Rep. Gabe Vasquez Works to Remove Republican Tax Bill Provisions Threatening Rural Hospitals

WASHINGTON, D.C. – On July 1, 2025, U.S. Representative Gabe Vasquez (NM-02) led the charge in the House to protect rural hospitals and patients from Republicans’ assault on Medicaid. Rep. Vasquez introduced an amendment to block harmful provisions in the Big Ugly Bill that would slash hospital funding, particularly in rural communities — the top issue raised at a recent Medicaid roundtable he hosted with health care providers and hospital administrators in New Mexico. If the bill passes without Vasquez’s amendment, it will limit state directed payments and ban new provider taxes, gutting the support hospitals rely on to keep their doors open and serve those most in need. 

“This Republican bill will decimate rural health care to pay for tax breaks for the rich,” said Vasquez. “In a state where the vast majority of our hospitals are operating on the brink, this Republican proposal will devastate New Mexico’s Medicaid system and force rural hospitals to shut their doors – that’s a fact, and that comes directly from the providers I have spoken with in my district. I’m doing everything in my power to strip these destructive Medicaid cuts from the bill because our communities can’t afford to lose access to their health care.”

In New Mexico, rural hospitals are often the only source for primary care, dental services, labor and delivery, pediatric care, and more. When those hospitals close, entire communities are left with nowhere to turn for the care they need.

Specifically, Vasquez introduced an amendment to strike sections 71115 and 71116 from the reconciliation bill. 

• Section 71115 would prohibit states from establishing new provider taxes, critical payments that hospitals and states use to reinvest in health care. Without these funds states will be forced to reduce services and  increase state taxes. 
• Section 71116 would limit state directed payments (SDPs) to the Medicare payment rate instead of the average private insurance rate, which better reflects the actual cost of care and is used to ensure that quality providers stay in rural areas. 

Taken together, capping SDPs and ending provider taxes is a death sentence for rural health care. It will force hospitals to cut critical services – like maternity care, mental health care, and emergency rooms – or shut down entirely. 

“If the reconciliation bill passes as-is, the interconnected network of New Mexico's hospitals is at great risk. In this huge state, with these few hospitals, we cannot maintain access to care if rural hospitals are forced to cut services or face closure,” said Troy Clark, New Mexico Hospital Association. “When we talk about state directed payments and provider taxes, these aren't just wonky policy topics — they are a critical part of the Medicaid reimbursement that covers providers’ cost for delivering care to New Mexicans. This has real, tangible impacts on New Mexicans' health and wellbeing.”

Vasquez also introduced an amendment to cap insulin costs at $35 per month for people with private insurance. The Congressman elaborated on his concerns about Republicans’ proposed Medicaid cuts in an op-ed published in the Santa Fe New Mexican earlier this week, calling out the danger of the One Big Beautiful Bill Act. 

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