Trump wants to expand Medicaid cuts, building on tax cut bill

Tara covers the business of health care. Her stories focus on hospitals, doctors, and how their business practices affect patients — especially when private equity gets involved. She also writes about health insurance and ideas for improving our broken health system. You can reach Tara on Signal at tarabannow.70.

Hospitals and other providers are bracing for an end to the extra money they’ve gotten for treating Medicaid patients, one of the many cuts contained in Republicans’ sweeping 2025 tax law.

But the Trump administration disclosed this week that it plans to take the cuts to state directed payments even further, setting up what’s likely to be a showdown with provider groups. 

Since 2024, some hospitals, doctors, nursing homes, and other types of providers have been reimbursed for Medicaid services at much higher commercial rates, thanks to a Biden-era change. The One Big Beautiful Bill Act, passed in July, directs the Centers for Medicare and Medicaid Services to gradually trim those payments beginning in 2028 until they’re close to or on par with Medicare rates.