Brendan Williams
As they shape the “big, beautiful bill” President Trump has promised, House Republicans have looked at offsetting tax cut costs through Medicaid cuts. This has drawn blowback from moderate Republicans mindful of polling showing that Medicaid is quite popular with voters. That blowback has resulted in vows from House Speaker Mike Johnson and Trump that Medicaid benefits will not be touched.
However, the House committee overseeing Medicaid is charged with finding $880 billion in savings, and the Congressional Budget Office confirms this cannot be done without huge cuts to Medicaid. How, then, to keep promises that benefits will be untouched? That is the question that worries health care providers nationally and here in New Hampshire.
This worry is because the question’s answer can only be achieved through artifice, by labeling cuts as “reforms.” A principal focus is mechanisms by which Medicaid providers contribute toward care costs through so-called “provider taxes.” In New Hampshire, for example, nursing homes paid $44.7 million in the 2024 state fiscal year in a Nursing Facility Quality Assessment, which, in turn, generates federal funds returned to care through a Medicaid Quality Improvement Program (MQIP).
Some conservatives have disparaged such mechanisms as money laundering, and on April 10 Texas Representative Chip Roy, a hardline conservative Republican, publicly stated he only supported the Senate amendment to the House budget resolution, which passed on a 216-214 party-line vote, based on Trump’s assurances that he would address “the disastrous money laundering schemes” in Medicaid.
Disastrous? What would be disastrous is if Roy and other ideologues cut off a vital funding source for New Hampshire senior care. That is because the state’s Medicaid payments, even with the MQIP, fall far short of covering care costs. How short? First, some math: After disallowing certain costs, the state arrives at a full base rate for each nursing home, based on resident medical data, and then further subtracts 28.76% from that rate because of the limits of what legislators appropriated.
The MQIP partially fills that gap, but in the final quarter of last year, for example, it still left 9.3% of the full rate unfilled. This shortfall was as high as $417,116.07 over three months for one nursing home. Looking at it another way, every nursing home in New Hampshire fell at least $26.13 per resident, per day, short of receiving its full Medicaid rate in the fourth quarter of last year.
We are not so blessed as Rep. Roy and his fellow ideologues. While the federal government picks up 60% of Medicaid costs in Roy’s Texas, it only pays 50% of them in New Hampshire, and provider taxes ensure a fairer return of our federal tax dollars for the medically needy.
Thus, any new federal restrictions on provider taxes, and a related funding method called ProShare involving only our county-owned nursing homes, would further widen the gap between nursing home costs and payments, resulting in facility closures if the state cannot come up with more revenue to make up for federal cuts. This seems the most likely outcome, given that new taxes are viewed as abominations in our state.
And not only nursing homes would be affected. Since 1991, hospitals have paid a Medicaid Enhancement Tax. It is expected to generate $485 million in federal matching funds this year, assuming a dispute is resolved between hospitals and state policymakers over how the funds are spent.
No party to the dispute would disagree that this funding is vital for our state’s health care system. However, the tax by which it is achieved is also in congressional crosshairs, which may cause us to look back at the argument over it in Concord as whistling in the wind. On May 1, Rep. Roy publicly released a letter in which 19 of his fellow hardline House Republicans agreed with his hostage demand on provider taxes.
Congressional Republicans must think hard about creating such disastrous effects for vulnerable people, especially in an aging state like New Hampshire. They would also make the task of governance immeasurably more difficult for governors like Kelly Ayotte who are already struggling with revenue shortfalls.
Brendan Williams is the president and CEO of the New Hampshire Health Care Association.
