U.S. House approves Trump’s tax and spending bill. What it means for Iowa

Doctors, nurses, food bank directors and other social safety net providers across Iowa warn major cuts to public health insurance and food assistance programs could lead to crowded emergency rooms, more rural hospital closures, drained family budgets, overworked providers and reduce care for veterans, seniors and children.

House Republicans on Thursday, following a marathon all-night debate, narrowly passed a massive tax and spending bill as part of President Donald Trump's budget priorities.

All of Iowa's U.S. House members voted to pass President Donald Trump's "one big, beautiful" sweeping reconciliation bill.

The bill includes roughly $4.5 trillion in tax breaks passed during Trump's first term in 2017 that are set to expire this year, while temporarily adding new ones he campaigned on during his 2024 campaign, including no taxes on tips, overtime pay, car loan interest and others.

To make up for some of the lost tax revenue, the bill would cut an estimated $625 billion to Medicaid — the joint federal and state program that helps cover medical costs for low-income individuals, including the elderly and those with disabilities — and $300 billion to the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, over the next 10 years.

The cuts would largely be done by imposing work requirements on many of those receiving benefits. Able-bodied adults age 19-64 without dependents would need to work, volunteer or go to school for 80 hours a month in order to maintain them.

"They're going to keep scrutinizing and rescrutinizing who qualifies," said Patrick Kearns, of Iowa City, who has two adult children with disabilities who depend on Medicaid assistance to live independently. "People are going to get excluded."

The bill also would roll back green energy tax breaks from the Biden-era Inflation Reduction Act and add $350 billion in new spending on border security, mass deportations and defense.

The nonpartisan Congressional Budget Office estimates 8.6 million fewer Americans would receive health care coverage and 3 million fewer people a month would receive food assistance under the proposed changes.

The CBO said the tax provisions would increase federal deficits by $3.8 trillion over the next decade, while the changes to Medicaid, food stamps and other services would lead to $1 trillion in reduced spending. The lowest income households in the U.S. would see their resources drop, while the highest ones would see a boost, it said.

A study done by Penn Wharton Budget Model found that people earning between $17,000 and $51,000 would see on average a $700 reduction in their income after taxes. People reporting less than $17,000 in income would see a reduction closer to $1,000 on average. People earning more, however, would see gains.

The predicted losses are primarily due to the cuts being made across federal agencies, and the benefits many lower-income Americans will see disappear because of them. Penn Wharton's analysis found increased cost of medical bills and food by losing access to programs will be far higher than the amount of money they'll receive through tax cuts.

By contrast, the top 0.1 percent of income earners, including those with incomes over $4.3 million, would gain on average more than $389,000 in after-tax income in 2026, mostly from a boost to corporate profits from extending the 2017 tax cuts, which may improve the value of their investments.

The bill now heads to the U.S. Senate, which is expected to make changes.

Iowa's Miller-Meeks, Hinson praise bill's passage

Iowa U.S. Rep. Mariannette Miller-Meeks, a Republican from Ottumwa and Davenport, voted for the cuts and sits on the Energy and Commerce committee, which played a crucial role in advancing the sweeping legislation to identify hundreds of billion in cuts over the next decade to programs it oversees, including Medicaid.

In a statement and social media post Thursday, Miller-Meeks praised the legislation as "delivering tax relief for Iowa families and small businesses, preserving Medicaid for those for whom it was meant for, and real action to secure the border."

She said it's now time "for the Senate to step up and get this done!"

"As a former small business owner and Army veteran, I know what's at stake," Miller-Meeks said in a statement. "This bill protects Iowa families, seniors, and small businesses while strengthening Medicaid for the vulnerable — not for those who can work and choose not to."

By making the 2017 tax cuts permanent, she said the bill prevents a tax hike for 106,800 Iowa families and small businesses.

Kearns, the Iowa City parent, said Miller-Meeks' office had repeatedly reassured him and his family that there would be no cuts to Medicaid.

