Publications

What’s the Impact of Phasing Provider Taxes down to 3.5% for Medicaid Expansion States?

The Hilltop Institute has released updated analysis of the Medicaid provider tax provisions of the Senate budget reconciliation bill. The estimates, which model the version of the bill released from the Senate Finance committee on June 16, 2025, update Hilltop’s earlier analysis of provider taxes. Authored by Hilltop Director of Analytics & Research Dr. Morgan Henderson, Senior Data Scientist Dr. Leigh Goetschius, and Executive Director Alice Middleton, this analysis uses hospital provider tax rates and net patient revenue data to calculate the estimated state-level impacts of the proposed Senate legislation. The authors find that, once the provider tax reductions are fully implemented as of 2031, this legislation would reduce federal funding to 18 Medicaid expansion states by over $11.9 billion annually. Moreover, the impact will not be uniform: the impact will be largest in states with high hospital provider tax rates. Specifically, the authors find that Arizona, New Hampshire, Nevada, Iowa, Vermont, and Michigan would each at lose least 7.5% of their federal Medicaid funding as a result of this bill.

While the proposed legislation proposes a suite of Medicaid policy changes that would interact in various ways, this analysis only considers the hospital provider tax change in isolation. This is the latest in a series of Hilltop analyses focused on modeling state-level impacts of potential federal Medicaid policy changes.

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What’s the Impact of Eliminating Medicaid Provider Taxes?

This document, written by Hilltop Director of Analytics & Research Morgan Henderson, Senior Data Scientist Leigh Goetschius, and Interim Executive Director Alice Middleton, quantifies the impact of removing the 6% provider tax safe harbor threshold on state-level federal Medicaid funding. Using data on hospital and nursing facility tax rates and net patient revenue, this analysis finds that eliminating the 6% provider tax threshold for hospitals and nursing facilities would put $83.7 billion of federal Medicaid funding at risk.

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Impact of Removing the Medicaid FMAP Floor on Federal Funding for Home and Community-Based ID/DD Services

This one-pager, written by Hilltop Director of Analytics & Research Morgan Henderson, Senior Data Scientist Leigh Goetschius, Director of Aging & Disability Studies Christin Diehl, and Interim Executive Director Alice Middleton, quantifies the impact of removing the 50% Medicaid Federal Medical Assistance Percentage (FMAP) floor on federal spending on Medicaid-funded home and community-based intellectual and developmental disabilities (ID/DD) services in states. The one-pager estimates the federal funding decreases overall and for each of the ten states that would be the most impacted.

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