The Nuclear Option - How a Last-Minute Amendment Could Obliterate Medicaid Expansion

The Semafor News report reveals a dramatic escalation in the Senate's assault on Medicaid expansion that goes far beyond what we previously analyzed. While the original Senate bill created a punitive two-tier system for expansion states, Senate Majority Leader John Thune is now backing an amendment by Senator Rick Scott that would effectively end Medicaid expansion for all future enrollees starting in 2031.

This represents a seismic shift from penalizing expansion states to potentially eliminating expansion altogether. The Scott amendment would strip away the 90% federal funding match that made Medicaid expansion financially attractive to states, forcing them to cover new expansion enrollees at their regular state Medicaid matching rates—typically between 50-75%. For most states, this would make expansion financially unsustainable.

The political dynamics are revealing. Conservative senators Rick Scott, Mike Lee, Cynthia Lummis, and Ron Johnson withheld their votes on Saturday's procedural motion until securing promises for this amendment vote. Based on publicly reported financial disclosure information, these four senators who are pushing for the elimination of healthcare coverage for millions of low-income Americans have a combined net worth of $290-450 million, with Rick Scott alone accounting for an estimated $200-300 million of that total. Their strategy worked—Thune is now publicly backing what amounts to a poison pill for Medicaid expansion. The Majority Leader's endorsement transforms this from a fringe conservative demand into a serious threat with potential majority support.

The financial mathematics are substantial. Scott's amendment would save $313 billion over the budget window, but that "savings" comes directly from shifting costs to states or eliminating coverage entirely. Consider North Carolina, which just expanded Medicaid and could see hundreds of thousands of residents affected. Under current law, the federal government pays 90% of costs for expansion enrollees. Under Scott's amendment, North Carolina would pay its regular 35% state match, effectively tripling the state's costs for new expansion enrollees after 2031.

This creates a difficult choice for expansion states. They could maintain expansion and absorb substantial new costs, cap enrollment to control expenses, or scale back expansion due to financial constraints. The amendment's 2031 effective date provides time for implementation while ensuring the policy change takes effect in future budget cycles.

The amendment amplifies the inequities we previously identified. Non-expansion states like Texas and Florida would face no new costs since they have no expansion population to affect. Meanwhile, expansion states would confront not just the provider tax cuts and payment rate restrictions from the original bill, but also the prospect of losing federal support for their expansion populations. The combined effect could force states like California, New York, and Pennsylvania to choose between maintaining expansion coverage and maintaining other state priorities.

For hospitals, this represents a significant financial challenge. Expansion reduced uncompensated care by converting uninsured patients into paying Medicaid patients. If states scale back or eliminate expansion due to funding changes, hospitals—particularly safety-net hospitals serving low-income communities—would face increased uninsured patients they're required to treat but may not receive payment for treating. Rural hospitals, already operating on thin margins, could face additional financial pressure. Urban academic medical centers would see their charity care costs increase while dealing with reduced Medicaid payment rates from other provisions in the bill.

Senator Josh Hawley's comments about his party needing "soul-searching" on Medicaid cuts underscore the internal Republican tensions. The fact that Senator Thom Tillis announced his retirement on Sunday amid opposition to the Medicaid cuts suggests these policies face resistance even within the Republican caucus. Yet conservative pressure appears to be driving the agenda toward more aggressive cuts.

The timing of the vote—scheduled for sometime after 2 AM on Monday morning—reflects the compressed timeline Senate leadership is working under to pass the legislation before their self-imposed deadline. Late-night and early-morning votes are common during major legislative pushes, though they limit public attention and media coverage of the proceedings.

The amendment vote represents a critical test of Republican unity. With only three potential GOP defections allowed, senators like Susan Collins of Maine, Lisa Murkowski of Alaska, Bernie Moreno of Ohio, and Josh Hawley of Missouri hold significant influence. Their votes could determine whether Medicaid expansion survives as a policy option for states.

The House dynamics add another layer of complexity. Speaker Mike Johnson may support the amendment, but House Republicans from expansion states could face pressure regarding legislation that would affect their constituents' healthcare coverage. Representatives from states like Ohio, Michigan, and Pennsylvania might find it challenging to support eliminating expansion funding, creating potential complications for final passage.

The Scott amendment transforms the legislation from a restructuring of Medicaid financing into a significant change to expansion policy. Combined with the original bill's changes for expansion states, this represents a substantial shift in Medicaid policy since the program's expansion under the Affordable Care Act. States that expanded coverage based on federal funding commitments would face a policy change that could make maintaining expansion more difficult financially.

For the millions of Americans who gained coverage through Medicaid expansion, the next few hours could determine the long-term sustainability of their coverage. For states, the vote represents a test of federal healthcare policy consistency and whether expansion funding will continue as originally structured. The Scott amendment doesn't just modify expansion state financing—it fundamentally alters the federal commitment to expansion funding for future enrollees.

The policy implications extend beyond healthcare financing. The bill includes tax provisions that primarily benefit higher-income taxpayers, creating a stark contrast between cutting healthcare for low-income Americans while providing tax relief for the wealthy. The irony is particularly sharp given that the four senators driving the healthcare cuts—Scott, Lee, Lummis, and Johnson—have the personal financial resources to afford any healthcare they might need, while the millions of Americans who could lose coverage through their amendment often face difficult choices between medical care and other basic necessities.

Whether enough Republican senators will support this significant policy change remains uncertain, but the consideration of the amendment represents a substantial shift in the Republican approach to Medicaid expansion.

Action Steps for Stakeholders

The early morning vote timing means interested parties have limited time to make their positions known to senators before the vote occurs.

Contact Senate Offices: Constituents can contact their senators' offices through the Capitol switchboard at (202) 224-3121. Senate offices maintain staff during voting sessions to receive constituent calls and messages.

Healthcare Sector Response: Hospital systems, medical associations, and healthcare organizations can issue statements and contact senators' offices to communicate their positions on the amendment's potential impact on their operations and patients.

Public Awareness: The timing limits traditional media coverage, making social media and direct communication important channels for informing the public about the vote and its potential consequences.

Focus on Key Senators: Senators from expansion states who have expressed concerns about Medicaid cuts—including Collins, Murkowski, Moreno, and Hawley—are likely to face particular attention from constituents and stakeholders given their potential influence on the outcome.

Policy Documentation: Organizations tracking healthcare policy should document the amendment's provisions and potential impacts for future analysis and public education, regardless of the vote outcome.

The vote will determine whether the federal commitment to Medicaid expansion funding continues as currently structured or changes significantly starting in 2031. The outcome will have lasting implications for state healthcare policy, hospital finances, and coverage for millions of Americans who rely on expanded Medicaid benefits.

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