This bill creates a new tax on large endowments held by specific private colleges and universities to generate revenue.
Medicaid Improvement and State Flexibility Act of 2025This bill authorizes states to approve their own experimental, pilot, or demonstration project under Medicaid if the project provides certain benefits involving electronic benefits transfer (EBT) cards. (Currently, the Centers for Medicare & Medicaid Services approves Medicaid demonstration projects; such projects are also known as Section 1115 Demonstrations.) Specifically, the project must provide enrollees who elect to participate with an EBT card to purchase primary care services; enrollees must receive any remaining balance at the end of the year in the form of a cash payment and must also obtain catastrophic health insurance.
1. This bill imposes a 6 percent tax on the endowments of certain private colleges and universities. 2. Only institutions with endowments over $11.9 billion or $10.5 billion for state-operated colleges are affected. 3. The tax applies starting in the 2025 tax year, impacting financial planning for these institutions. 4. Religious colleges are exempt from this tax under the new law. 5. The revenue from this tax could be used to support educational programs or initiatives.
This bill affects wealthy private colleges and universities with large endowments, as well as their students and faculty.