House Republicans are considering upending the way some states fund their Medicaid programs as they scour for ways to find billions of dollars in savings from the health program.
They are looking at states’ practice of taxing health care providers, which allows the states to leverage more Medicaid funding from the federal government. Supporters say that helps states increase rates for underpaid health care providers, but critics say it is akin to legal “money laundering.”
States can use these taxes to pay for their share of Medicaid spending, which the federal government then matches. But critics say the state’s share should come from their general funds, not from health care providers, who ultimately benefit from higher Medicaid spending.
