For months, Republican Sen. Josh Hawley has been one of the loudest voices in his party against any cuts to Medicaid benefits in the reconciliation bill. Now, in what are expected to be the Senate’s critical last days of negotiations, Hawley finally seems open to some Medicaid cuts — even the vast majority of cuts in the reconciliation bill.
Just not the Medicaid provider tax reduction.
“They’ve got to fix this hospital piece of it,” Hawley told NOTUS. “And if they do that, then I think that’d be fine.”
In May, Hawley wrote a notable New York Times op-ed titled “Don’t Cut Medicaid” that closed by imploring his fellow Republicans to “ignore calls to cut Medicaid and start delivering on America’s promise for America’s working people.”
Now, he’s mostly pivoted to limiting the impact of Medicaid cuts on rural hospitals. It’s significant movement, though he is still a distance from supporting the reconciliation bill at the moment.
Rural hospitals are at risk of losing a substantial chunk of funding from Medicaid cuts in the legislation. On top of the roughly $700 billion in Medicaid reductions in the House bill, according to the Congressional Budget Office, the current Senate bill would gradually decrease the Medicaid provider tax, one of the key ways states pay for Medicaid.
Of course, Hawley doesn’t exactly see the Medicaid cuts in the House bill as “cuts.” In an interview with Fox News on June 18, he said he was “glad that there are no Medicaid benefit cuts” in the bill.
“The work requirements, I’ve always supported. The anti-fraud provisions, I’ve always supported,” Hawley said Tuesday.
Throughout the reconciliation process, Hawley has maintained a distinction between “Medicaid cuts” and “Medicaid benefit cuts,” but reducing how much the federal government pays into Medicaid — one way or another — leaves rural hospitals with a massive funding hole. Hawley knows that.
It’s part of the reason why he’s strongly against the Senate’s provider tax decrease, which would wind the tax down from the current 6% ceiling to an eventual 3.5%. The House version of the bill would simply freeze the tax at 6%.
Hawley seems like he could live with that language — or, at least, it’d be preferable to him, just as it’d be preferable to a handful of more moderate Republicans, like Sen. Susan Collins.
But Hawley’s evolving stance on the Medicaid provisions in the bill is a major development for Senate Republicans. All along, he has insisted Republicans shouldn’t cut benefits at all. He even made President Donald Trump promise that the bill wouldn’t cut Medicaid, beyond addressing “waste, fraud and abuse,” before he would support the Senate’s budget.
While Hawley may argue the Medicaid cuts in the legislation aren’t definitionally “cuts,” the effect is the same. There will be less spending on the program, which will mean less money for the rural hospitals he’s concerned with defending.
Even accepting Hawley’s argument on benefit cuts, he seems to have cooled on that stance as well. For instance, earlier in June, he was railing against a copay for Medicaid beneficiaries to see a doctor, likening it to “a sick tax.”
Although he said Tuesday that he’d “love” for the copay to be removed in the Senate bill, he also said “the rural hospital thing is a little more existential at the moment.”
Hawley is aware that the reconciliation bill “will reduce the number of people on Medicaid,” as he told reporters weeks ago.
“But I’m for that,” Hawley said, “because I want people who are able-bodied but not working to work.”
For Hawley, Medicaid is important because it’s the only option for many in his state of Missouri. Close to 1.3 million Missourians are on Medicaid, which is 21% of the state’s population. Half of them are children.
“Most of these people are working people,” Hawley told NOTUS. “They’re on Medicaid not because they’re sitting around at home. They’re on Medicaid because they don’t have a job that gives them health care and they cannot afford to buy it on the exchange. And I just think it’s wrong to take away health care coverage from those folks.”
But besides the provider tax, the Senate bill keeps or even expands the House’s Medicaid cuts, with the Congressional Budget Office estimating that the House legislation would cause 10.3 million people to eventually lose Medicaid benefits.
At this point, the primary sticking point is the Medicaid provider tax. It’s clear the Senate’s reconciliation bill will make Medicaid cuts. And adding some rural hospital funding provision, whether through a special fund or by adopting the House’s language, is likely essential to getting his vote.
Hawley does have some significant wins in the reconciliation bill. For instance, Hawley secured provisions amending the Radiation Exposure Compensation Act to include Missouri residents affected by nuclear waste.
As GOP leaders scramble to find the votes for their reconciliation bill, there are still plenty of moving pieces. Adjusting the Medicaid provider tax, or creating some rural hospital fund, seems to be one of the last major hurdles, which is key to Hawley.
About 40% of hospitals in Missouri are in rural counties, and some are already struggling to make ends meet, he noted.
“I know of 17 that are smaller, have fewer than 25 beds, that are in the red currently, budgetarily,” Hawley said. “I mean, I can’t lose 17 hospitals in Missouri.”
While Hawley supports new money for rural hospitals, it still may not be enough for him or other senators concerned about Medicaid cuts.
“I don’t even know if it’s real. It’s been floated,” Hawley said Monday of the rural hospital fund. “I think that’s a good idea. Is it sufficient? I don’t know.”
If fixing the provider tax problem is all it takes for Senate GOP leaders to get the bill over the line, that seems like a fixable problem.
To some extent, Republicans know they have to address the provider tax anyway. On Tuesday, 16 House Republicans wrote a letter saying they won’t vote for the Senate bill if it contains the provider tax decrease. Eliminating that tax decrease — or at least coming up with a way to soften the effects of it — could clear the path to passage in both chambers.
As Hawley noted, leaders have to do something to address the issue.
“They’ve got multiplying House problems now,” Hawley said. “I think that’s just because nobody wants all the rural hospitals in their states and districts to close.”
But he said he was “open to any mechanism” that keeps rural hospitals open.
“So I don’t really care how they do it, but they need to figure out a way to get there,” Hawley told NOTUS. “I’m agnostic on how they move stuff around.”
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Helen Huiskes is a NOTUS reporter and an Allbritton Journalism Institute fellow.
Ursula Perano, who is a reporter at NOTUS, contributed to this report.