In the latest version of President Donald Trump’s budget reconciliation bill, which passed the Senate on Tuesday by a narrow margin, a 10-year moratorium on the staffing mandate remains intact. Provider taxes for nursing homes are also unaffected, though uncertainty about the large Medicaid cuts’ indirect impact worries many in the sector.

The bill passed on Tuesday with a 51-to-50 vote as Vice President J.D. Vance cast the tiebreaking vote after a prolonged standoff over deep cuts to health care programs, including the Affordable Care Act (ACA). If signed into law, the bill could make 11.8 million people uninsured, and would reduce support for the health insurance exchanges by more than $200 billion, the Congressional Budget Office (CBO) estimates.

The current version of the bill includes $900 billion in cuts, mostly to Medicaid, over 10 years, the CBO projects. In order to appease Republicans who had not been on board with the size of the cuts, GOP leaders doubled a proposed relief fund to $50 billion for rural hospitals and community health centers.

And, the revised legislative language on provider taxes continues to exclude nursing homes and intermediate care facilities from the upcoming provider tax reductions. This means these types of long-term care providers will not be subject to the phased-down tax limits that apply to other health care providers.

For states that have expanded Medicaid under the ACA, provider taxes are still set to be reduced from the current federal ceiling of 6% to 3.5%. However, rather than beginning in fiscal year 2027 as previously proposed, the phased reduction will now start in 2028. The reduction will proceed gradually, decreasing the allowable provider tax rate by 0.5% point each year until it reaches the new 3.5% threshold.

This change gives states an additional year to prepare for the fiscal impact, while preserving financial protections for certain long-term care facilities that rely heavily on Medicaid funding.

Shifting of burdens

These Medicaid cuts could also indirectly impact nursing homes if states end up spreading that cut amongst all Medicaid providers, and in the interim, this will create uncertainty, according to Ron Nunziato, senior director of policy and regulatory at the Health Care Council of Illinois.

“There’s a pot of money that comes from the feds to the state for Medicaid [and] the state has to decide, ‘do we want to let those people [previously on ACA] go without health care, or do we want to shore up this program with more state funding?’” Nunziato told Skilled Nursing News. “That’s the fear – we never really know until it’s all done, and how it’s going to affect us and what the state is going to do in response to that cut, or potentially more cuts.”

The so-called One Big Beautiful Bill Act’s passage in the Senate was stalled by 24 hours of debate, procedural delays by Democrats, and tense internal Republican negotiations. The bill now returns to the House of Representatives.

Republican Senators Susan Collins (Maine), Thom Tillis (N.C.), and Rand Paul (Ky.) voted against the bill over concerns about spending cuts and deficit increases. Alaska Senator Lisa Murkowski, who initially opposed the bill due to Medicaid cuts affecting her state, ultimately voted yes but only after intense negotiations even as she expressed serious reservations, saying, “We do not have a perfect bill by any stretch of the imagination. My hope is that the House is going to look at this and recognize that we’re not there yet.”

Democrats, who all voted against the bill along with a few independents, attempted to slow down the vote using procedural tactics, such as forcing the reading of all 940 pages of the bill and proposing numerous amendments during a so-called “vote-a-rama,” in which amendments to the bill were made.

However, none of the accepted amendments during the vote-a-rama impacted the long term care, according to the American Health Care Association and National Center for Assisted Living (AHCA/NCAL). The updated bill now offers a 10-year delay of the federal staffing mandate for nursing homes to pass the Byrd Rule, the organization stated.

Unseen costs

There are other costs to consider in the bill as well.

“This bill is overall incredibly harmful to older adults and the providers who serve them and we would urge a ‘no’ vote in the House. If this bill becomes law, states will see immense requirements and costs shifted into their budgets,” Mollie Gurian, vice president of policy and government affairs at LeadingAge, said in an emailed statement to Skilled Nursing News.

Some of these costs will be associated with development and implementation of IT systems for work requirements, expectations and enhanced eligibility redeterminations, along with administrative efforts to support applicants and enrollees with new policies and procedures, Gurian noted.

“Money out of the health care system doesn’t make health care cheaper – it shifts costs to other payers like private insurance,” Gurian noted. “States will invariably be faced with imposing limits on optional services like home and community-based services, reducing rates paid to providers, or reducing the number of people they are serving.”

And, Gurian has other worries that the latest version of the bill raises for the long-term care population.

“We continue to have concerns that this bill increases the deficit by $3.5 trillion per the CBO. This would trigger mandatory Medicare sequestration, trimming another 4% from Medicare payments during each year of the budget cycle,” she said. “Our aging services members can’t afford compounding reductions in Medicare and Medicaid reimbursements as costs and demand continue to rise.”

Trump had urged Congress to pass the bill by July 4, but it’s uncertain if that deadline will be met as the modified version of the bill is expected to meet some resistance from lawmakers in the House.

The House had previously passed a version of the bill by a single vote, but now must approve the Senate’s revisions. This remains uncertain, according to various media reports, as the Republican majority is slim and the bill faces opposition from both fiscal conservatives, who worry it adds $650 billion annually to the deficit, while others are concerned about the harsh Medicaid cuts.

“Every day is a new day, up until this week, and now this week, it’s like every hour is a new hour,” Nunziato said, referring to the ever-shifting situation before the Senate bill was passed. “Medicaid is front and center [and] and even if the federal government does not cut nursing home reimbursements per se or directly, we don’t know what’s going to happen on the individual state levels.”

The House passed the reconciliation bill on Thursday with the Senate-passed version largely intact. While the bill includes some nursing home-friendly provisions – such as a 10-year delay on the federal staffing mandate and no change on nursing home provider taxes – it introduces sweeping spending cuts that will indirectly impact skilled nursing facilities (SNFs).

Despite initial resistance from Republican lawmakers worried about the bill’s high cost and deep health care cuts, they reversed course after political pressure and amid promises of future executive actions from the White House. Only two Republican Congressmen – Rep. Brian Fitzpatrick of Pennsylvania and Rep. Thomas Massie from Kentucky, remained opposed in the end.