Budget reconciliation bill worsens access to care, includes significant health care funding cuts
The One Big Beautiful Bill (OBBB) Act of 2025 (H.R. 1), the massive budget reconciliation bill implementing many of the administration’s top legislative priorities, was signed into law on July 4. The bill includes significant funding cuts and policy changes to Medicaid and the Health Insurance Marketplaces, Medicare physician payment, and medical student loans, among other health care related items:
- Medicaid. The OBBB creates new administrative requirements and conditions on eligibility (including work requirements) for patients seeking to enroll in or maintain Medicaid coverage and restricts states’ ability to use provider taxes to finance their Medicaid programs.
- Access to health insurance coverage through the Affordable Care Act (ACA) marketplaces. The OBBB imposes verification requirements for patients receiving premium tax credits, including pre-enrollment verification requirements that will effectively end automatic re-enrollment for these patients. The OBBB does not address the scheduled expiration of enhanced tax credits at the end of 2025.
- Federal support of medical student loans. The OBBB, in part, removes the ability for medical students to receive Federal Direct Stafford loans and Federal Direct PLUS Loans, caps the amount that can be borrowed for school, and limits federal student loan borrowers to only two repayment options.
- Medicare physician payment reform. The OBBB includes a temporary one-year 2.5% conversion factor update for 2026, replacing the original House bill that called for a 75% MEI inflation update in 2026 followed by annual 10% MEI increase, leaving no permanent, inflation adjusted payment fix.
In a statement issued on July 3, AMA President Bobby Mukkamala, MD, said, “Today is a sad and unnecessarily harmful day for patients and health care across the country, and its impact will reverberate for years. Care will be less accessible, and patients may simply forego seeing their physician because the lifelines of Medicaid and CHIP are severed. This is bad for my patients in Flint, Michigan, and it is devastating for the estimated 11.8 million people who will have no health insurance coverage as a result of this bill. The American Medical Association’s mission is promoting the art and science of medicine and the betterment of public health. This bill moves us in the wrong direction. It will make it harder to access care and make patients sicker. It will make it more likely that acute, treatable illnesses will turn into life-threatening or costly chronic conditions. That is disappointing, maddening, and unacceptable.”
