U.S. President Donald Trump, joined by Republican lawmakers, indicators the One, Huge Lovely Invoice Act into regulation on July 04, 2025 in Washington, DC. The regulation contains cuts to funding for Medicaid, meals help and different social security internet applications.
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Docs, hospitals, and well being insurers for weeks issued dire warnings to Republican lawmakers that hundreds of thousands 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 following day.
The regulation’s passage marked a uncommon political loss for a number of the well being trade’s largest gamers. When unified, docs, hospitals, and insurers have stood among the many strongest lobbying forces in Washington and have an extended observe document of blocking or forcing adjustments to laws that would harm them financially.
However well being trade lobbyists are catching their breath and assessing the injury after Trump’s huge invoice raced by means of Congress in lower than two months with solely Republican votes.
A number of lobbyists provided 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 folks 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 house.
“Members had been extra petrified of Trump issuing a major problem than disappointing native voters who could discover their hospital has to shut or their insurance coverage premium could 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 assist a challenger to run in opposition to 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 could have been dismissed as a result of hospitals, well being facilities, and different well being care supplier teams are seen by Republicans as robust backers of the Inexpensive Care Act, the regulation referred to as Obamacare that is thought of Democrats’ largest home achievement in many years.
The ACA expanded authorities medical health insurance protection to hundreds of thousands of individuals beforehand not eligible. And no Republicans voted for it.
“Hospitals’ assist 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 Group Well being Plans, mentioned her lobbying group spent additional time on Capitol Hill with lawmakers and their staffers, elevating issues about how the laws would imperil well being care protection.
“There was virtually an overriding sense on the a part of Republicans in Congress to ship a serious 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, could have made it simpler for some lawmakers to assist 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 cut back the scope of Medicaid and Inexpensive Care Act market protection after enrollment in each applications 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 specialists 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 power, lawmakers needed to resolve whether or not potential well being protection losses had been extra vital.
It was very completely 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, nonetheless, Kahn mentioned.
Trade lobbying did stop the federal authorities from decreasing its share of spending for states that expanded Medicaid beneath 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 would not change eligibility guidelines for Medicaid nor change its advantages. But it surely does stipulate that states require most Medicaid enrollees who gained protection by way of the ACA’s growth to doc that they work or volunteer 80 hours a month, a provision the Congressional Finances Workplace predicts will result in about 5 million folks 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 additional federal Medicaid funding. This was one other loss for the hospital trade, which has supported the observe as a result of it led to larger funds from Medicaid.
Medicaid typically pays decrease charges for care than non-public insurance coverage and Medicare, this system for folks 65 and older in addition to these with disabilities. However because of supplier taxes, some hospitals are paid extra beneath Medicaid than Medicare, in accordance 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 title to be withheld to keep away from skilled retribution mentioned the message — that some services had used this play to extend their earnings — resonated with GOP lawmakers. “They thought some hospitals had been doing wonderful financially and didn’t wish 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 adjustments to the regulation, he speculated, after the 2026 midterm election and a attainable shift within the steadiness of energy in Congress.
In rural northeastern Louisiana, Todd Eppler, CEO of Desoto Regional Medical Middle, had hoped Congress would go the preliminary Home model of the invoice, which did not embrace cuts to provider-tax funding. However he mentioned any impression on his hospital in Mansfield, positioned in Home Speaker Mike Johnson’s district, will likely be offset by the $50 billion rural well being fund.
“I’m joyful the place we ended up,” Eppler mentioned. “I feel they listened to rural hospitals.”
Hundreds of thousands spent in advertisements in opposition to 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 typically additionally warn of potential job losses. Such arguments usually 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 may be lot of concern that AHA statements had been too tender, too little, and too late,” he mentioned.
AHA helped lead a coalition of hospital organizations that spent hundreds of thousands of {dollars} on tv promoting in opposition to the GOP invoice. Its president and CEO, Rick Pollack, mentioned in an announcement earlier than the Home voted on the laws that the cuts to Medicaid can be a “devastating blow to the well being and well-being of our nation’s most weak residents and communities.”
Pollack mentioned in an announcement to KFF Well being Information that the attraction of tax cuts drove Republican lawmakers to go the regulation.
“Hospitals and well being techniques have tirelessly advocated to guard protection and entry for hundreds of thousands of individuals,” he mentioned. “We are going to proceed to boost these vital points to mitigate the consequences 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 applications. Its president, Bobby Mukkamala, mentioned in a July 1 assertion that the adjustments “will shift prices to the states and particularly to physicians and hospitals to supply 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 finally included a one-time 2.5% Medicare pay bump for docs in 2026. This wasn’t a victory as a result of it neglected the Home model’s everlasting cost repair that will have tied physician pay to the medical inflation charge. Mukkamala famous the short-term carry however described it as falling “far brief of what’s wanted to protect entry to take care of America’s seniors.”
Joe Dunn, chief coverage officer on the Nationwide Affiliation of Group Well being Facilities, mentioned his group labored relentlessly this yr to forestall deeper Medicaid cuts that will financially harm nonprofit clinics. Well being middle directors visited Washington in February, made hundreds of telephone 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 needed to complete the invoice. “They went in a course that happy the president’s timelines and objectives,” 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 applications at KFF.
