Families USA Submits Comments On Medicaid Program; Amending the Indirect Hold Harmless Threshold of Health Care Related Taxes

In response to this proposed rule from the Centers for Medicare & Medicaid Services (CMS) Families USA submitted comments outlining a deep concern about current federal efforts to impede states' abilities to adequately fund their state Medicaid programs, thus forcing cuts to coverage and care to millions of Americans. Public Law 119-21 (referred to by several different names including the Working Families Tax Cut legislation but referred to as "H.R. 1" throughout this comment letter) imposes major new restrictions on states' ability to generate revenue through provider taxes. CMS' Notice of Proposed Rulemaking (NPRM) proposes to restrict provider taxes even further than required by - or permissible under - H.R. 1 by extending funding restrictions to new tax types and narrowing states' abilities to comply with provider tax limits, which would force major cuts and impacts to key health agencies and functions well beyond Medicaid. Families USA urges CMS to make significant changes to this proposal before finalizing the rule, including withdrawing portions of the rule that are not permissible by statute.

Limiting states' ability to raise the funds they need to cover Medicaid expenses is just another way for the federal government to cut its support for state Medicaid programs, weaking a lifeline for more than 75 million Americans. The provider tax restrictions required under H.R. 1 (the budget bill) slash federal funding to states without addressing underlying health care costs for consumers and state programs. Now CMS' proposed rule would narrow state funding options - in ways clearly beyond its authority - at a time when states are already navigating significant Medicaid budget shortfalls and fiscal uncertainty post-H.R. 1.