Health care groups continue warnings of dire consequences as Senate deliberates on Big Beautiful Bill

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The latest version of a new federal spending plan will avoid the largest tax increase in history, but would be devastating to health care across the country, according to the analyses of supporters and opponents.

Lawmakers and advocates for various causes have sustained a running public debate about the provisions, including possible cuts to Medicaid, in the One Big Beautiful Bill Act, now up for debate in the Senate.

The Senate Finance Committee released its portion of the reconciliation bill that would make permanent the 2017 tax cuts approved in the first term of President Donald J. Trump. The bill would block a tax hike of more than $2.6 trillion on households earning less than $400,000 a year, and avoid a $1,700 tax hike on an average family of four, said an information sheet by Senate Finance Committee Chair Sen. Mike Crapo (R-Idaho). That committee published its portion of the bill late June 16.

In health care, Crapo listed more than a dozen “Commonsense Medicaid Reforms” that will make the program more fiscally sustainable. There would be work requirements for able-bodied adults who are choosing not to work and not caring for dependent children or elderly parents. Illegal immigrants would not qualify for benefits. The bill would end Medicaid “financing gimmicks” that increase federal spending by freezing and reducing provider taxes.

The bill also would stop pharmacy benefit managers from overcharging for prescription drugs.

“This bill prevents an over-$4 trillion tax hike and makes the successful 2017 Trump tax cuts permanent, enabling families and businesses to save and plan for the future,” Crapo said in a news release.

“It delivers additional tax relief to middle-class families still recovering from record inflation under the Biden administration,” he said, referring to the prior president. “It powers the economy by permanently extending critical pro-growth provisions and introduces new incentives for domestic investment, providing certainty for American job creators to spur domestic economic activity and invest in their workers.”

Class war in progress

Crapo’s counterpart on the Finance Committee, Ranking Member Sen. Ron Wyden (D-Oregon), called the legislation a “class war” that will hurt working Americans to give larger handouts to the wealthiest people.

“The biggest winners here are wealthy corporations who would get hundreds of billions of dollars in additional tax breaks on top of what they got in the House Republican bill,” Wyden said in a news release.

“Senate Republicans would pay for those new corporate tax breaks by making even deeper cuts to Medicaid, slashing funding for rural hospitals and other essential health care providers and throwing cash-strapped states off a funding cliff,” he said. “If those Medicaid cuts weren’t damaging enough, this bill would endanger hundreds of thousands of clean energy jobs and take food out of the mouths of millions of children.”

Expanding HSAs, rural health

The House of Representatives has approved its version of the bill. A leader there noted the bill will expand on the Health Savings Acount (HAS) model to reduce medical expenses. That will allow up to 20 million patients more flexibility in spending their health care dollars, said a statement from House Ways & Means Committee Chair Rep. Jason Smith (R-Missouri).

The bill would make permanent the flexible Individual Coverage Health Reimbursement Arrangements policy established during the president’s first term. It also would expand the federal Rural Emergency Hospitals designation, Smith said.

“The Democrats’ one-size-fits-all approach to health care has been an historical failure — hiking costs up, driving quality down, and stripping Americans of choices,” Smith said. “Under The One, Big, Beautiful Bill, we are improving the availability of health care in America — including for those in rural communities.

“Increased access to HSAs and Health Reimbursement Arrangements will empower small businesses and help individuals to take control of their health care, better manage those expenses, and seek out insurance coverage that actually meets their needs,” he said.

Effects on physicians

Some medical organizations issued statements that did not sound convinced about potential positive changes in health care under the bill.

The Medical Group Management Association issued a concise, blunt assessment of the Senate legislation — and it’s not good news for physicians or their patients.

"Legislative language emerging from the Senate abandons America's physician practices by ignoring current and future cuts to Medicare reimbursement,” said the statement by Anders Gilberg, MGMA senior vice president, government affairs.

“It largely retains problematic student loan provisions from the House bill, which will exacerbate physician workforce shortages,” Gilberg said. “The Senate's proposed additional Medicaid cuts will result in skyrocketing uncompensated care, compounding financial problems for physicians treating patients in underserved areas and hospitals subject to EMTALA,” the federal Emergency Medical Treatment & Labor Act.

