A 50-page menu of options to either reduce or increase federal spending via the budget reconciliation process, reportedly compiled by the House Committee on the Budget, was shared on January 17, 2025 by numerous media outlets. Several of the options briefly summarized in the document are of critical importance to the aging services community.

The menu includes repeal of CMS’s nursing home minimum staffing final rule for a savings of up to $22 billion over 10 years (the typical span of time over which federal budget practitioners assess programs’ costs or savings). “This option would repeal the final rule, ‘Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting.’ The rule was finalized in May 2024 and would impose minimum staffing standards on long-term care facilities, creating an unfunded mandate on critical health care facilities across the country, threatening provider facility closures and patient access to care,” the menu says. LeadingAge has vigorously advocated for the repeal of this infeasible regulation.

Another item–also extremely detrimental to nonprofit aging services providers–on the list: the elimination of tax the exemption for state and local bonds (up to $250 billion in 10-year savings) and the ending of tax preferences for other bonds (for up to $364 billion in 10-year savings). Nonprofits often rely on tax-exempt bond financing to refinance existing debt and for capital projects.

Many other options on the menu also do not have LeadingAge’s support as they would undermine the ability of providers to serve older adults. These menu options include lowering the Medicaid matching rate floor (for up to $387 billion in 10-year savings), establishing Medicaid work requirements (for up to $100 billion in 10-year savings), limiting Medicaid provider taxes by lowering the Medicaid provider tax safe harbor from 6% under current law to 4% from 2026 to 2027 and 3% in 2028 and after (for up to $175 billion in 10-year savings), establishing Medicaid per capita caps (for up to $900 billion in 10-year savings), and ending the Employee Retention Tax Credit for claims submitted after January 31, 2024 (for up to $70-75 billion in 10-year savings).

Undefined options on the menu pique our interest, including an offering of “Unspecified Proposals to Post-Acute Care,” described as a policy that would “facilitate better discharges to post-acute care for patients” that would also cost money. Another undefined policy relates to “Unspecified Proposals to Change [Federal Medical Assistance Percentage] FMAPs.” The menu notes this policy would “rebalance Federal Matching Rates to be more fair to states with more people with lower incomes.”

Another menu option proposes to eliminate nonprofit status for hospitals for up to $260 billion in 10-year savings as hospitals would be taxed as ordinary for-profit businesses. LeadingAge is analyzing the full list of more than 200 options and will be working with House and Senate staff to communicate our goals to protect and strengthen the ability of aging services provider to meet the needs of older adults.

Read the menu of budget reconciliation options  here.

Access LeadingAge’s action alert to protect Medicaid funding and access here.