"She had a chance to stop it," Kearns said. "She's voting against families like mine and a lot of other families in her district."

He fears his 35-year-old daughter, who has autism but lives independently in an apartment, might be forced to return to Kearns' house, and that his 21-year-old son, who suffered a severe brain injury, might not be able to move into his own apartment as planned.

Kearns also is a 30-year nurse for the Iowa City VA Medical Center, which has suffered staffing cuts since Trump took office. The proposed Medicaid reductions would further affect veterans that require long-term care, he said, and might imperil struggling rural hospitals.

The bill also includes $46.5 billion to revive construction of Trump's wall along the U.S.-Mexico border, and more money to expand detention capacity, hire more immigration enforcement agents and speed up deportations.

Also included are provisions pushed by Miller-Meeks she argues cracks down on "waste, fraud and abuse in Medicaid," and "recommits" those dollars to children, pregnant women, seniors, veterans and people with disabilities.

"Today's vote is a win for Iowa and for every American who believes in work, responsibility and a government that serves its people, not the other way around," Miller-Meeks said.

Iowa U.S. Rep. Ashley Hinson, a Republican from Marion, wrote in a post on X that the bill "will fast-track our country back to prosperity and will be a huge part of President Trump's legacy."

"Iowans overwhelmingly voted for President Trump's America First agenda — ending illegal immigration and preventing dangerous criminals and drugs from entering our communities, cutting wasteful spending and unleashing American energy," Hinson wrote. "Throughout this process, I was proud to champion provisions to help working families keep more of their hard-earned dollars, including expanding the child tax credit, making small business tax cuts permanent, and eliminating taxes on tips."

Democrats contend the legislation will drive up grocery and health care prices for regular Iowans to fund tax breaks for the well-off and well-connected.

Health care workers: Cuts may mean longer wait times, drives for care

Iowa health care officials warn the Medicaid cuts could lead to longer wait times in emergency rooms, longer drives to see health care providers and fewer options for mental health care and OBGYN services in rural areas that are already lacking.

Abby Butler, is a registered nurse at UnityPoint Health — Finley Hospital in Dubuque, and was on Capitol Hill last week to oppose cuts to Medicaid.

Butler, speaking to reporters Wednesday, said the proposed changes to Medicaid could lead to rural hospitals eliminating services or even closing completely.

"Many rural hospitals in Iowa are already currently functioning in a deficit and receive anywhere from 8 to 25 percent of their revenue from Medicaid," she said. "With a decrease in this Medicaid funding, these hospitals may have to cut certain specialty services, such as (obstetrics) services, to be able to operate, which would have serious impacts on pregnant women in rural Iowa."

Proposed cuts to Medicaid also could severely impact Iowa nursing homes, especially those relying on Medicaid reimbursement for a significant portion of their funding, Butler said.

Cuts also could affect seniors with Medicare who rely on Medicaid for long-term care. Medicare generally only covers a limited period of skilled nursing facility care, while Medicaid is a primary payer for ongoing long-term care services, including nursing home stays.

Medicaid covers nearly 40 percent of all births in Iowa, and 50 percent of people who live in nursing homes are enrolled in Medicaid. Iowa also has the highest percentage of nonelderly recipients who need Medicaid to pay for mental health care.

"This could affect people from receiving proper care even with private insurance," Butler said. "We need to remember that patients on Medicaid are not just numbers on the paper. They are people who deserve the right access to health coverage. These cuts will affect everyone in the community, no matter your political stance, income or background. We will all feel, see and hear the effects of these cuts."

States take on more costs for SNAP, Medicaid under federal bill

The proposed changes to SNAP and Medicaid will shift much of the costs to states that will grapple with the additional financial burden of administering the safety net programs, said Chiquita Brooks-LaSure, former administrator of Centers for Medicare & Medicaid Services (CMS) under Democratic former President Joe Biden.

According to the nonprofit health care advocacy and reporting organization KFF, Iowa would lose $518 million in federal Medicaid funding, representing a 25 percent cut to state spending per resident.

