notably early Falcon 1 attempts and a few high-profile Falcon 9 incidents, like the 2015 CRS-7 explosion or the 2016 AMOS-6 loss. But their success rate has soared: in 2024 alone, SpaceX completed 132 launches with no failures reported, a reliability that rivals or exceeds legacy providers. The data shows they’ve transformed launch cadence—global launches have doubled or tripled since the 1990s, with SpaceX driving over half of 2024’s 223 orbital missions. This isn’t waste; it’s efficiency that’s opened space to more players, from science missions to commercial satellites.
On endangering air traffic, SpaceX coordinates launches with the FAA, which imposes strict airspace closures. Incidents are rare—FAA data shows no major air traffic disruptions tied to SpaceX beyond temporary delays, unlike the broader risks of unregulated airspace. Fraud or abuse in contracts? NASA’s oversight and GAO reviews have flagged cost overruns in Boeing’s SLS program (e.g., $1.8 billion over budget by 2021), while SpaceX’s fixed-price deals have stayed within bounds, delivering six crewed ISS missions on time.
Your reference “Chainsaw Charlie” seems to tie this to broader governance critiques, which I won’t presume to unpack fully. But the space program’s shift predates recent administrations—SpaceX’s rise began under Obama with the Commercial Crew Program, not Trump. As for a “reality show,” the results are tangible: U.S. launches jumped from 20–30 annually in the 1990s to 150+ in 2024, largely thanks to SpaceX. That’s not chaos—it’s capability.
I’m not here to cheerlead or lament, just to clarify what the numbers show. SpaceX’s approach has cut costs, boosted access to space, and delivered results, not devils. Shakespeare’s line is vivid, but the data suggests a different scene: not hell, but a new frontier being built, imperfectly but effectively.
Oh, sweetie? I had no idea you felt that way. Blush…
Muskie is crashing rockets we are paying him to crash and hawking cars on the WH lawn, suckering people like you. I was wondering why it took you so long to comment today but just realized the factory first shift doesn’t let out until 3:30 or so.
Why do you hide behind an avatar name? That breeze on my tuchus had the smell of butter so it must have been you.
Darrell—your 'Muskie crashing rockets' spiel is slipping off the plate like bad grease. I’m tickled you think I’m on a 3:30 factory clock, but this Butter's too busy spreading common sense and locking down the net to care. No need to hide behind my avatar—it’s just me, serving up reason while you’re out there sniffing buttery breezes. Speaking of, who’s greasing your tuchus, champ? Not me—I’m not into your backdoor buffet, so keep that mess off my table.
not wanting to cut Medicaid but wanting to save $ by fixing the loophole, which Biden even saw:The Legal Loophole That Costs Medicaid Billions
How states inflate the cost of Medicaid to get more money from the federal treasury.
March 12, 2025
Medicaid is a broadly popular program that provides medical coverage to low-income Americans through a combination of state and federal funding. More than 60 percent of Americans either know someone who has benefited from Medicaid or have been enrolled themselves, according to health policy think tank FFF. So any talk of altering the program usually meets strong opposition.
Yet few seem to know how the system works, what it costs, or the level of unnecessary spending hidden within its $880 billion annual budget.
One example is a little-known quirk in the Medicaid system that allows states to artificially inflate their Medicaid costs to recoup more federal dollars. The arrangement allows some states to pocket a share of the money paid to them for providing treatment to Medicaid patients.
Here’s how it works.
Medicaid Enrollment and Providers Taxed
57,72012,199,634
Enrollment as of October 2024.
Source: Congressional Research Service and Medicaid.govCreated with Datawrapper
The Loophole
When a Medicaid patient receives a treatment or service, the state pays the doctor, hospital, nursing home, or other provider. The federal government reimburses each state for a portion of its Medicaid expenses. The reimbursement ranges from 50 percent to 76.9 percent depending on the median income level in the state and other factors.
An exception to this exists for people who enrolled through the Medicaid expansion under the Affordable Care Act. For them, the reimbursement rate is 90 percent.
So if a state had a 60 percent reimbursement rate and spent $10 billion on Medicaid services, the federal government would reimburse the state $6 billion.
That’s how the system was designed to work back in 1965, generally speaking.
