Senate passes megabill, includes sweeping cuts to Medicaid, ACA

The Senate passed its version of what is called the “big beautiful bill” that includes deep cuts to Medicaid while allowing the enhanced Affordable Care Act tax credits to expire at the end of this year.

The Senate 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 at the end of the year. The Senate bill does not renew these, potentially increasing the uninsured rate.

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.