That will force states to make tough choices: maintain current spending on Medicaid by raising taxes or reducing spending on other programs; or cut Medicaid spending by covering fewer people, offering fewer benefits or paying providers less, Brooks-LaSure said.

KFF estimates between 64,000 and 107,000 Iowans would lose Medicaid coverage.

Anne Discher, executive director of Common Good Iowa, notes state lawmakers this moth approved a budget that calls for using the state's various surpluses and reserve funds to cover an estimated $917 million budget shortfall. The governor's office anticipates needing to tap surpluses to balance the budget in the foreseeable future due to declining revenues from state income tax cuts, "and that is without taking into account any big Medicaid changes."

Brooks-LaSure, speaking to reporters Thursday, also warned the legislation will destabilize the health insurance marketplace created under the Affordable Care Act and lead to significant increases in premiums and out-of-pocket costs for millions of Americans.

"Both Medicaid and marketplaces are fundamental and foundational in helping millions of Americans live a healthy life, and they are also vital to our economy by keeping our hospitals — especially rural ones — open, and bolstering our health care workforce," she said.

Additionally, requiring states to implement work requirements for low-income adults under Iowa's Medicaid expansion group, will increase barriers to enrolling in and renewing Medicaid coverage, leading to higher rates of Iowans without health insurance coverage, Brooks-LaSure said.

Another KFF analysis estimated around 56,000 people in Iowa would become uninsured under the House bill. The higher uninsured rates among Iowa patients will place increased strain on community health centers and rural health care systems, which are already caring for a higher percentage of uninsured or underinsured patients, Brooks-LaSure said.

She and Butler said past evidence in Georgia and Arkansas shows work requirements are ineffective, costly and disproportionately harm vulnerable populations. They contend the requirements ignore real-world barriers to employment, and ultimately lead to coverage loss for eligible individuals through increased red tape and paperwork required for Medicaid enrollment.

According to KFF, two-thirds of adults on Iowa Medicaid are already working. Among those not working are caregivers, full-time students and Iowans with a chronic health condition or disability that prevents them from working but who do not meet the strict requirements for Social Security Disability Insurance benefits.

About 8 percent of Medicaid adults reported that they are retired, unable to find work, or were not working for another reason.

Additionally, the proposed changes would shift a chunk of SNAP funding from the federal government to states, starting in 2028. The bill also would expand the program's preexisting work requirements to include parents of school-age children and some older adults.

Each state's share of the cost would be calculated according to how often it overpays or underpays program participants. All states would have to shoulder at least 5 percent of the cost, while the most error-prone states would pay 25 percent. The proposal also cuts federal funding states receive to administer the program.

An estimate from the Center on Budget and Policy Priorities found that Iowa would be responsible for at least $26 million of program costs by fiscal year 2028 under changes made in the bill. At the highest share, Iowa would pay an additional $131 million, according to an analysis by the Center on Budget and Policy Priorities.

Such changes would significantly impact Iowa's budget, and likely lead to dramatic cuts in assistance at a time when food insecurity across the state is on the rise and food banks are seeing record demand, said Luke Elzinga, board chair of the Iowa Hunger Coalition and policy and advocacy manager at the DMARC Food Pantry Network.

The federally funded program provides money to more than 40 million people in eligible low-income households — mostly older adults, people with disabilities and families with children — to help buy groceries. About one in 12, or more than 259,000, Iowans were enrolled in SNAP at the end of last year. Of those, 64 percent of SNAP participants are families with children, 35 percent are families with members who are older adults or are disabled, and 50 percent are in working families.

"This will only make food insecurity in the state of Iowa worse," Elzinga said. "There is incredible strain already on food banks and food pantries across the state, and resilience is wearing thin. More Iowa families will experience food insecurity and turn to food pantries already stretched thin and asked to do more with less.

"… This bill is essentially taking from the poor to give to the rich."

Jared Strong of The Gazette contributed to this report.