By the mid-1980s, some states had found a way to increase payments to providers and reimbursement of their own Medicaid costs at the expense of the federal government.
First, medical providers would either voluntarily donate money to a state or pay a tax. The states would then return the amount of the donation or tax, and possibly even more, to the providers through increased reimbursement. Finally, the states would bill the federal government for the apparent increased cost.
In some cases, the providers themselves initiated these arrangements, according to the Congressional Research Service (CRS).
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For example, a hospital might agree to pay the state $10 million in taxes. The state might then increase Medicaid payments to that hospital to $20 million. If the state’s reimbursement rate was 60 percent, it would receive $12 million in federal Medicaid funding.
Together with the tax income, the state would receive $22 million and pay $20 million, netting $2 million for additional Medicaid costs or other purposes.
The arrangement benefits providers by increasing their reimbursement, and the states benefit by reducing their costs or even gaining revenue. The federal government bears the cost of those increases.
Congress debated the issue in 1991.
Lawmakers who favored keeping the arrangement in some form argued that it had become a vital part of state Medicaid funding.
Rep. Raymond McGrath (R-N.Y.) said at the time that doing away with the system would cost his state $500 million in federal matching funds. He predicted “chaos” in the Medicaid system if provider taxes were abolished.
The administration of President George H.W. Bush strongly opposed the taxes in a position statement, saying, “State donation and provider-specific tax programs, if unchecked, will undermine a basic premise of the Medicaid program—that States have a stake in the costs of the program.”
In the end, Congress chose to impose limits on provider taxes and donations.
First, provider donations to the state are strictly limited to prevent abuse. Second, state taxes must meet certain conditions or the state will lose federal funding.
Taxes must apply to all providers in a certain class, such as nursing homes, not just those who serve Medicaid patients. Also, states can’t provide any direct or implied guarantee that they will reimburse providers for the amount of the tax. The limit on provider taxes is 6 percent.
Here’s how the provider tax works today.
Increasing Tax, Dependence
In 2004, 35 states had taxes on medical care providers. Now every state but Alaska taxes some providers, as does the District of Columbia.
And states depend more on tax revenue to fund Medicaid—and other things—according to the Government Accountability Office (GAO).
From 2008 to 2018, the share of states’ Medicaid spending covered by provider taxes grew from 7 percent to 17 percent according to the GAO.
In 2018, states received $63 billion in provider taxes and local government funds, according to GAO estimates. Of that amount, $16 billion (25 percent) was not used to pay providers.
That shifted 5 percent of the cost of Medicaid from the states to the federal government, the GAO estimates. The practice also resulted in lower overall reimbursement to some providers when accounting for their tax payments.
When measured as a percentage of the nation’s gross domestic product, a common measure of the country’s total wealth, the burden of providing Medicaid remained the same for states from 2008 to 2023. While overall spending went up, the economy was growing, too, so state Medicaid spending was essentially flat according to the think tank Paragon Health Institute.
Yet the overall cost of the program increased dramatically, meaning that the federal government paid the entire increase in the cost of the program over that 15-year period, according to Paragon.
Over that same period, the federal government’s share of the total cost of Medicaid grew from 60 percent to 72 percent.
Possible Changes
Republicans, searching for ways to reduce the federal budget deficit, have tasked the House Committee on Energy and Commerce with finding $880 billion in savings over the next 10 years.
Medicaid accounts for 92 percent of the spending that the committee manages, so changes to the program have been discussed.
Lawmakers have floated ideas such as limiting how much the federal government reimburses the states or reducing the percentage of the reimbursement.
House Speaker Mike Johnson (R-La.) said he won’t do either of those things. “We’re talking about finding efficiencies in every program, not cutting benefits for people who rightly deserve them,” Johnson said in a Feb. 26 interview on CNN.
That has caused some lawmakers to eye the provider taxes.
The Congressional Budget Office (CBO), which provides nonpartisan financial assessments to Congress, estimated the impact of altering the provider tax restrictions.
The CBO discovered that eliminating the tax would reduce the federal deficit by $612 billion over 10 years. Reducing the tax to 2.5 percent would reduce the deficit by $241 billion, and lowering it to 5 percent would bring a $48 billion reduction.
Democrats are firmly united in opposing any Medicaid reductions.
