Data / Federal rules / 2026-02040
Medicaid Program; Preserving Medicaid Funding for Vulnerable Populations-Closing a Health Care-Related Tax Loophole
The Centers for Medicare & Medicaid Services published this final rule in the Federal Register on February 2, 2026. It took effect on April 3, 2026.
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What the agency says
This final rule addresses a loophole in a regulatory statistical test applied to State proposals for Medicaid tax waivers. The test is designed to ensure, as required by statute, that non- uniform or non-broad-based health care-related taxes, authorized under a waiver, are generally redistributive. The inadvertent loophole currently allows some health care-related taxes, especially taxes on managed care organizations, to be imposed at higher tax rates on Medicaid taxable units than non-Medicaid taxable units, contrary to statutory and regulatory intent for health care-related taxes to be generally redistributive. The final rule closes the loophole by finalizing the policies in the proposed rule to add additional safeguards to ensure that tax waivers that exploit the loophole because they pass the current statistical test, but are not generally redistributive, are not approvable. By adding these safeguards, the final rule is also implementing recently added statutory requirements for a tax to be considered generally redistributive.
Key facts
- Document number
- 2026-02040
- Type
- Final rule
- Action
- Final rule
- Agency
- Health and Human Services Department; Centers for Medicare & Medicaid Services
- Published
- February 2, 2026
- Takes effect
- April 3, 2026
- Dates
- These regulations are effective on April 3, 2026.
- Docket
- CMS-2448-F
- Regulation ID (RIN)
- 0938-AV58
- Code of Federal Regulations
- 42 CFR 433
- Topics
- Administrative practice and procedure; Child support; Claims; Grant programs-health; Medicaid
- Significant
- Yes, under Executive Order 12866
- Pages
- 45
Other documents from the Centers for Medicare & Medicaid Services
Everything from the Centers for Medicare & Medicaid Services · Rules on administrative practice and procedure · Rules on child support · Rules on claims · Published in February 2026
Read from the Federal Register API, last updated 2026-10-24. The document on federalregister.gov is the official record; dates and dockets can change through later corrections. Free to reuse with credit to SpecStream under CC BY 4.0.