The tax and spending legislation the House voted to send to President Donald Trump’s desk on Thursday, enacting much of his domestic agenda, cuts federal health spending by about $1 trillion over a decade in ways that will jeopardize the physical and financial health of tens of millions of Americans.
The bill, passed in both the House and the Senate without a single Democratic vote, is expected to reverse many of the health care gains made during the Biden and Obama administrations. Their policies made it easier for millions of people to access healthcare and reduced the U.S. uninsured rate to record lows. However, Republicans say the trade-off was far higher costs borne by taxpayers and increased fraud.
Under the legislation Trump’s expected to sign on Friday, Independence Day, reductions in federal support for Medicaid and Affordable Care Act marketplaces will cause nearly 12 million more people to be without insurance by 2034, the Congressional Budget Office estimates. That, in turn, is expected to undermine the finances of hospitals, nursing homes, and community health centers, which will have to absorb a greater share of the cost of treating uninsured individuals. Some may reduce services and employees or close altogether.
Here are five ways the GOP’s plans may impact healthcare access.
Need Medicaid? Then Get a Job
The deepest cuts to health care spending come from a proposed Medicaid work requirement, which is expected to end coverage for millions of enrollees who do not meet new employment or reporting standards.
In 40 states and Washington, D.C., all of which have expanded Medicaid under the Affordable Care Act, some Medicaid enrollees will have to regularly file paperwork proving that they are working, volunteering, or attending school at least 80 hours a month, or that they qualify for an exemption, such as caring for a young child. Regulators expect the new requirement to take effect as early as January 2027.
The bill’s requirement doesn’t apply to people in the 10 largely GOP-led states that have not expanded Medicaid to nondisabled adults.
Health researchers say the policy will have little impact on employment. Most working-age Medicaid enrollees who don’t receive disability benefits already work or are looking for work, or are unable to do so because they have a disability, attend school, or care for a family member, according to KFF, a health information nonprofit that includes KFF Health News, the publisher of California Healthline.
Administrative issues have plagued state experiments with work requirements, causing eligible enrollees to lose coverage due to paperwork problems and leading to budget overruns. Georgia’s work requirement, which officially launched in July 2023, has cost more than $90 million, with only $26 million of that spent on health benefits, according to the Georgia Budget & Policy Institute, a nonpartisan research organization.
“The hidden costs are astronomical,” said Chima Ndumele, a professor at the Yale School of Public Health.
Less Cash Means Less Care in Rural Communities
Belt-tightening measures that target states could result in reduced health services, fewer medical professionals, and even hospital closures, particularly in rural communities.
The GOP’s plan curtails a practice, known as provider taxes, that nearly every state has used for decades to increase Medicaid payments to hospitals, nursing homes, and other providers, as well as to private managed-care companies.
States often use the federal money generated through taxes to pay the institutions more than Medicaid would otherwise pay. Medicaid generally pays lower fees for care than Medicare, the program for people over 65 and those with specific disabilities, as well as private insurance. But thanks to provider taxes, some hospitals are paid more under Medicaid than Medicare, according to the Commonwealth Fund, a health research nonprofit.
Hospitals and nursing homes claim that they utilize these additional Medicaid dollars to expand or introduce new services and enhance care for all patients.
Rural hospitals typically operate on thin profit margins and rely on Medicaid payments to sustain them. Researchers from the Cecil G. Sheps Center for Health Services Research, who examined the original House version of the bill, concluded that it would push more than 300 rural hospitals — many of them in Kentucky, Louisiana, California, and Oklahoma — toward service reductions or closure.
Republicans in the Senate added a $50 billion fund to the legislation to mitigate the impact on rural hospitals. Officials will begin distributing the money in 2027 and continue for five years.
Harder To Get and Keep ACA Coverage
For those with Obamacare plans, the new legislation will make it harder to enroll and to retain their coverage.
ACA marketplace policyholders will be required to update their income, immigration status, and other information each year, rather than be allowed to automatically reenroll — something more than 10 million people did this year. They’ll also have less time to enroll; the bill shortens the annual open enrollment period by about a month.
People who apply for coverage outside that period — for example, after losing a job or other insurance, or needing to add a newborn or spouse to an existing policy — will have to wait until officials process all their documents before they receive government subsidies to help pay their monthly premiums.
Today, they receive up to 90 days of premium assistance during the application process, which can take several weeks.
Republican lawmakers and some conservative policy think tanks, including the Paragon Health Institute, argue that the changes are necessary to reduce fraudulent enrollments. In contrast, opponents say that they represent Trump’s best attempt to repeal Obamacare.
The legislation also does not call for an extension of more generous premium subsidies put in place during the COVID pandemic. If Congress doesn’t act, those enhanced subsidies will expire at year’s end, resulting in premiums rising by an average of 75%next year, according to KFF.
On Medicaid? Pay More To See Doctors
Many Medicaid enrollees can expect to pay more out-of-pocket for appointments.
Trump’s legislation requires states that have expanded Medicaid to charge enrollees up to $35 for some services if their incomes are between the federal poverty level (this year, $15,650 for an individual) and 138% of that amount ($21,597).
Medicaid enrollees often don’t pay anything when seeking medical services, as studies have shown that charging even small copayments prompts low-income individuals to forgo needed care. In recent years, some states have added charges under $10 for certain services.
The policy won’t apply to people seeking primary care, mental health care, or substance abuse treatment. The bill allows states to enact even higher cost-sharing for enrollees who seek emergency room care for non-emergencies. However, if Medicaid patients fail to pay, hospitals and other providers may be left to cover the costs.
Cuts for Lawfully Present Immigrants
The GOP plan could cause at least hundreds of thousands of immigrants who are lawfully present — including asylum-seekers, victims of trafficking, and refugees — to lose their ACA marketplace coverage by cutting off the subsidies that make premiums affordable. The restriction won’t apply to green-card holders.
Because the immigrants who will lose subsidies under the legislation tend to be younger than the overall U.S. population, their exit would leave an older, sicker, and more costly population of marketplace enrollees, further increasing marketplace premiums, according to marketplace directors in California, Maryland, and Massachusetts, as well as health analysts.
Taking health care access away from immigrants living in the country legally “will do irreparable harm to individuals we have promised to protect and impose unnecessary costs on local systems already under strain,” John Slocum, executive director of Refugee Council USA, an advocacy group, said in a statement.
The bill reflects the Trump administration’s restrictive approach to immigration. However, because it ran afoul of Senate rules, the legislation doesn’t include a proposal that would have reduced federal Medicaid payments to states, such as California, that use their funds to cover immigrants without legal status.
SOURCE: Story by Phil Galewitz, Julie Appleby, Renuka Rayasam, and Bernard J. Wolfson | California Healthline