“Republicans are trying to enact the largest cut to Medicaid in American history, and we need to keep the pressure on them legislatively and in communities all across the country,” House Minority Leader Hakeem Jeffries (D-N.Y.) said in a video call with Democratic leaders on March 5.
All 47 Democrat and Independent senators signed a letter to Republican leaders in February, arguing that there’s not enough fraud and waste in the program to offset proposed budget cuts.
Unknown Impact
The use of state taxes to boost Medicaid reimbursement has had critics on both sides of the aisle. Former President Joe Biden referred to state taxes on health care providers as a “scam” according to Bob Woodward in his book “The Price of Politics.”
Others have defended the device as a way for cash-strapped states to keep Medicaid going. As the CRS notes, the provider tax helps states increase reimbursement to certain types of providers, such as hospitals and nursing homes.
Use of the tax has tended to increase during and after recessions. “Medicaid provider tax revenue can provide a way for states to continue funding the Medicaid program during times of state budget constraints,” according to CRS.
Yet it’s unclear how much limiting state taxes on health care providers would affect Medicaid.
California has more than 12 million Medicaid enrollees and derives more than 60 percent of its Medicaid funding from the federal government. The state reported that its spending on Medicaid from its general fund decreased by 5.8 percent in 2024. Federal Medicaid payments to California increased 1.9 percent that year.
Eliminating all taxes on health care providers would reduce federal Medicaid payments by about 8 percent over 10 years, according to the CBO. Reducing the tax rate would produce reductions of 0.6 to 3 percent.
“I just don’t think that’s enough money at stake for states to want to cut their [Medicaid] expansion population in light of the total cost of Medicaid expansion,” Niklas Kleinworth of Paragon Health Institute has said.
Kleinworth theorized that states would be more likely to cut funding for what are called social determinants of health. Those can include home modifications, non-medical transportation, and education according to a CMS directive.
“You'll probably see states making their Medicaid programs more efficient,” Kleinworth said.
The true impact is difficult to predict because the total amount of provider tax revenues states use on Medicaid expenditures is not fully known, according to CRS.
Noting that fact, the GAO recommended five years ago that the Centers for Medicare and Medicaid Services collect complete and consistent information on all sources of funding used by states to finance Medicaid, including provider taxes.
As of February, the recommendation has not been implemented.
Once again you prove your impeccable intuition as I absolutely did not read your cut & paste comment. It’s more fun to provide you with what I believe is a witty comeback as what I think when it comes to your comments is all that matters to me.
Woh…dude, you got me! I better be careful or mommy will notice I’m downstairs and not in school. AI is such a waste of time when I write my own material.
Surprised Jeffry let his WaPo run this story…
“Elon Musk’s Department of Government Efficiency (DOGE) backed off a plan to scrap telephone services for millions of Americans filing claims with the Social Security Administration, just hours after The Washington Post revealed the sweeping changes.
In a tense Tuesday meeting, DOGE staff grilled SSA officials about phone fraud and proposed shifting all claims processing to online channels and in-person offices, according to The Post.
SSA employees floated possible solutions, but DOGE wasn’t “interested in anything else but defending the decision that they had already made,” a source familiar told the paper. (THAT SOUNDS A LOT LIKE YOU!!!)
The news was met with outrage on Musk’s social media platform X.
“Going after 90-year-old grandmas who can’t drive and don’t have a computer? That’s just low,” New York Governor Kathy Hochul said.
“Gramma and Grampa are already waiting too long for answers about their Social Security,” Sen. Ed Markey wrote. “Now, Elon Musk and DOGE want to close field offices and take away their option to use the phone. This is outrageous.”
Rep. Jim McGovern speaking in the house (unedited):
The gentle lady was talking about what was said in the rules committee meeting last night. I want to take a couple of minutes to talk about how people voted in the rules committee last night. We gave republicans a chance last night.
The committee said if they really don’t believe that this budget cuts funding for school meals, if they really believe what they’re saying, then they can vote to assure the American people that they’re not going steal school meals from kids in order to give tax breaks for millionaires. Every Republican voted no, every single one of them.
Then Democrats offered to protect Medicaid and Medicare. Medicaid as you know covers 41% of all births in the United States, nearly half of children with special healthcare needs and 5 in 8 nursing home residents. We asked them not to cut Medicaid in order to fund tax breaks for billionaires. Every Republican vote voted no.
