Before Memorial Day, the House advanced the One Big Beautiful Bill Act (H.R. 1), the Republicans’ reconciliation package that extends the 2017 tax cuts and provides funding for defense and homeland security while making cuts to Medicaid and other programs. The legislation advanced by a vote of 215-214. Representatives Thomas Massie (R-KY) and Warren Davidson (R-OH) were the only two Republicans to vote with the Democrats against the bill; they opposed the bill’s significant increase in deficit spending.
The legislation cuts approximately $700 billion from the Medicaid program in the next decade with roughly 7.6 million Americans expected to lose coverage. Specifically, the legislation does the following:
- Imposes mandatory Medicare work requirements with individuals between 19-64 years old required to demonstrate that they have worked, volunteered, or attended school for 80 hours each month with certain exceptions. The exceptions cover those who are disabled, caregivers of disabled individuals or a dependent child, medically frail or otherwise has special medical needs as defined by the Secretary and several others;
- Requires states to impose cost sharing of up to $35 per service on the expansion population with incomes 100-138% of the federal poverty level but explicitly exempts primary care, mental health, and substance use disorder services from cost sharing;
- Requires states to verify the eligibility of the expansion population every six months rather than once a year;
- Limits retroactive Medicaid coverage to one month prior to application for coverage;
- Prohibits states from establishing new provider taxes or increasing the amount of existing provider taxes, which is an avenue states use to increase their federal Medicaid match; and
- Reduces the expansion match rate from 90% to 80% for states that provide health coverage or other financial assistance using state funds to undocumented individuals.
Many of these provisions will be effective December 31, 2026.
Of note, the package includes an update to the Medicare Physician Fee Schedule conversion factor. In 2026, the legislation provides for an update equal to 75% of the Medicare Economic Index (MEI). Each year thereafter, the conversion factor update will equal 10% of MEI. The American Medical Association strongly supports this provision because it incorporates an MEI-based update in statute. However, the legislation does not address the 2.83% cut that was implemented on January 1 of this year, and the 2026 update would not be large enough to offset that cut leaving the 2026 conversion factor lower than that in 2024. Additionally, there are concerns that updates equal to 10% of MEI will not keep pace with inflation or address the stagnation in physician reimbursement that has occurred over the last two decades.
Moving forward, this bill will face many challenges and changes in the Senate, as Republican Senators such as Rand Paul (R-KY), Ron Johnson (R-WI), and Rick Scott (R-FL) have already voiced their criticism of the bill. Paul shared his concerns over the high increase to the debt ceiling and stated that he would only consider the bill without this increase, while Johnson and
Scott are looking to find ways to reduce the federal deficits. There are many Republican Senators who have expressed concern about the Medicaid cuts in the House package, including Senators Josh Hawley (R-MO), Susan Collins (R-ME), and Lisa Murkowski (R-AK) are likely to have red lines around what—if any—cuts they will accept in Medicaid. Senate Majority Leader John Thune (R-SD) will have to navigate these and other issues over the next month plus to meet his stated goal of passing the legislation before July 4th.
Please consider contacting your senators today and urge them to oppose cuts to the Medicaid program that may limit access to care for individuals with gynecologic cancers!