Senate Republicans Face Bipartisan Pushback After Parliamentarian Strikes Down Key Medicaid Cuts

Washington, D.C. – Senate Republicans’ efforts to advance sweeping Medicaid cuts as part of their budget reconciliation package have hit a major roadblock, as the Senate parliamentarian ruled that several core provisions—including a crackdown on provider taxes and limits on federal funding for states—violate chamber rules and must be removed or face procedural hurdles.

The rejected measures were designed to generate hundreds of billions in federal savings, primarily by capping the taxes states can levy on Medicaid providers—a mechanism states use to draw down additional federal Medicaid dollars. The savings were intended to help offset the cost of making corporate tax reductions permanent, a central GOP priority. The Senate bill would have gradually reduced the allowable provider tax in Medicaid expansion states from 6% to 3.5% by 2031, a sharper cut than proposed in the House version.

The parliamentarian’s decision has forced Majority Leader John Thune (R-S.D.) to reconsider plans for a vote this week, as opposition mounts from both sides of the aisle. Several Republican senators, including Susan Collins (R-Maine), Josh Hawley (R-Mo.), Lisa Murkowski (R-Alaska), and Jerry Moran (R-Kan.), have warned that the proposed Medicaid cuts could force the closure of rural hospitals and leave millions without coverage. Louisiana, Tennessee, and Missouri alone risk losing tens of billions in federal funding under the plan.

Senator Elizabeth Warren (D-Mass.) and other critics argue the cuts would disproportionately harm low-income Americans while prioritizing corporate tax breaks. “We fought hard and succeeded in striking healthcare reductions from this legislation that would adversely affect Americans who are already struggling economically,” said Senator Ron Wyden (D-Ore.), the top Democrat on the Finance Committee.

To address concerns over rural healthcare access, the Senate Finance Committee proposed a $15 billion stabilization fund for providers, but senators like Collins argue this falls far short of the estimated $100 billion needed to prevent widespread hospital closures.

Supporters of the bill, including some GOP leaders, maintain that the legislation avoids direct benefit cuts and includes tax relief for working families. However, the American Medical Association and other groups warn that the proposed changes would worsen access to care, especially in rural and underserved communities, and could deepen the nation’s physician shortage.

The Senate’s budget reconciliation debate continues amid ongoing negotiations over Medicaid, tax provisions, and other controversial measures. With bipartisan resistance and key provisions ruled out of order, the future of the package—and the fate of millions of Medicaid beneficiaries—remains uncertain.