Then Democrats offered an amendment to extend the tax cuts for people making under $400,000 while ensuring that corporations and billionaires pay their fair share. We asked Republicans to continue tax cuts for only those who needed the most because those are the tax cuts they let expire while their tax cards for greedy corporations were made permanent. We asked them to prioritize working families over greedy corporations. Every Republican voted no.
Then, Democrats offered an amendment preventing tax giveaways for people earning over $1 million a year. Every republican voted no. We wanted to see if there was anyone so rich that Republicans don’t think they deserve a tax giveaway, so we asked them to vote against tax rates for earning over $100 million per year. We asked them to side with factory workers and firefighters over hedge fund managers and billionaire bankers. Every republican voted no.
We even offered an amendment preventing tax cuts for people with a net worth of over - getting this - $1 billion. Every Republican voted no. They betrayed their constituents. They voted to steal from the American people in order to protect tax breaks for billionaires. Again, this is about whose side you are on. Republican showed us last night with their votes whose side they are on, and it’s not the working people this country.
I reserve my time.
Rep. Jim McGovern’s speech casts Republicans as villains robbing kids’ lunches to fund billionaire tax breaks.
It’s a great story, but the facts don’t line up.
School meal funding? The USDA’s budget for child nutrition rose from $23.2 billion in 2020 to over $28 billion in 2024. No cuts there—just a budget debate over spending growth. Medicaid and Medicare?
GOP plans slow their rise (up 30% since 2019) via reforms, not slashes for tax handouts. Tax cuts? The 2017 law boosted GDP and jobs, per the Tax Foundation; individual breaks expire in 2025, corporate ones don’t—policy, not greed.
McGovern’s amendments were theater—symbolic votes, not fixes. The top 1% already pay 46% of income taxes (IRS, 2022). This isn’t about stealing from workers; it’s a fight over growth versus guarantees. Hyperbole’s fun, but it’s not the truth.
Why the politics!!?!?!?! Why, why, why?
Lets talk about the problems underlying this noise.
Dude, it’s now in the congressional record, just like all the GOP lies. I believe this unless you actually prove it incorrect.
Trump is nothing but theater along with chainsaw Muskie. They sell out the WH, gift and do an upside down Robin Hood impersonation.
Now pucker up…I actually felt the first one.
Oh, sweetie, the congressional record?
That’s just a scrapbook for political fan fiction—doesn’t make it gospel. You’re clinging to it like a life raft, but I don’t need to disprove your vibes; you’ve got to bring more than sass and a hunch.
Trump’s theater? Sure, but it’s sold-out shows while your crew’s playing to empty seats. And ‘Chainsaw Muskie’? Cute nickname, but he’s building rockets, not robbing peasants. Reverse Robin Hood? Nah, they’re just not spoon-feeding the entitled—sorry if that stings.
Pucker up all you want, but that ‘kiss of truth’ you felt? Probably just the breeze from reality passing you by.
You mean that Musk’s engineers, at great taxpayer expense, are building rockets that blow up and endanger air traffic. The only waste, fraud and abuse to be found is in all of his government contracts. At trump’s direction, Chainsaw Charlie has ripped the foundations out from under our government. We are all now caught up in Donald’s own reality show. From your response, I can only assume that you are pleased with the result.
Shakespeare was right when he said, “Hell is empty. All the devils are here”.
I appreciate your perspective and the passion behind it, but I’d like to address some of the points raised with the data at hand, as it tells a different story about SpaceX’s contributions and costs.
First, the claim that SpaceX’s rockets are built “at great taxpayer expense” doesn’t fully align with the numbers. SpaceX’s Falcon 9 launches cost around $67 million each, a fraction of the $2–4 billion per launch for NASA’s Space Launch System (SLS), which Boeing develops under traditional government contracts. Even in crewed missions, SpaceX’s Crew Dragon comes in at $209 million per mission for NASA, compared to $345 million for Boeing’s Starliner. These savings stem from SpaceX’s reusable rocket technology and streamlined operations, reducing the burden on taxpayers compared to older models of government-funded spaceflight. NASA’s own audits and reports—like the 2021 Inspector General findings—highlight how SLS costs ballooned, while SpaceX delivers results under fixed-price contracts, shifting much of the financial risk to the company itself rather than the public.
