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 contains cuts to funding for Medicaid, meals help and different social security web packages.
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Medical doctors, hospitals, and well being insurers for weeks issued dire warnings to Republican lawmakers that hundreds of thousands of individuals would lose well being protection and hospitals would shut in the event that they minimize Medicaid funding to assist pay for President Donald Trump’s large 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 few of 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 report of blocking or forcing modifications to laws that might damage them financially.
However well being trade lobbyists are catching their breath and assessing the harm after Trump’s huge 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 large 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 have been extra apprehensive about angering Trump than going through backlash from native hospitals and constituents again dwelling.
“Members have been extra petrified 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 12 months. Shortly thereafter, Tillis introduced his retirement from politics.
Bitter emotions over the ACA
However different elements have 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 sturdy backers of the Reasonably priced Care Act, the legislation often called Obamacare that is thought-about Democrats’ largest home achievement in a long time.
The ACA expanded authorities medical health insurance protection to hundreds of thousands of individuals beforehand not eligible. And no Republicans voted for it.
“Hospitals’ help of the ACA has pissed off Republicans, and because of this there may be much less a reservoir of goodwill to hospitals than up to now,” Kocher stated.
Ceci Connolly, chief govt of the Alliance of Neighborhood Well being Plans, stated her lobbying staff spent further 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 serious victory for President Trump,” she stated. Her group represents well being plans that present protection in about 40 states. “That outmoded a few of their issues, reluctance, and hesitation.”
Connolly stated she repeatedly heard from GOP lawmakers that the main focus 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 have 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 packages soared to report ranges through 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 specialists says will reverse a few of these positive aspects.
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 have 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 consequence that was unlucky.”
There have been some successes, nevertheless, 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 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 through the ACA’s growth to doc that they work or volunteer 80 hours a month, a provision the Congressional Price range Workplace predicts will result in about 5 million folks shedding 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 trade, which has supported the observe as a result of it led to greater funds from Medicaid.
Medicaid usually pays decrease charges for care than non-public insurance coverage and Medicare, this system for folks 65 and older in addition to these with disabilities. However because of supplier taxes, some hospitals are paid extra below Medicaid than Medicare, in accordance with the Commonwealth Funda 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 govt 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 earnings — resonated with GOP lawmakers. “They thought some hospitals have been doing positive financially and didn’t wish to reward them,” he stated.
Nonetheless, Kahn, who’s retiring on the finish of the 12 months, 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 stability of energy in Congress.
In rural northeastern Louisiana, Todd Eppler, CEO of Desoto Regional Medical Middle, had hoped Congress would cross 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, situated in Home Speaker Mike Johnson’s district, can be offset by the $50 billion rural well being fund.
“I’m completely happy the place we ended up,” Eppler stated. “I feel they listened to rural hospitals.”
Thousands and thousands spent in adverts 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 sometimes 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 simpler. “There may be lot of concern that AHA statements have been too smooth, too little, and too late,” he stated.
AHA helped lead a coalition of hospital organizations that spent hundreds of thousands 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 weak residents and communities.”
Pollack stated in a press release to KFF Well being Information that the attraction of tax cuts drove Republican lawmakers to cross the legislation.
“Hospitals and well being methods have tirelessly advocated to guard protection and entry for hundreds of thousands of individuals,” he stated. “We are going to proceed to boost these essential points to mitigate the consequences 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 packages. 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 supply uncompensated care at a time when rural hospitals and doctor practices are struggling to maintain their doorways open.”
However the AMA was additionally centered on securing greater Medicare charges for docs. The legislation in the end included a one-time 2.5% Medicare pay bump for docs in 2026. This wasn’t a victory as a result of it neglected the Home model’s everlasting fee repair that will have tied physician pay to the medical inflation charge. Mukkamala famous the non permanent elevate however described it as falling “far quick of what’s wanted to protect entry to take care of America’s seniors.”
Joe Dunn, chief coverage officer on the Nationwide Affiliation of Neighborhood Well being Facilities, stated his group labored relentlessly this 12 months to forestall deeper Medicaid cuts that will financially damage 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 have 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 path that happy 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 without doubt one of the core working packages at Kff.
