The massive budget package passed by the House of Representatives Thursday includes provisions on Medicaid and the Children’s Health Insurance Program (CHIP) that “could create additional administrative burdens for patients,” AMA Executive Vice President and CEO James L. Madara, MD, noted in a May 20 letter to House leadership.
Such hurdles “in these two safety-net programs are a proven barrier to eligible individuals enrolling for coverage, especially given that of the estimated 25.3 million uninsured Americans in 2023, 6.3 million were eligible for Medicaid or CHIP but not enrolled, often due to administrative barriers.”
In his letter (PDF), Dr. Madara wrote that physicians “know that Medicaid is a vital component of America’s health care infrastructure, providing health insurance coverage to millions of patients and serving as a critical safety net for children, pregnant and postpartum women, seniors, and people with disabilities and serious health conditions.”
He added that “Medicaid coverage is associated with improved long-term health, lower rates of mortality, better health outcomes, fewer hospitalizations, better educational outcomes, and greater financial security.” The AMA’s letter goes on to describe the federal-state program as “an indispensable source of coverage for maternal health services, covering over 40% of all births in the United States, including almost 50% of births in rural areas.”
The House budget bill’s provisions “may increase the risk of wrongful denials or disenrollments, disrupting patients’ access to care and potentially affecting the continuity of care physicians strive to provide,” Dr. Madara wrote. The Congressional Budget Office has estimated that 8.7 million people would lose Medicaid coverage under these provisions, and 7.6 million more would be uninsured within 10 years.
In a statement, AMA President Bruce A. Scott, MD, said the AMA is pleased the House budget “bill did not include more severe Medicaid provisions,” including direct cuts to the Federal Medical Assistance Percentage (FMAP) or per-capita caps on the program.
“We remain concerned,” Dr. Scott added, “that many of the Medicaid and ACA [Affordable Care Act] savings provisions will have a significant and negative impact on the ability of eligible individuals to access and maintain coverage. Federal programs should seek to facilitate and maintain enrollment of eligible individuals, not erect bureaucratic barriers to care. As the bill moves forward, we urge the Senate to take the necessary steps to ensure that efforts to address waste, fraud and abuse do not result in millions of patients losing access to coverage. Rural and underserved communities will be most affected by these changes.”
Positive movement on Medicare payments
On Medicare pay, the House budget has provisions that would “provide the first Medicare physician payment update that is permanently built into baseline Medicare rates since the passage of the Medicare Access and CHIP Reauthorization Act (MACRA) in 2015,” Dr. Madara wrote.
The AMA said it “strongly supports” the $8.9 billion in pay updates included in section 44304 of the bill, which tie Medicare physician payment to 75% of the Medicare Economic Index (MEI) that tracks physician practice-cost inflation. The bill’s proposed update for 2026 would amount to a 2.25% boost in Medicare physician payment, which Dr. Madara noted is “significantly higher than any of the annual physician payment updates in MACRA.”
Under current law, Medicare physician pay is set to rise 0.25% in 2026 and top out with a 2.5% annual increase in 2035. If section 44304 of the House budget bill is enacted, doctors would see their annual Medicare payment rise to 4.3% by 2035.
“The AMA appreciates that the bill adopted today addresses the problem of decreasing Medicare payment (PDF) for physician services,” Dr. Scott said in his statement. “Continued cuts threaten access to care for America’s seniors, and the inclusion of an update for 2026 that partially accounts for inflation is an important step. This must, however, represent only the first step to ensuring that Medicare payments keep up with inflation over the long term, as they do for other Medicare providers.”
These provisions in the House bill come after five consecutive years of Medicare physician payment cuts, with the latest being the 2.83% decrease for 2025. These cuts play a key role in triggering a series of systemic factors endangering older adults’ access to care—especially those who live in underserved rural and urban areas. Since 2001, Medicare physician payment has fallen 33% after adjusting for inflation in practice costs.
Decades of declining Medicare physician payment have coincided with a big drop in the sustainability of independent physician practice. While 61% of physicians were practice owners in 2001, by 2016 less than half had ownership stakes in their practices and physician employees have outnumbered physician practice owners since 2018.