As for rockets “blowing up,” SpaceX has had failures—most notably early Falcon 1 attempts and a few high-profile Falcon 9 incidents, like the 2015 CRS-7 explosion or the 2016 AMOS-6 loss. But their success rate has soared: in 2024 alone, SpaceX completed 132 launches with no failures reported, a reliability that rivals or exceeds legacy providers. The data shows they’ve transformed launch cadence—global launches have doubled or tripled since the 1990s, with SpaceX driving over half of 2024’s 223 orbital missions. This isn’t waste; it’s efficiency that’s opened space to more players, from science missions to commercial satellites.
On endangering air traffic, SpaceX coordinates launches with the FAA, which imposes strict airspace closures. Incidents are rare—FAA data shows no major air traffic disruptions tied to SpaceX beyond temporary delays, unlike the broader risks of unregulated airspace. Fraud or abuse in contracts? NASA’s oversight and GAO reviews have flagged cost overruns in Boeing’s SLS program (e.g., $1.8 billion over budget by 2021), while SpaceX’s fixed-price deals have stayed within bounds, delivering six crewed ISS missions on time.
Your reference “Chainsaw Charlie” seems to tie this to broader governance critiques, which I won’t presume to unpack fully. But the space program’s shift predates recent administrations—SpaceX’s rise began under Obama with the Commercial Crew Program, not Trump. As for a “reality show,” the results are tangible: U.S. launches jumped from 20–30 annually in the 1990s to 150+ in 2024, largely thanks to SpaceX. That’s not chaos—it’s capability.
I’m not here to cheerlead or lament, just to clarify what the numbers show. SpaceX’s approach has cut costs, boosted access to space, and delivered results, not devils. Shakespeare’s line is vivid, but the data suggests a different scene: not hell, but a new frontier being built, imperfectly but effectively.
Oh, sweetie? I had no idea you felt that way. Blush…
Muskie is crashing rockets we are paying him to crash and hawking cars on the WH lawn, suckering people like you. I was wondering why it took you so long to comment today but just realized the factory first shift doesn’t let out until 3:30 or so.
Why do you hide behind an avatar name? That breeze on my tuchus had the smell of butter so it must have been you.
Darrell—your 'Muskie crashing rockets' spiel is slipping off the plate like bad grease. I’m tickled you think I’m on a 3:30 factory clock, but this Butter's too busy spreading common sense and locking down the net to care. No need to hide behind my avatar—it’s just me, serving up reason while you’re out there sniffing buttery breezes. Speaking of, who’s greasing your tuchus, champ? Not me—I’m not into your backdoor buffet, so keep that mess off my table.
Pucker baby, pucker…
not wanting to cut Medicaid but wanting to save $ by fixing the loophole, which Biden even saw:The Legal Loophole That Costs Medicaid Billions
How states inflate the cost of Medicaid to get more money from the federal treasury.
March 12, 2025
Medicaid is a broadly popular program that provides medical coverage to low-income Americans through a combination of state and federal funding. More than 60 percent of Americans either know someone who has benefited from Medicaid or have been enrolled themselves, according to health policy think tank FFF. So any talk of altering the program usually meets strong opposition.
Yet few seem to know how the system works, what it costs, or the level of unnecessary spending hidden within its $880 billion annual budget.
One example is a little-known quirk in the Medicaid system that allows states to artificially inflate their Medicaid costs to recoup more federal dollars. The arrangement allows some states to pocket a share of the money paid to them for providing treatment to Medicaid patients.
Here’s how it works.
Medicaid Enrollment and Providers Taxed
57,72012,199,634
Enrollment as of October 2024.
Source: Congressional Research Service and Medicaid.govCreated with Datawrapper
The Loophole
When a Medicaid patient receives a treatment or service, the state pays the doctor, hospital, nursing home, or other provider. The federal government reimburses each state for a portion of its Medicaid expenses. The reimbursement ranges from 50 percent to 76.9 percent depending on the median income level in the state and other factors.
An exception to this exists for people who enrolled through the Medicaid expansion under the Affordable Care Act. For them, the reimbursement rate is 90 percent.
