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President Trump Signs the One Big Beautiful Bill Act

News Article
Jul 14, 2025

After weeks of partisan debate and internal Republican disagreements, President Trump signed the One Big Beautiful Bill Act (H.R. 1) into law on July 4. The sweeping reconciliation package advances many of the President’s top legislative priorities—including an extension of the 2017 tax cuts, defense funding, border security measures, and energy policy—while also making deep cuts to Medicaid, health coverage, and student loan programs.

According to the Congressional Budget Office (CBO), the bill would increase the deficit by $3.3 trillion over the next decade and cut Medicaid by $930 billion, stripping an estimated 17 million Americans of access to essential health care services.

Before landing on the President’s desk, the bill passed the Senate on July 1 by a vote of 51-50, with Vice President JD Vance casting the tie-breaking vote. No Democrats supported the bill, and three Republicans—Senators Susan Collins (R-ME), Rand Paul (R-KY), and Thom Tillis (R-NC)—joined them in opposition. On July 3, the House approved the Senate’s amended version of H.R. 1 by a narrow 218-214 vote, with just two Republicans – Representatives Brian Fitzpatrick (R-PA) and Thomas Massie (R-KY)—voting against the measure alongside Democrats.

Below, we have details on some of the key provisions.

Medicaid

The bill includes provisions that would reduce Medicaid spending, particularly those aimed at restricting enrollment through more frequent eligibility verifications and mandatory reporting work requirements. These changes will take effect on January 1, 2027. The legislation specifies that all adults aged 19 to 64 in the expansion population would be required to demonstrate that they worked, volunteered, or attended school for at least 80 hours in the month prior to enrollment and throughout their time on Medicaid. However, the bill does include an exception for individuals who experienced a short-term hardship event and for those who meet certain exclusions, including being considered medically frail. Additional provisions would require beneficiaries to submit ongoing documentation of eligibility. It is this burdensome paperwork requirement that is expected to trigger the loss of Medicaid coverage for millions of Americans.

Additionally, the bill directs the Department of Health and Human Services (HHS) to cap state directed payments—which are a mechanism to help state close the gaps between Medicaid and other payers—at 100% of the total published Medicare payment rate for states that have adopted Medicaid expansion and at 110% of the total published Medicare payment rate for states that have not expanded. The bill clarifies that grandfathered state-directed payment limits would be reduced by 10 percent annually until the allowable Medicare-related payment limit is reached. These provisions, which would reduce the federal share for the Medicaid program, will result in reduced access for patients if states and providers cannot make up the shortfall.

The bill significantly lowers the current 6% cap on provider tax rates in Medicaid expansion states to 3.5% by 2032. These taxes help states fund their share of Medicaid and draw federal match funds. States can then use those payments to provide more funding to the providers that paid the tax. Recognizing the impact of this change on rural hospitals, the package includes a $50 billion fund to help offset this funding cut.

Medicare

The final bill does include an increase to the Medicare Physician Fee Schedule (MPFS) conversion factor by 2.5% in 2026. Notably, this increase is not tied to the Medicare Economic Index or built into the budget baseline creating a funding cliff in 2027 if Congress fails to provide another funding patch or adopt comprehensive Medicare physician payment in the interim.

Higher Education

The legislation will enact cuts to higher education programs, which will significantly impact medical student borrowers. Specifically, the bill eliminates the Grad PLUS Loan program and income driven repayment plans, beginning July 1, 2026. Additionally, the bill reduces annual and lifetime loan limits for graduate and professional student borrowers. Medical and other professional students will have an annual borrowing limit of $50,000 and an aggregate lifetime limit of $200,000.