“In its current form, the bill offers little or nothing positive for medical practices and their patients,” he said.

No money for doctors

If approved, the legislation would mean an $81 billion spending cut for physicians from 2025 to 2034, according to an analysis by the Urban Institute with support from the Robert Wood Johnson Foundation (RWJF). The organizations published a breakdown for declines in health care spending and what it would mean for doctors, hospitals, prescription drugs and other health care services. California, Florida and New York would fare the worst for physician spending decreases.

Hospital spending would drop by $321 billion, while prescription drug spending would decline by $191 billion for the same period. Meanwhile, the value of uncompensated care for uninsured patients would increase by $24 billion for physicians, $63 billion for hospitals, and $41 billion for prescription drugs, also for the period 2025 to 2034, according to that analysis.

“The Medicaid cuts Congress is considering would be the largest funding reduction in the program’s history, and it is hard to overstate just how devastating the impacts would be,” RWJF Senior Policy Adviser Katherine Hempstead said in a news release. “Such drastic changes to Medicaid financing would have ripple effects that go well beyond people covered by the program, further squeezing hospitals, limiting access to care for entire communities, and destabilizing state and local economies.”

Where is physician reimbursement?

David Jakubowicz, MD, president of the Medical Society of the State of New York, said the Senate bill “plans to double down on the harm to our health care system” by cutting Medicaid. The House version at least started to address Medicare cuts to physician reimbursement, but the Senate bill left that out, he said in a statement.

“Hospitals get an inflationary adjustment. Even Medicare Advantage Plans under criminal investigation get an inflationary adjustment. But physicians keep getting pay cuts year after year — for the past 20 years,” Jakubowicz said.

“Is it any wonder that physician wait times are going up, and private practices are closing?” he said. “Congress fails to provide common sense inflationary updates to U.S. doctors and their patients — and they need to go back to the drawing board and work to truly ensure that our patients can receive the care they need.”

Jakubowicz’ statement appeared to allude to last month’s Wall Street Journal report that the U.S. Department of Justice launched a criminal investigation into UnitedHealth Group for possible Medicare fraud. UnitedHealth Group issued a statement that it had not been notified of any criminal investigation and called the report “deeply irresponsible.”

Hospitals in trouble

If approved, the legislation would result in 1.8 million people in rural communities losing Medicaid coverage by 2034, said an analysis by the American Hospital Association (AHA). The Medicaid provisions in the bill would lead to a $50.4 billion cut in federal Medicaid spending on rural hospitals over the next decade, in a segment of health care where 48% operated at a financial loss in 2023.

“The Medicaid cuts in the One Big Beautiful Bill Act would devastate rural hospitals across the country,” AHA President and CEO Rick Pollack said in a statement. “Many rural hospitals would be forced to choose between maintaining services, keeping staff and possibly closing their doors. Patients would be forced to travel hours for basic or emergency care, and communities would suffer.”

There are 16.1 million Medicaid beneficiaries living in rural communities, with Medicaid covering 47% of rural births and 65% of nursing home residents. More than 50% of the Medicaid population lives in rural communities in Montana, South Dakota, Wyoming, Mississippi, Vermont, Kentucky, North Dakota, Alaska and Maine, according to AHA.

Cancer care at risk

The American Cancer Society Cancer Action Network (ACS CAN) put its tally at $793 billion in cuts to Medicaid leaving almost 11 million people uninsured with no other affordable health insurance options.

“No one is safe from the harms that this bill will cause, not even cancer patients,” the organization’s summary said. There will be cuts to cancer treatments and screenings, leading to later stage diagnoses that increase costs for everyone, according to the organization.

“Research tells us time and time again that access to health insurance is one of the most significant predictors in surviving a cancer diagnosis,” ACS CAN President Lisa Lacasse said in a statement. “ACS CAN is urging Senators to remove these harmful cuts to health care programs before this bill comes to the floor.

“This bill will undo more than a decade of progress in decreasing uninsured rates nationwide and improving cancer outcomes,” Lacasse said. “It cannot be overstated that this will result in more suffering and death from cancer.”