‘Big, beautiful bill’ rolls back federal support for Medicaid, ACA

House Republicans, in sending what is called “the big, beautiful bill” to President Donald Trump for his signature, slashed Medicaid while allowing the enhanced Affordable Care Act tax credits to expire at the end of this year.

Many analysts call the bill the biggest-ever rollback in federal support for health coverage.

A preliminary estimate from the Congressional Budget Office projects that the bill would reduce federal spending for Medicaid and the Affordable Care Act’s provisions by more than $1 trillion over a decade, resulting in nearly 12 million more people becoming uninsured by 2034.

The bill cuts approximately $930 billion from Medicaid over the next decade, risking coverage loss for roughly 11.8 million adults by 2034. Medicaid recipients who are non-disabled, childless adults aged 19–64 must complete 80 hours per month of work, community service or education in order to remain eligible. In addition, recipients must verify their eligibility every six months.

The bill removes a key funding source for hospitals by lowering the cap on Medicaid “provider taxes” in states that expanded Medicaid under the ACA. The cap is lowered from 6% to 3.5%, phasing down from 2027 to 2031.

It also sharply limits state directed payments by 10% annually until capped at 100% of Medicare rates in expansion states – meaning lower reimbursements. These changes threaten hospital revenue, particularly in rural and low-income areas. Nearly 400 independent rural hospitals in the U.S. could be pushed to the brink of closure, according to a Families USA analysis.

ACA coverage could become more expensive as a result of the bill, with the enhanced ACA tax credits due to expire at the end of the year. The bill does not renew these, potentially increasing the uninsured rate.

The bill also preserves current eligibility rules for health savings accounts and expands HSA benefits. The bill will allow coverage by an ACA bronze or catastrophic plan as the high deductible health plan that must accompany an HSA. In addition, telehealth is now a benefit that will not interfere with HDHP/HSA rules.

Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.