U.S. President Donald Trump, joined by Republican lawmakers, indicators the One, Massive Stunning Invoice Act into regulation on July 04, 2025 in Washington, DC. The regulation consists of cuts to funding for Medicaid, meals help and different social security web packages.
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Docs, hospitals, and well being insurers for weeks issued dire warnings to Republican lawmakers that tens of millions of individuals would lose well being protection and hospitals would shut in the event that they minimize Medicaid funding to assist pay for President Donald Trump’s large tax and spending invoice.
However Republicans ignored these pleas, made even deeper cuts, and despatched the laws to the White Home on July 3, the place Trump signed it the subsequent day.
The regulation’s passage marked a uncommon political loss for among the well being trade’s greatest gamers. When unified, docs, hospitals, and insurers have stood among the many strongest lobbying forces in Washington and have a protracted observe document of blocking or forcing modifications to laws that might damage them financially.
However well being trade lobbyists are catching their breath and assessing the injury after Trump’s huge invoice raced by Congress in lower than two months with solely Republican votes.
A number of lobbyists supplied numerous causes for being unable to stave off large cuts to Medicaid, the $900 billion state-federal medical health insurance program that covers low-income and disabled individuals and accounts for 19% of all spending on hospital care. . However practically all agreed that GOP lawmakers had been extra fearful about angering Trump than dealing with backlash from native hospitals and constituents again residence.
“Members had been extra afraid of Trump issuing a major problem than disappointing native voters who might discover their hospital has to shut or their insurance coverage premium might go up,” mentioned Bob Kocher, a associate with enterprise capital agency Venrock who served within the Obama administration, referring to election primaries main into the midterms coming in 2026.
Think about what occurred to Sen. Thom Tillis (R-N.C.). After he took to the Senate ground to announce his opposition to the invoice due to its cuts to Medicaid, Trump threatened to help a challenger to run towards Tillis subsequent yr. Shortly thereafter, Tillis introduced his retirement from politics.
Bitter emotions over the ACA
However different components had been at work.
The well being trade’s warnings to lawmakers might have been dismissed as a result of hospitals, well being facilities, and different well being care supplier teams are seen by Republicans as sturdy backers of the Reasonably priced Care Act, the regulation generally known as Obamacare that is thought of Democrats’ greatest home achievement in a long time.
The ACA expanded authorities medical health insurance protection to tens of millions of individuals beforehand not eligible. And no Republicans voted for it.
“Hospitals’ help of the ACA has pissed off Republicans, and consequently there’s much less a reservoir of goodwill to hospitals than prior to now,” Kocher mentioned.
Ceci Connolly, chief govt of the Alliance of Neighborhood Well being Plans, mentioned her lobbying crew spent further time on Capitol Hill with lawmakers and their staffers, elevating issues about how the laws would imperil well being care protection.
“There was nearly an overriding sense on the a part of Republicans in Congress to ship a significant victory for President Trump,” she mentioned. Her group represents well being plans that present protection in about 40 states. “That outmoded a few of their issues, reluctance, and hesitation.”
Connolly mentioned she repeatedly heard from GOP lawmakers that the main target was on delivering on Trump’s marketing campaign promise to increase his 2017 tax cuts.
She mentioned the issues of some reasonable members helped result in one concession: a $50 billion fund to assist rural hospitals and different well being suppliers.
The cash, she mentioned, might have made it simpler for some lawmakers to help a invoice that in whole cuts greater than $1 trillion from Medicaid over a decade.
Lobbying succeeded in some methods
One other twist: Many new lawmakers had been clearly nonetheless studying about Medicaid, she mentioned.
Republicans additionally appeared keen to scale back the scope of Medicaid and Reasonably priced Care Act market protection after enrollment in each packages soared to document ranges in the course of the pandemic and the Biden administration, she mentioned. Trump’s regulation requires states to confirm eligibility for Medicaid at the very least each six months and ends auto-enrollment into market plans — steps well being coverage consultants says will reverse a few of these good points.
Charles “Chip” Kahn, a longtime well being lobbyist and CEO of the Federation of American Hospitals, which represents for-profit hospitals, mentioned the trade’s message was heard on Capitol Hill. However as a result of the invoice handled so many different points, together with tax cuts, border safety, and vitality, lawmakers needed to determine whether or not potential well being protection losses had been extra necessary.
It was very totally different than in 2017, when Republicans tried to repeal Obamacare however failed. Trump’s 2025 measure, Kahn mentioned, is not a well being reform invoice nor a well being invoice.
It “left us with an consequence that was unlucky.”
There have been some successes, nevertheless, Kahn mentioned.
Trade lobbying did stop the federal authorities from decreasing its share of spending for states that expanded Medicaid underneath the ACA. Hospitals and different Medicaid advocates additionally persuaded Congress to not cap this system’s open-ended federal funding to states. Each measures would have tallied billions extra in extra Medicaid funding cuts.