So if a state had a 60 percent reimbursement rate and spent $10 billion on Medicaid services, the federal government would reimburse the state $6 billion.
That’s how the system was designed to work back in 1965, generally speaking.
By the mid-1980s, some states had found a way to increase payments to providers and reimbursement of their own Medicaid costs at the expense of the federal government.
First, medical providers would either voluntarily donate money to a state or pay a tax. The states would then return the amount of the donation or tax, and possibly even more, to the providers through increased reimbursement. Finally, the states would bill the federal government for the apparent increased cost.
In some cases, the providers themselves initiated these arrangements, according to the Congressional Research Service (CRS).
Premium Pick
For example, a hospital might agree to pay the state $10 million in taxes. The state might then increase Medicaid payments to that hospital to $20 million. If the state’s reimbursement rate was 60 percent, it would receive $12 million in federal Medicaid funding.
Together with the tax income, the state would receive $22 million and pay $20 million, netting $2 million for additional Medicaid costs or other purposes.
The arrangement benefits providers by increasing their reimbursement, and the states benefit by reducing their costs or even gaining revenue. The federal government bears the cost of those increases.
Congress debated the issue in 1991.
Lawmakers who favored keeping the arrangement in some form argued that it had become a vital part of state Medicaid funding.
Rep. Raymond McGrath (R-N.Y.) said at the time that doing away with the system would cost his state $500 million in federal matching funds. He predicted “chaos” in the Medicaid system if provider taxes were abolished.
The administration of President George H.W. Bush strongly opposed the taxes in a position statement, saying, “State donation and provider-specific tax programs, if unchecked, will undermine a basic premise of the Medicaid program—that States have a stake in the costs of the program.”
In the end, Congress chose to impose limits on provider taxes and donations.
First, provider donations to the state are strictly limited to prevent abuse. Second, state taxes must meet certain conditions or the state will lose federal funding.
Taxes must apply to all providers in a certain class, such as nursing homes, not just those who serve Medicaid patients. Also, states can’t provide any direct or implied guarantee that they will reimburse providers for the amount of the tax. The limit on provider taxes is 6 percent.
Here’s how the provider tax works today.
Increasing Tax, Dependence
In 2004, 35 states had taxes on medical care providers. Now every state but Alaska taxes some providers, as does the District of Columbia.
And states depend more on tax revenue to fund Medicaid—and other things—according to the Government Accountability Office (GAO).
From 2008 to 2018, the share of states’ Medicaid spending covered by provider taxes grew from 7 percent to 17 percent according to the GAO.
In 2018, states received $63 billion in provider taxes and local government funds, according to GAO estimates. Of that amount, $16 billion (25 percent) was not used to pay providers.
That shifted 5 percent of the cost of Medicaid from the states to the federal government, the GAO estimates. The practice also resulted in lower overall reimbursement to some providers when accounting for their tax payments.
When measured as a percentage of the nation’s gross domestic product, a common measure of the country’s total wealth, the burden of providing Medicaid remained the same for states from 2008 to 2023. While overall spending went up, the economy was growing, too, so state Medicaid spending was essentially flat according to the think tank Paragon Health Institute.
Yet the overall cost of the program increased dramatically, meaning that the federal government paid the entire increase in the cost of the program over that 15-year period, according to Paragon.
Over that same period, the federal government’s share of the total cost of Medicaid grew from 60 percent to 72 percent.
Possible Changes
Republicans, searching for ways to reduce the federal budget deficit, have tasked the House Committee on Energy and Commerce with finding $880 billion in savings over the next 10 years.
Medicaid accounts for 92 percent of the spending that the committee manages, so changes to the program have been discussed.
Lawmakers have floated ideas such as limiting how much the federal government reimburses the states or reducing the percentage of the reimbursement.
House Speaker Mike Johnson (R-La.) said he won’t do either of those things. “We’re talking about finding efficiencies in every program, not cutting benefits for people who rightly deserve them,” Johnson said in a Feb. 26 interview on CNN.
That has caused some lawmakers to eye the provider taxes.
The Congressional Budget Office (CBO), which provides nonpartisan financial assessments to Congress, estimated the impact of altering the provider tax restrictions.
