Congress urged to reject Medicaid cut to pay for student loan bill

The American Hospital Association on June 8 joined eight other national hospital organizations in urging Congress not to restrict states’ use of Medicaid provider assessments as a way to pay for legislation to freeze student loan interest rates. Congressional Republican leaders have proposed, as one offset option, reducing the Medicaid provider assessment threshold from 6% to 5.5% to pay for a one-year extension of a student loan interest rate bill.

“We strongly believe that allowing subsidized student loan interest rates to double beginning July 1 would be devastating to millions of American students and their families,” the groups wrote. “However, the Medicaid program serves more than 59 million people and has been subject to significant cuts at the state level…Because almost all states use some form of provider assessments in order to obtain federal matching funds for their Medicaid programs, such a reduction in Medicaid funding could adversely impact state financing and negatively affect beneficiaries and providers alike.”