U.S. President Donald Trump, joined by Republican lawmakers, indicators the One, Large Lovely Invoice Act into legislation on July 04, 2025 in Washington, DC. The legislation contains cuts to funding for Medicaid, meals help and different social security web applications.
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Docs, hospitals, and well being insurers for weeks issued dire warnings to Republican lawmakers that thousands and thousands of individuals would lose well being protection and hospitals would shut in the event that they reduce Medicaid funding to assist pay for President Donald Trump’s huge 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 subsequent day.
The legislation’s passage marked a uncommon political loss for among the well being trade’s largest gamers. When unified, docs, hospitals, and insurers have stood among the many strongest lobbying forces in Washington and have an extended observe file of blocking or forcing modifications to laws that might damage them financially.
However well being trade lobbyists are catching their breath and assessing the injury after Trump’s large invoice raced by means of Congress in lower than two months with solely Republican votes.
A number of lobbyists provided varied causes for being unable to stave off huge cuts to Medicaid, the $900 billion state-federal medical insurance program that covers low-income and disabled individuals and accounts for 19% of all spending on hospital care. . However almost all agreed that GOP lawmakers had been extra apprehensive about angering Trump than dealing with backlash from native hospitals and constituents again dwelling.
“Members had been extra afraid of Trump issuing a major 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.
Take into account 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 help 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 trade’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 robust backers of the Reasonably priced Care Act, the legislation generally known as Obamacare that is thought of Democrats’ largest home achievement in many years.
The ACA expanded authorities medical insurance protection to thousands and thousands of individuals beforehand not eligible. And no Republicans voted for it.
“Hospitals’ help of the ACA has annoyed Republicans, and consequently 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 Neighborhood Well being Plans, stated her lobbying staff spent additional time on Capitol Hill with lawmakers and their staffers, elevating issues about how the laws would imperil well being care protection.
“There was virtually 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 issues, 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 issues 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 help a invoice that in complete 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 scale back the scope of Medicaid and Reasonably priced Care Act market protection after enrollment in each applications soared to file ranges through the pandemic and the Biden administration, she stated. Trump’s legislation requires states to confirm eligibility for Medicaid no less than each six months and ends auto-enrollment into market plans — steps well being coverage specialists says will reverse a few of these beneficial properties.
Charles “Chip” Kahn, a longtime well being lobbyist and CEO of the Federation of American Hospitals, which represents for-profit hospitals, stated the trade’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 essential.
It was very totally 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 end result that was unlucky.”
There have been some successes, nevertheless, Kahn stated.
Trade lobbying did stop the federal authorities from decreasing its share of spending for states that expanded Medicaid underneath 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 extra Medicaid funding cuts.
The brand new legislation would not change eligibility guidelines for Medicaid nor change its advantages. But it surely does stipulate that states require most Medicaid enrollees who gained protection by way of the ACA’s growth to doc that they work or volunteer 80 hours a month, a provision the Congressional Finances Workplace predicts will result in about 5 million individuals 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 additional federal Medicaid funding. This was one other loss for the hospital trade, which has supported the observe as a result of it led to increased funds from Medicaid.
Medicaid typically pays decrease charges for care than non-public insurance coverage and Medicare, this system for individuals 65 and older in addition to these with disabilities. However attributable to supplier taxes, some hospitals are paid extra underneath Medicaid than Medicare, in accordance with the Commonwealth Fund, a well being analysis nonprofit.
Kahn credit the Paragon Well being Institute, a conservative suppose 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 services had used this play to extend their income — resonated with GOP lawmakers. “They thought some hospitals had been doing nice 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 trade an opportunity to push for modifications to the legislation, he speculated, after the 2026 midterm election and a doable shift within the steadiness of energy in Congress.
In rural northeastern Louisiana, Todd Eppler, CEO of Desoto Regional Medical Heart, had hoped Congress would cross the preliminary Home model of the invoice, which did not embrace cuts to provider-tax funding. However he stated any affect on his hospital in Mansfield, positioned in Home Speaker Mike Johnson’s district, might be offset by the $50 billion rural well being fund.
“I’m joyful the place we ended up,” Eppler stated. “I believe they listened to rural hospitals.”
Tens of millions 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 normally one of many largest employers in a congressional district, trade 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 trade 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 may stand up to the funding cuts.
However there’s additionally a perception that commerce teams together with the American Hospital Affiliation, the biggest hospital trade lobbying group, may have been more practical. “There may be lot of concern that AHA statements had been too tender, too little, and too late,” he stated.
AHA helped lead a coalition of hospital organizations that spent thousands and thousands of {dollars} on tv promoting in opposition to the GOP invoice. Its president and CEO, Rick Pollack, stated in an announcement 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 an announcement to KFF Well being Information that the attraction of tax cuts drove Republican lawmakers to cross the legislation.
“Hospitals and well being programs have tirelessly advocated to guard protection and entry for thousands and thousands of individuals,” he stated. “We’ll proceed to lift these important points to mitigate the results of those proposals.”
The nation’s largest commerce group for docs, the American Medical Affiliation, additionally opposed the funding cuts to Medicaid and different federal well being applications. Its president, Bobby Mukkamala, stated in a July 1 assertion that the modifications “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 docs. The legislation finally included a one-time 2.5% Medicare pay bump for docs in 2026. This wasn’t a victory as a result of it unnoticed the Home model’s everlasting fee repair that will have tied physician pay to the medical inflation fee. Mukkamala famous the short-term raise however described it as falling “far brief of what’s wanted to protect entry to look after America’s seniors.”
Joe Dunn, chief coverage officer on the Nationwide Affiliation of Neighborhood Well being Facilities, stated his group labored relentlessly this yr to forestall deeper Medicaid cuts that will financially damage nonprofit clinics. Well being heart directors visited Washington in February, made hundreds of cellphone 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 companies.
However on the finish of the day, Dunn stated, many GOP Home and Senate members merely wished to complete the invoice. “They went in a path that glad the president’s timelines and objectives,” 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 applications at KFF.
