President Donald Trump on Friday signed Republicans’ major tax and domestic policy bill into law, setting into motion massive cuts to Medicaid that could remove millions of people from the safety-net insurance coverage.
The legislation was sent to Trump’s desk on Thursday, after months of rancorous debate in Congress. The Senate narrowly passed its version of the bill earlier in the week, calling in Vice President JD Vance to cast the tie-breaking vote.
House Republicans then scrambled to get their caucus in line, as moderates raised concerns about the Senate’s steeper cuts to Medicaid and conservatives lambasted the legislation’s growing contribution to the national debt.
But the lower chamber ultimately voted to pass the megabill 218 to 214, nearly entirely along party lines. Only two Republicans, Reps. Thomas Massie of Kentucky and Brian Fitzpatrick of Pennsylvania, declined to support the legislation.
GOP lawmakers cheered its passage last Thursday. Rep. Brett Guthrie, R-Ky., chairman of the House Committee on Energy and Commerce, said the law “strengthens Medicaid for those who need it most.”
Here are some of the healthcare provisions in the law:
- Medicaid work requirements. Some beneficiaries in the safety-net insurance program — including childless adults and those with children older than 14 — would need to work, volunteer or go to school at least 80 hours a month to stay enrolled.
- Medicaid eligibility. States would be required to check enrollees’ eligibility for the coverage every six months instead of yearly. The law also prevents the HHS from enforcing a regulation that aimed to streamline eligibility and enrollment for Medicaid and the Children’s Health Insurance Program.
- Cost-sharing in Medicaid. Higher-income beneficiaries would have to pay cost-sharing up to $35 per service for some care.
- Provider taxes. The law freezes provider taxes — arrangements states use to finance their share of Medicaid funding — in states that haven’t expanded Medicaid, and gradually lowers allowed rates in expansion states.
- State-directed payments. The arrangements that allow states to make supplemental payments for services covered in Medicaid managed care contracts face new restrictions. The law directs the HHS to revise that payment limit from the average commercial rate to Medicare rates in expansion states, and 10% above the Medicare rate in non-expansion states.
- Affordable Care Act subsidy verification. The law requires pre-enrollment verification of eligibility for premium tax credits that subsidize the cost of health plans on the ACA exchanges.
- Limit immigrant eligibility for Medicare, Medicaid and ACA premium tax credits. Only green card holders and certain classes of immigrants would be eligible for these programs.
- Cut Medicaid funding to Planned Parenthood. The law blocks Medicaid funds for services offered by abortion providers like Planned Parenthood for one year.
- Rural healthcare support. The policy includes a $50 billion fund to help states support providers and hospitals in rural communities.
- Nursing home staffing. The HHS is prohibited from enforcing a Biden-era regulation that would have required long-term care facilities to increase staffing and have a registered nurse on-site.
The Medicaid provisions of the law have been some of the most contentious. The policies reduce federal spending on the safety-net coverage by $1 trillion, according to a Tuesday estimate by health policy researcher KFF.
Nearly 12 million additional people would become uninsured by 2034 under the law, according to an analysis published Saturday by the Congressional Budget Office.
As such, the policies have been lambasted by the healthcare sector. Hospitals worry the growing number of uninsured patients would cause uncompensated care to soar, weighing on their bottom lines.
Rural hospitals and providers that serve large numbers of Medicaid patients would be particularly hard hit, forcing them to cut services to close their doors altogether, experts say.
Dr. Bobby Mukkamala, president of the American Medical Association, said in a statement Thursday the impact from the law “will reverberate for years,” leaving patients sicker with less access to care.
Chip Kahn, president and CEO of the Federation of American Hospitals, urged Congress to take action to mitigate damage from the law’s healthcare provisions by extending enhanced financial assistance for people who buy coverage on the ACA marketplaces, which is set to lapse at the end of the year.
“Time is of the essence,” he said in a Thursday statement. “Without action extending these credits, we will see the gains to health care access and affordability our country has made over the years further evaporate, and too many will not be able to pick up the slack.”
However, medtech trade group AdvaMed said the legislation creates a pro-growth business environment that will help the U.S. medtech industry maintain its global leadership position.
CEO Scott Whitaker lauded the bill’s R&D and capital investment expensing provisions, support for early-stage companies and “competitive” corporate tax rate.
“Supporting policies that lower the cost of doing business and opposing policies that raise the cost are essential to ensuring U.S. medtech’s expanding global leadership role,” Whitaker said.
AdvaMed has repeatedly called for zero-for-zero reciprocal tariffs between the U.S. and its trade partners.
Susan Kelly contributed reporting.