The CBO discovered that eliminating the tax would reduce the federal deficit by $612 billion over 10 years. Reducing the tax to 2.5 percent would reduce the deficit by $241 billion, and lowering it to 5 percent would bring a $48 billion reduction.
Democrats are firmly united in opposing any Medicaid reductions.
“Republicans are trying to enact the largest cut to Medicaid in American history, and we need to keep the pressure on them legislatively and in communities all across the country,” House Minority Leader Hakeem Jeffries (D-N.Y.) said in a video call with Democratic leaders on March 5.
All 47 Democrat and Independent senators signed a letter to Republican leaders in February, arguing that there’s not enough fraud and waste in the program to offset proposed budget cuts.
Unknown Impact
The use of state taxes to boost Medicaid reimbursement has had critics on both sides of the aisle. Former President Joe Biden referred to state taxes on health care providers as a “scam” according to Bob Woodward in his book “The Price of Politics.”
Others have defended the device as a way for cash-strapped states to keep Medicaid going. As the CRS notes, the provider tax helps states increase reimbursement to certain types of providers, such as hospitals and nursing homes.
Use of the tax has tended to increase during and after recessions. “Medicaid provider tax revenue can provide a way for states to continue funding the Medicaid program during times of state budget constraints,” according to CRS.
Yet it’s unclear how much limiting state taxes on health care providers would affect Medicaid.
California has more than 12 million Medicaid enrollees and derives more than 60 percent of its Medicaid funding from the federal government. The state reported that its spending on Medicaid from its general fund decreased by 5.8 percent in 2024. Federal Medicaid payments to California increased 1.9 percent that year.
Eliminating all taxes on health care providers would reduce federal Medicaid payments by about 8 percent over 10 years, according to the CBO. Reducing the tax rate would produce reductions of 0.6 to 3 percent.
adding 'cause that was 'too long'....
“I just don’t think that’s enough money at stake for states to want to cut their [Medicaid] expansion population in light of the total cost of Medicaid expansion,” Niklas Kleinworth of Paragon Health Institute has said.
Kleinworth theorized that states would be more likely to cut funding for what are called social determinants of health. Those can include home modifications, non-medical transportation, and education according to a CMS directive.
“You'll probably see states making their Medicaid programs more efficient,” Kleinworth said.
The true impact is difficult to predict because the total amount of provider tax revenues states use on Medicaid expenditures is not fully known, according to CRS.
Noting that fact, the GAO recommended five years ago that the Centers for Medicare and Medicaid Services collect complete and consistent information on all sources of funding used by states to finance Medicaid, including provider taxes.
As of February, the recommendation has not been implemented.
We feel so blessed to have you to mansplain the MAGA - the current president - and how the 2025 plan works - world to us. Bless your heart.
you didn't read - you do what you always do, reply w/ what you think is a witty comeback.
Once again you prove your impeccable intuition as I absolutely did not read your cut & paste comment. It’s more fun to provide you with what I believe is a witty comeback as what I think when it comes to your comments is all that matters to me.
Bless your heart. 💜
You're proving you're a kid in your mom's basement inept at using AI to come up w/ witty comments
Woh…dude, you got me! I better be careful or mommy will notice I’m downstairs and not in school. AI is such a waste of time when I write my own material.
Surprised Jeffry let his WaPo run this story…
“Elon Musk’s Department of Government Efficiency (DOGE) backed off a plan to scrap telephone services for millions of Americans filing claims with the Social Security Administration, just hours after The Washington Post revealed the sweeping changes.
In a tense Tuesday meeting, DOGE staff grilled SSA officials about phone fraud and proposed shifting all claims processing to online channels and in-person offices, according to The Post.
SSA employees floated possible solutions, but DOGE wasn’t “interested in anything else but defending the decision that they had already made,” a source familiar told the paper. (THAT SOUNDS A LOT LIKE YOU!!!)
The news was met with outrage on Musk’s social media platform X.
“Going after 90-year-old grandmas who can’t drive and don’t have a computer? That’s just low,” New York Governor Kathy Hochul said.
“Gramma and Grampa are already waiting too long for answers about their Social Security,” Sen. Ed Markey wrote. “Now, Elon Musk and DOGE want to close field offices and take away their option to use the phone. This is outrageous.”
Bless your 🖤