“Ensuring regular, adequate payment updates is vital to maintaining practice stability, advancing value-based care models and safeguarding access to care for Medicare beneficiaries, particularly in rural and underserved communities,” says the AMA’s letter to House leadership. “Medical practices in the most rural locations treat four times as many Medicare patients as metropolitan practices. The AMA remains committed to working with Congress to achieve lasting reforms that give patients and physicians the Medicare program they need and deserve.”
The AMA is leading the charge to reform the Medicare payment system.
Dive deeper to learn how Medicare pay cuts:
- Endanger physician practices.
- Threaten patients’ access to care.
- Especially affect rural America.
- Hit solo physician practices hard.
- Put even big medical groups at risk.
Visit AMA Advocacy in Action to find out what’s at stake in reforming Medicare payment and other advocacy priorities the AMA is actively working on.
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Medical student-loan repayment
The AMA also has concerns about other provisions of the House budget bill that relate to medical student loans.
“As currently drafted, this legislation would restrict access to medical school loans and loan forgiveness— a change that could significantly affect the makeup of the physician workforce and where physicians choose to practice,” Dr. Scott said in his statement. “Given the high cost of medical education, most students depend on federal loans to finance their training.”
In his letter to House leadership, Dr. Madara wrote that the AMA is “extremely concerned about the negative ramifications of the overall implementation of this bill and ask that, at a minimum, carveouts are provided for medical school education to ensure that we can continue to educate our next generation of physicians.”
The AMA’s letter notes that about 71% of medical students graduate with an average over $212,000 in educational debt and that cost is the No. 1 reason why otherwise qualified students choose not to pursue medical school.
Section 30002 of the House bill, Dr. Madara wrote, “would base the amount of student loans offered on the median cost of attendance for students enrolled in the same program of study nationally. And section 30011 would eliminate subsidized loans and Federal Direct Graduate (GRAD) PLUS loans, limit parents’ ability to borrow loans on behalf of their children, and cap the amount of Federal Direct Unsubsidized loans that a student can borrow for professional school to $150,000 not including any amount borrowed to help fund an undergraduate degree.”
Right now, these two types of loans are the most common types taken out by medical students.
The AMA is urging Congress “to maintain subsidized and GRAD Plus loans, allow parents to have better borrowing terms to help fund their children’s higher education, and not cap the amount that an individual can borrow to pay for medical school.”
In addition, the House budget bill “would make it so that time spent in residency would not count as a public service job, thereby making residents ineligible for the Public Service Loan Forgiveness (PSLF) program,” Dr. Madara wrote, noting that more than 88% of medical school graduates with student-loan debt noted their intention to take part in PSLF. Studies have shown medical students pursuing primary care specialties are even likelier to have intentions to use PSLF.
“All resident physicians should have access to PSLF during their training years since, regardless of whether they are working in a public, private, or nonprofit setting, they are working for low wages to better public health,” the AMA’s letter says.
PBMs, AI regulation
Dr. Madara’s letter to House leaders also details the AMA’s support for more transparency from pharmacy benefit managers (PBMs). He noted that “the AMA has consistently expressed concern regarding the opaque way PBMs operate and the impact PBM business practices have on access to medically necessary drugs for patients.”
The AMA has been deeply concerned about the impact of the business practices of both prescription-drug manufacturers and PBMs on costs to both patients and the health care system at large. The AMA strongly supports efforts to mandate greater transparency regarding the business practices of PBMs. This lack of transparency has made it difficult to understand exactly how PBMs operate and the nature of their contracting with manufacturers and health plans and in turn has made it difficult to determine appropriate legislative or regulatory action to limit their continued ability to manipulate the system for their own financial gain.
The AMA also voiced “serious concerns” about provisions that would ban state-level regulation of AI.
While acknowledging that a patchwork approach to AI regulation has problems, Dr. Madara wrote that “additional federal action to ensure quality, performance and transparency of AI must be in place. Without additional consumer protections, clear guidelines to assure AI quality, strong consumer data- privacy protections, and further action to limit bias within AI systems, Americans will undoubtedly suffer harm.”
Learn more about AMA policy, advocacy and resources on augmented intelligence (AI), often called artificial intelligence.
Dr. Scott recently joined AMA Board of Trustees Chair Michael Suk, MD, JD, MPH, MBA, and AMA Senior Vice President of Advocacy Todd Askew, for an AMA member-exclusive conversation on what the AMA is doing to protect physicians and their patients during this time of uncertainty and change. They answered questions that came from AMA members. Watch now.
