What This Bill Does
This bill would reduce the amount of federal money that certain states receive for Medicaid (a health insurance program for low-income people). Specifically, it targets states that require local governments to pay part of the state's Medicaid costs. The bill is called the Property Tax Reduction Act of 2023.
Who It Affects
States that require cities, counties and other local political subdivisions (smaller government units within a state) to contribute money toward Medicaid expenses.
Key Provisions
* The bill only applies to states that received a DSH allotment (a special Medicaid funding amount) for fiscal year 2023 that was more than 6 times the national average amount for all states. (Sec. 2)
* Federal reimbursement to affected states will be reduced by a percentage of the money that local governments are required to contribute. The reduction starts at 25 percent in fiscal year 2025, increases to 50 percent in 2026, 75 percent in 2027, and reaches 100 percent in 2028 and beyond. (Sec. 2)
* Local governments with populations over 5,000,000 that have local income taxes are exempt from this reduction. (Sec. 2)
* Local government contributions for administrative expenses are exempt if the state required those contributions without reimbursement as of January 1, 2023. (Sec. 2)
What Changes
If this bill becomes law, certain states will receive less federal Medicaid funding beginning in fiscal year 2025, based on how much they require local governments to contribute toward Medicaid costs.
Important Definitions
* Political subdivisions: smaller government units within a state, such as cities and counties.
* Medicaid: a federal health insurance program.
* DSH allotment: a special Medicaid funding amount for certain states.
Effective Date
The changes would begin in fiscal year 2025.
I
118TH CONGRESS
1ST SESSION H. R. 1523
To amend title XIX of the Social Security Act to reduce Federal financial
participation for certain States that require political subdivisions to con-
tribute towards the non-Federal share of Medicaid.
IN THE HOUSE OF REPRESENTATIVES
MARCH 9, 2023
Ms. TENNEY (for herself, Mr. LANGWORTHY, Mr. WILLIAMS of New York,
and Ms. STEFANIK) introduced the following bill; which was referred to
the Committee on Energy and Commerce
A BILL
To amend title XIX of the Social Security Act to reduce
Federal financial participation for certain States that
require political subdivisions to contribute towards the
non-Federal share of Medicaid.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Property Tax Reduc-
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tion Act of 2023’’.
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SEC. 2. REDUCTION OF FEDERAL FINANCIAL PARTICIPA-
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TION (FFP) FOR CERTAIN STATES THAT RE-
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QUIRE POLITICAL SUBDIVISIONS TO CON-
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TRIBUTE TOWARD NON-FEDERAL SHARE OF
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MEDICAID.
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Section 1903 of the Social Security Act (42 U.S.C.
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1396b) is amended by adding at the end the following new
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subsection:
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‘‘(cc) REDUCTION IN FFP FOR CONTRIBUTIONS RE-
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QUIRED BY POLITICAL SUBDIVISIONS.—
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‘‘(1) IN GENERAL.—Notwithstanding the pre-
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vious provisions of this section, in the case of a
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State that had a DSH allotment under section
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1923(f) for fiscal year 2023 that was more than 6
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times the national average of such allotments for all
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the States for such fiscal year and that requires po-
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litical subdivisions within the State to contribute
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funds towards medical assistance or other expendi-
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tures under the State plan under this title (or under
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a waiver of such plan) for a quarter in a fiscal year
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(beginning with fiscal year 2025), in determining the
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amount that is payable to the State for expenditures
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in such quarter under subsection (a)(1), other than
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contributions described in paragraph (2), the
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amount of such expenditures shall be reduced by the
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applicable percentage described in paragraph (3),
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•HR 1523 IH
with respect to such fiscal year, of the amount that
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political subdivisions in the State are required to
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contribute under the plan.
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‘‘(2) EXCEPTED
CONTRIBUTIONS.—The con-
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tributions described in this paragraph for a fiscal
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year are the following:
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‘‘(A) Contributions required by a State
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from a political subdivision that, as of the first
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day of the calendar year in which the fiscal year
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involved begins—
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‘‘(i) has a population of more than
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5,000,000, as estimated by the Bureau of
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the Census; and
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‘‘(ii) imposes a local income tax upon
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its residents.
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‘‘(B) Contributions required by a State
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from a political subdivision for administrative
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expenses if the State required such contribu-
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tions from such subdivision without reimburse-
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ment from the State as of January 1, 2023.
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‘‘(3) APPLICABLE PERCENTAGE.—For purposes
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of paragraph (1), the applicable percentage de-
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scribed in this paragraph is—
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‘‘(A) with respect to fiscal year 2025, 25
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percent;
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‘‘(B) with respect to fiscal year 2026, 50
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percent;
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‘‘(C) with respect to fiscal year 2027, 75
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percent; and
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‘‘(D) with respect to fiscal year 2028 and
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each subsequent fiscal year, 100 percent.’’.
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Æ
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