Key healthcare takeaways from Trump’s spending bill

Medicaid eligibility

States will need to verify Medicaid eligibility of beneficiaries every six months, rather than annually, to ensure proper coverage. The law will also stop HHS from enforcing a regulation designed to streamline eligibility in Medicaid and the Children's Health Insurance Program.

Additionally, the law seeks to revoke access to public insurance coverage for large groups of immigrants, including refugees, some abused spouses and children and people granted asylum. These classes of people will also have minimal access to premium tax credits for plans offered on the ACA exchanges. The law will prioritize public health coverage assistance for green card holders.

Medicaid work requirements

Some Medicaid beneficiaries will be required to meet work, volunteer or education requirements to maintain eligibility. This means 80 hours a month performing those tasks for those facing the requirements. There will be some exceptions for individuals, like those who are disabled or parents of young children. These requirements go into effect on Jan. 1, 2027.

Cost-sharing in Medicaid

The law will require higher-income Medicaid beneficiaries to pay up to $35 in cost-sharing for some healthcare services. This will apply to beneficiaries in Medicaid expansion states whose incomes are between the federal poverty level (currently, $15,650 for an individual) and 138% of that amount ($21,597). However, cost-sharing will not apply to certain services, such as emergency care. Additionally, states will be allowed to charge up to 5% of an individual's income each year.

Provider taxes

The law will tighten federal oversight of state-collected taxes from hospitals and other healthcare providers, known as provider taxes. The law seeks to swap the current 6% cap on provider tax revenue with a new limit based on inflation. It also aims to restrict how states implement provider taxes, seeking stricter guardrails on services that can be taxed and how payments are distributed across providers.

Affordable Care Act subsidy verification

The law requires pre-enrollment verification of eligibility for premium tax credits used to subsidize the cost of coverage through ACA exchanges. This means beneficiaries will need to update their income and immigration status more frequently to maintain access. Beneficiaries are now automatically reenrolled, which the law explicitly ends by the 2028 enrollment period.

Enhanced Affordable Care Act subsidies

Enhanced subsidies for plans offered via ACA exchanges from the American Rescue Plan will not be extended, leading them to expire at the end of 2025. People signing up for ACA exchange plans during certain special enrollment periods, including losing a job or adding a newborn, may also not be eligible for tax credits. Currently, they get up to 90 days of premium help during the application process, which can take weeks to complete.

Planned Parenthood funding

The law blocks Medicaid funding for services offered by Planned Parenthood and other abortion providers for a year. Nearly two-thirds of Planned Parenthood health centers are at risk of closure due to the loss of funding, the organization reported.

Rural healthcare support

The law establishes a $50 billion fund to bolster state support for providers and hospitals operating in rural communities, many of whom have warned that provider tax changes would force them to reduce services. The Cecil G. Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill recently reported that 338 rural hospitals are at risk of shutting down services or even closing or converting from a hospital with inpatient and other services.

Nursing home staffing

The law stops the enforcement of a Biden-era nursing home staffing regulation that required long-term care facilities to boost staffing and have a registered nurse on-site. Earlier this year, a federal judge struck down the regulation, ruling it overstepped HHS' authority.

Health savings accounts

Americans will be able to use money from health savings accounts, or HSAs, on more healthcare items and services under the law, including telehealth and concierge medical care up to a certain limit ($150 a month for an individual and $300 for a family). More plans on the ACA exchanges can provide HSAs, including bronze and catastrophic plans.

Healthcare reacts

The healthcare industry has generally  viewed the budget reconciliation bill negatively, with the American Medical Association (AMA) even saying it moves healthcare "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," newly-minted AMA president Bobby Mukkamala, M.D., said in a statement.

Industry heavy-hitters are worried about massive coverage losses that would lead to higher uncompensated care costs, delayed access to care and potential exacerbations in the nation's chronic disease problem.

"No matter how often repeated, the magnitude of these reductions -- and the number of individuals who will lose health coverage -- cannot be simply dismissed as waste, fraud, and abuse," Rick Pollack, president and CEO of the American Hospital Association, said in a statement. "The faces of Medicaid include our children, our disabled, our seniors, our veterans, our neighbors, and friends. The real-life consequences of these reductions will negatively impact access to care for all Americans."

America's Health Insurance Plans also released a press release on the passage of the bill, vowing to support the upcoming boost in uninsured Americans.

"Health plans will do everything they can to support people impacted by the substantial loss of coverage in Medicaid and the individual market, and to help keep access to quality care as affordable as possible," said America's Health Insurance Plans in a press release on the passage of the bill. "With millions of Americans facing coverage disruptions in the years ahead, it is more important than ever to prevent the expiration of the current health care tax credits before the end of the year, and to continue to keep the promise to protect Medicare beneficiaries."

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016