Senate Bill Tightens Medicaid Rules: Humana, Cigna, CVS See Medicare Relief

Senate Republicans have moved forward with more severe Medicaid reductions than those approved by the House to support U.S. President Donald Trump's tax legislation.

Unlike the House, the Senate chose not to alter Medicare, which benefits insurers such as Humana (HUM), UnitedHealth Group (UNH), Cigna (CI), Elevance Health (ELV), CVS Health (CVS), Centene (CNC), and Molina Healthcare (MOH).

The proposed Senate draft bill imposes more stringent Medicaid work mandates for parents with teen children and establishes enhanced limitations on state Medicaid funding methods, particularly for states that extended coverage under the Affordable Care Act.

A controversial measure limiting how much states can tax health care providers would hit non-expansion states like Texas and Florida. 

The bill also phases down state Medicaid payments to Medicare rates and includes a $100 million grant program to help implement work requirements.

The proposal maintains higher patient cost-sharing and drops changes to Medicare pharmacy benefit managers (PBMs) that would have impacted companies like CVS and Cigna, although it does ban "spread pricing."

Differences between the House and Senate bills will need to be reconciled before the legislation can proceed.

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