U.S. President Donald Trump, joined by Republican lawmakers, indicators the One, Massive Lovely Invoice Act into legislation on July 04, 2025 in Washington, DC. The legislation consists of cuts to funding for Medicaid, meals help and different social security internet packages.
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Medical doctors, hospitals, and well being insurers for weeks issued dire warnings to Republican lawmakers that tens of millions of individuals would lose well being protection and hospitals would shut in the event that they lower Medicaid funding to assist pay for President Donald Trump’s massive 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 legislation’s passage marked a uncommon political loss for a number of the well being business’s largest gamers. When unified, medical doctors, hospitals, and insurers have stood among the many strongest lobbying forces in Washington and have a protracted monitor document of blocking or forcing adjustments to laws that would harm them financially.
However well being business lobbyists are catching their breath and assessing the harm after Trump’s large invoice raced via Congress in lower than two months with solely Republican votes.
A number of lobbyists supplied varied causes for being unable to stave off massive 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 anxious about angering Trump than dealing with backlash from native hospitals and constituents again residence.
“Members had been extra petrified of Trump issuing a main problem than disappointing native voters who might discover their hospital has to shut or their insurance coverage premium might go up,” stated Bob Kocher, a accomplice with enterprise capital agency Venrock who served within the Obama administration, referring to election primaries main into the midterms coming in 2026.
Contemplate what occurred to Sen. Thom Tillis (R-N.C.). After he took to the Senate flooring 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 elements had been at work.
The well being business’s warnings to lawmakers might have been dismissed as a result of hospitals, well being facilities, and different well being care supplier teams are seen by Republicans as sturdy backers of the Inexpensive Care Act, the legislation referred to as Obamacare that is thought-about Democrats’ largest home achievement in a long time.
The ACA expanded authorities medical health insurance protection to tens of millions of individuals beforehand not eligible. And no Republicans voted for it.
“Hospitals’ assist of the ACA has pissed off Republicans, and in consequence there may be much less a reservoir of goodwill to hospitals than prior to now,” Kocher stated.
Ceci Connolly, chief government of the Alliance of Group Well being Plans, stated her lobbying crew spent further time on Capitol Hill with lawmakers and their staffers, elevating considerations about how the laws would imperil well being care protection.
“There was nearly an overriding sense on the a part of Republicans in Congress to ship a significant victory for President Trump,” she stated. Her group represents well being plans that present protection in about 40 states. “That outdated a few of their considerations, reluctance, and hesitation.”
Connolly stated 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 stated the considerations 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 stated, might 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 stated.
Republicans additionally appeared keen to cut back the scope of Medicaid and Inexpensive Care Act market protection after enrollment in each packages soared to document ranges in the course of the pandemic and the Biden administration, she stated. Trump’s legislation requires states to confirm eligibility for Medicaid not less than each six months and ends auto-enrollment into market plans — steps well being coverage consultants 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, stated the business’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 necessary.
It was very completely different than in 2017, when Republicans tried to repeal Obamacare however failed. Trump’s 2025 measure, Kahn stated, is not a well being reform invoice nor a well being invoice.
It “left us with an final result that was unlucky.”
There have been some successes, nonetheless, Kahn stated.
Trade lobbying did forestall the federal authorities from lowering its share of spending for states that expanded Medicaid below 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 further Medicaid funding cuts.
The brand new legislation does not change eligibility guidelines for Medicaid nor change its advantages. But it surely does stipulate that states require most Medicaid enrollees who gained protection through the ACA’s growth to doc that they work or volunteer 80 hours a month, a provision the Congressional Funds Workplace predicts will result in about 5 million folks dropping protection by 2034.
Supplier tax cuts delayed
The legislation additionally limits states’ use of a decades-old system of taxing well being suppliers to leverage further federal Medicaid funding. This was one other loss for the hospital business, which has supported the observe as a result of it led to increased funds from Medicaid.
Medicaid typically pays decrease charges for care than personal insurance coverage and Medicare, this system for folks 65 and older in addition to these with disabilities. However attributable to supplier taxes, some hospitals are paid extra below Medicaid than Medicare, in response to the Commonwealth Fund, a well being analysis nonprofit.
Kahn credit the Paragon Well being Institute, a conservative assume 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 government who requested for his title to be withheld to keep away from skilled retribution stated the message — that some amenities had used this play to extend their income — resonated with GOP lawmakers. “They thought some hospitals had been doing high quality financially and didn’t wish to reward them,” he stated.
Nonetheless, Kahn, who’s retiring on the finish of the yr, stated he was happy the Senate delayed implementation of the supplier tax cuts till 2028. That can give the well being business an opportunity to push for adjustments to the legislation, he speculated, after the 2026 midterm election and a potential shift within the stability of energy in Congress.
In rural northeastern Louisiana, Todd Eppler, CEO of Desoto Regional Medical Middle, had hoped Congress would move the preliminary Home model of the invoice, which did not embody cuts to provider-tax funding. However he stated any influence 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 glad the place we ended up,” Eppler stated. “I feel they listened to rural hospitals.”
Thousands and 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 often one of many largest employers in a congressional district, business 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 business lobbyist, who requested to not be recognized to talk candidly with out risking skilled repercussions, stated there was a way on Capitol Hill that hospitals might face up to the funding cuts.
However there’s additionally a perception that commerce teams together with the American Hospital Affiliation, the most important hospital business lobbying group, might have been more practical. “There’s lot of concern that AHA statements had been too delicate, too little, and too late,” he stated.
AHA helped lead a coalition of hospital organizations that spent tens of millions of {dollars} on tv promoting in opposition to the GOP invoice. Its president and CEO, Rick Pollack, stated in a press release 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 susceptible residents and communities.”
Pollack stated in a press release to KFF Well being Information that the enchantment of tax cuts drove Republican lawmakers to move the legislation.
“Hospitals and well being methods have tirelessly advocated to guard protection and entry for tens of millions of individuals,” he stated. “We are going to proceed to lift these vital points to mitigate the results of those proposals.”
The nation’s largest commerce group for medical doctors, the American Medical Affiliation, additionally opposed the funding cuts to Medicaid and different federal well being packages. Its president, Bobby Mukkamala, stated in a July 1 assertion that the adjustments “will shift prices to the states and particularly to physicians and hospitals to offer uncompensated care at a time when rural hospitals and doctor practices are struggling to maintain their doorways open.”
However the AMA was additionally targeted on securing increased Medicare charges for medical doctors. The legislation in the end included a one-time 2.5% Medicare pay bump for medical doctors in 2026. This wasn’t a victory as a result of it ignored the Home model’s everlasting fee repair that will have tied physician pay to the medical inflation price. Mukkamala famous the momentary raise however described it as falling “far quick of what’s wanted to protect entry to look after America’s seniors.”
Joe Dunn, chief coverage officer on the Nationwide Affiliation of Group Well being Facilities, stated his group labored relentlessly this yr to stop 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 legislation’s requirement that suppliers cost some Medicaid enrollees as much as $35 copayments for providers.
However on the finish of the day, Dunn stated, many GOP Home and Senate members merely needed to complete the invoice. “They went in a route that happy the president’s timelines and targets,” he stated.
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 packages at KFF.
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