CHA News

House Committee Votes to Cut Health Care Spending by $25 Billion

Cuts would apply to Medicaid, CHIP and more

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As part of the House budget resolution process, the Energy and Commerce Committee announced earlier today  the Common Sense Savings Act of 2016 (H.R. 4725), legislation introduced by Health Subcommittee Chairman Joe Pitts (R-PA) to reduce the federal deficit by almost $25 billion through cuts to Medicaid, the Children’s Health Insurance Program (CHIP) and the Prevention and Public Health Fund. The legislation, opposed by CHA, would:

  • Eliminate the enhanced federal Medicaid matching funds available for the coverage of prisoners as a result of the Affordable Care Act’s Medicaid expansion.  States would continue to be allowed to receive federal funds for Medicaid coverage for prisoner inpatient services, but at the traditional federal matching rate.
  • Reduce the amount of the non-federal share that can come from providers by gradually reducing the Medicaid provider tax threshold from its current 6 percent of the net patient service revenues to 5.5 percent (the amount that was in place until Oct. 1, 2011).
  • Eliminate the 23 percentage point increase in the CHIP matching rate implemented in the Affordable Care Act.
  • Repeal the Prevention and Public Health Fund, which amounts to more than $14 billion over the next 10 years.
  • Close a loophole in a current statute that has allowed lottery winners to retain taxpayer-financed Medicaid coverage.While the provider tax provision wouldn’t immediately impact the current Medi-Cal hospital fee, the provision sets a dangerous precedent and threatens the program that California hospitals depend on. Representative Lois Capps (D-CA) offered an amendment, which failed, to strike the provider tax provision. H.R. 4725 was passed out of committee along party lines. All four Californians on the committee — Reps. Cardenas, Capps, Eshoo and Matsui — voted no.