The brand new regulation does not change eligibility guidelines for Medicaid nor change its advantages. However it does stipulate that states require most Medicaid enrollees who gained protection by way of the ACA’s enlargement to doc that they work or volunteer 80 hours a month, a provision the Congressional Finances Workplace predicts will result in about 5 million individuals shedding protection by 2034.
Supplier tax cuts delayed
The regulation additionally limits states’ use of a decades-old system of taxing well being suppliers to leverage further federal Medicaid funding. This was one other loss for the hospital trade, which has supported the apply as a result of it led to larger funds from Medicaid.
Medicaid usually pays decrease charges for care than personal insurance coverage and Medicare, this system for individuals 65 and older in addition to these with disabilities. However attributable to supplier taxes, some hospitals are paid extra underneath Medicaid than Medicare, in line with the Commonwealth Fund, a well being analysis nonprofit.
Kahn credit the Paragon Well being Institute, a conservative suppose tank, and its CEO Brian Blase for pushing the argument that supplier taxes amounted to legalized “cash laundering.” Blase suggested Trump on well being coverage in his first time period.
One hospital govt who requested for his identify to be withheld to keep away from skilled retribution mentioned the message — that some amenities had used this play to extend their earnings — resonated with GOP lawmakers. “They thought some hospitals had been doing wonderful financially and didn’t need to reward them,” he mentioned.
Nonetheless, Kahn, who’s retiring on the finish of the yr, mentioned he was happy the Senate delayed implementation of the supplier tax cuts till 2028. That can give the well being trade an opportunity to push for modifications to the regulation, he speculated, after the 2026 midterm election and a potential shift within the steadiness of energy in Congress.
In rural northeastern Louisiana, Todd Eppler, CEO of Desoto Regional Medical Heart, had hoped Congress would cross the preliminary Home model of the invoice, which did not embody cuts to provider-tax funding. However he mentioned any impression on his hospital in Mansfield, situated in Home Speaker Mike Johnson’s district, shall be offset by the $50 billion rural well being fund.
“I’m joyful the place we ended up,” Eppler mentioned. “I believe they listened to rural hospitals.”
Tens of millions spent in adverts towards the invoice
Hospitals have argued for many years that any cuts in federal funding to Medicaid or Medicare would hurt sufferers and result in service reductions. As a result of hospitals are normally one of many largest employers in a congressional district, trade leaders usually additionally warn of potential job losses. Such arguments sometimes give lawmakers pause.
However this time round, that message had little traction.
One well being trade lobbyist, who requested to not be recognized to talk candidly with out risking skilled repercussions, mentioned there was a way on Capitol Hill that hospitals may stand up to the funding cuts.
However there’s additionally a perception that commerce teams together with the American Hospital Affiliation, the biggest hospital trade lobbying group, may have been more practical. “There’s lot of concern that AHA statements had been too delicate, too little, and too late,” he mentioned.
AHA helped lead a coalition of hospital organizations that spent tens of millions of {dollars} on tv promoting towards the GOP invoice. Its president and CEO, Rick Pollack, mentioned in a press release earlier than the Home voted on the laws that the cuts to Medicaid could be a “devastating blow to the well being and well-being of our nation’s most weak residents and communities.”
Pollack mentioned in a press release to KFF Well being Information that the enchantment of tax cuts drove Republican lawmakers to cross the regulation.
“Hospitals and well being programs have tirelessly advocated to guard protection and entry for tens of millions of individuals,” he mentioned. “We are going to proceed to boost these crucial points to mitigate the results of those proposals.”
The nation’s largest commerce group for docs, the American Medical Affiliation, additionally opposed the funding cuts to Medicaid and different federal well being packages. Its president, Bobby Mukkamala, mentioned in a July 1 assertion that the modifications “will shift prices to the states and particularly to physicians and hospitals to offer uncompensated care at a time when rural hospitals and doctor practices are struggling to maintain their doorways open.”
However the AMA was additionally centered on securing larger Medicare charges for docs. The regulation in the end included a one-time 2.5% Medicare pay bump for docs in 2026. This wasn’t a victory as a result of it unnoticed the Home model’s everlasting cost repair that will have tied physician pay to the medical inflation charge. Mukkamala famous the momentary raise however described it as falling “far quick of what’s wanted to protect entry to look after America’s seniors.”
Joe Dunn, chief coverage officer on the Nationwide Affiliation of Neighborhood Well being Facilities, mentioned his group labored relentlessly this yr to forestall deeper Medicaid cuts that will financially damage nonprofit clinics. Well being middle directors visited Washington in February, made hundreds of cellphone calls, and despatched emails to members of Congress.
One payoff was that the well being facilities had been exempted from the regulation’s requirement that suppliers cost some Medicaid enrollees as much as $35 copayments for providers.
However on the finish of the day, Dunn mentioned, many GOP Home and Senate members merely wished to complete the invoice. “They went in a route that glad the president’s timelines and targets,” he mentioned.
KFF’s chief Washington correspondent Julie Rovner contributed to this report.
KFF Well being Information is a nationwide newsroom that produces in-depth journalism about well being points and is among the core working packages at KFF.
