Medicaid on the Chopping Block: The One Big Beautiful Bill Act's Impact on Healthcare

The House of Representatives passed the fiscal year 2025 budget reconciliation bill, the One Big Beautiful Bill Act, by a razor-thin margin of 215-214. This legislation, championed by President Donald Trump, promises sweeping changes to Medicaid and the Health Insurance Marketplaces, sparking intense debate and concern among healthcare advocates and providers.

The American Hospital Association (AHA) has raised significant alarms about the bill's provisions, particularly the drastic reductions to Medicaid funding. According to AHA President and CEO Rick Pollack, the sheer magnitude of these cuts will have far-reaching consequences for all patients, not just those enrolled in Medicaid. Hospitals, especially those in rural and underserved areas, will face unprecedented financial strain, potentially leading to reduced services, staff cuts, and even closures.

The bill's provisions severely restrict the use of legitimate state funding resources and supplemental payment programs, including provider taxes and state-directed payments. These programs are essential for offsetting decades of chronic underpayments to Medicaid providers. The AHA estimates that the new policies will decimate federal support for Medicaid by more than $700 billion over the next decade, displacing healthcare coverage for millions of Americans and moving them from insured to uninsured status.

The abrupt policy changes outlined in the bill would upend state government budgets and threaten the viability of the healthcare system to provide essential services. Since these changes are effective immediately upon enactment, states will have little or no time to prepare for the significant financial impact on their budgets. This could lead to longer waiting times for care, more crowded emergency departments, and hospitals unable to invest in technology and innovations for clinical care.

The potential long-term effects on patient care and public health outcomes are equally alarming. An estimated ten to fifteen million people could lose their health insurance coverage under the bill. This loss of coverage could result in decreased access to preventive care, mental health services, and treatment for opioid use disorder, all critical components of public health. The bill also includes a ban on coverage for gender-affirming care for adults under the program, which could have negative impacts on the health outcomes of transgender individuals.

The bill's provisions could also lead to a decrease in the quality of care provided to Medicaid beneficiaries and an increase in the number of uninsured individuals, further straining the healthcare system. The AHA urges the House to reject efforts to dismantle these vital programs and preserve healthcare access for the nation's vulnerable and working families.

The bill will now be considered by the Senate, where it is likely to undergo a series of changes before a vote is held. The AHA has sent a Special Bulletin to members that includes the AHA’s statement and highlights changes made to the bill prior to its passage, along with resources to assist with advocacy efforts. A Legislative Advisory was also sent to members that summarizes provisions in the bill impacting hospitals and health systems.



In conclusion, the One Big Beautiful Bill Act's proposed reductions in Medicaid funding pose a significant threat to the financial stability and operational capacity of hospitals, particularly those in rural and underserved areas. The potential long-term effects on patient care and public health outcomes are severe and multifaceted, with millions of Americans at risk of losing their healthcare coverage. The Senate must carefully consider these implications and work to preserve healthcare access for all Americans.