Medicaid Incentive for 12 GOP States Could End Under Senate Plan

Democrats are mulling whether to rescind billions of dollars meant to encourage states to expand their Medicaid programs, in part to pay for a federal Medicaid-like coverage plan in those states.

The debate about whether to rescind the funds divides some Senate and House Democrats. House aides say the incentive money, which Congress provided in March, should remain available instead of being used to offset part of Democrats’ sweeping social spending and tax package. The new legislation’s federal fallback program for non-expansion states isn’t meant to replace state-run Medicaid programs, they say.

Senate supporters of adding new Medicaid coverage in ...