On July 3, the House passed the same version of the federal budget reconciliation bill that was passed by the Senate on July 1. It was signed by President Trump on July 4.
The legislation is expected to end access to healthcare for approximately 17 million Americans, primarily through cuts to Medicaid of nearly $800 billion over 10 years. This could have a significant impact on rural communities and individuals who live in rural areas: they report poorer physical and mental health and have higher rates of poverty. In addition, they often have less access to healthcare services because of provider shortages, and increasingly rural hospitals have closed or are at risk of closing; 68% of Iowa’s hospitals are rural hospitals.
The five biggest sources of Medicaid “savings” in the reconciliation bill include:
- Mandating adults who are eligible for Medicaid through the ACA expansion meet work and reporting paperwork requirements (~$344 billion)
- Repealing the Biden Administration’s rule that simplified Medicaid eligibility and renewal processes (~$167 billion)
- Establishing a temporary suspension on new or increased provider taxes (~$89 billion)
- Revising the payment limit for state-directed payments (~$72 billion)
- Increasing the frequency of eligibility redeterminations for the ACA expansion group from once a year to every six months (~$64 billion)
The federal budget reconciliation bill also changes the longstanding “Free Choice of Provider” provision, which generally allowed Medicaid beneficiaries to obtain services from any provider that is qualified and willing to provide services. The new law prohibits Medicaid funds from being paid to providers that are nonprofit organizations, essential community providers primarily engaged in family planning services or reproductive services, provide for abortions outside of the Hyde exceptions and received $800,000 or more in payments from Medicaid in 2023. This impacts Planned Parenthood and other Medicaid essential community providers and is effective upon enactment for one year. A lawsuit has been filed and a temporary restraining order challenging this provision is in place.
Read more about all of the provisions by visiting KFF, the independent source for health policy research, polling, and news.