Experts Highlight Consequences of Medicaid Rollbacks Due to Budget Bill

When the House passed the budget bill dubbed the One Big Beautiful Bill Act on July 3, 2025,1 health officials warned of the long-lasting effects that the move could have, including individuals losing health care coverage and the loss of funding for hospitals across the country.2 On July 9, KFF hosted a webinar to discuss some of these effects and explain how they would be addressed in the future.

A webinar held on July 9 focused on how the cuts to Medicaid would affect Americans nationwide | Image credit: Andrii - stock.adobe.com

The CEO of KFF, Drew Altman, PhD, stated that the webinar was held so that experts in the health care field could address concerns about the changes made to Medicaid and the Affordable Care Act (ACA), with 10 experts ultimately participating in the webinar. “What we’re looking at today is really noteworthy, because it’s never happened before,” said Altman. “This is the first rollback ever of our programs…and it’s the largest rollback ever.”

Altman also noted that a major policy decision that has been buried is whether the enhanced tax credits for the ACA will be extended. If they’re allowed to disappear, he said, premiums could increase by more than 75% and enrollment could plunge by as much as 50% in rural areas and add to the uninsured ranks. Coupled with the decisions made in the budget bill, nearly 20 million people could lose their insurance over the next decade, leaving a massive gap in care.

Larry Levitt, MA, executive vice president for health policy at KFF, agreed with Altman, stating that even though the bill was not a health care reform effort, it effectively acts as a partial repeal of the ACA and its gains in health coverage. “The Congressional Budget Office estimated that the legislation would reduce federal health spending by over a trillion dollars over the next decade and increase the number of people uninsured by 11.8 million,” said Levitt.

Although these numbers have not been updated after the changes to the bill made prior to its passing, they still portend massive reductions in health care coverage. The biggest change is the new work requirement, which Levitt said may not affect a vast majority of adults who are already working or who have an exemption. However, millions could lose coverage because they do not know how to navigate the reporting process and because they would be required to renew their Medicaid every 6 months.

Restrictions on taxes paid by health care providers could also force states to cut payments to providers and hospitals, which may be temporarily relieved by the Rural Health Fund until it is set to expire. Levitt emphasized that this fund will not fully compensate for the cuts because the cuts are permanent, whereas the fund is temporary. Most of these changes would not occur until after next fall’s midterm elections, according to Levitt, which means that none of the changes will be felt immediately.

“The fund was definitely put into place because there was concern about rural hospitals and there was concern about getting senators from rural states to vote for the final bill. It’s a 5-year pot of money that gets divided so half of it goes to states that have submitted applications…not based on the share of the population. The other half goes to the administrator of CMS who would have some flexibility to distribute the funds based on criteria that is established in the law,” explained Tricia Neuman, PhD, senior vice president of KFF and executive director of KFF’s Program on Medicare Policy.

The experts in the webinar also took questions from attendees. The effect of defunding Planned Parenthood was a particular topic of discussion, as most patients who would go to Planned Parenthood would have to go to a federally qualified health center in its absence. Alina Salganicoff, PhD, senior vice president of KFF and director for Women’s Health Policy, noted that it was not clear where patients would go if Planned Parenthood were to close in some neighborhoods.

“In some cases, there are state health departments, but in other cases Planned Parenthoods are located in medically underserved areas or in rural communities, and it’s not clear that patients who have been going there will have somewhere to go if they have to either close or greatly restrict services,” she said. “We’re really expecting to see disparate impacts in different states and different parts of the country.”

Robin Rudowitz, MA, vice president at KFF and director for Program on Medicaid and the Uninsured, said that there were not any provisions in the bill that would directly affect the coverage of pregnancy but that there were provisions that would shift cost to states. This, she said, could cause states to choose to tighten eligibility, reduce provider rates, or cut benefits.

Rudowitz also mentioned that there are multiple ways that work requirements can be enforced throughout the nation and there will likely be variation across states. Levitt added that it would be very hard to enforce these work requirements federally because of the variability in the state systems. Mental health and substance use coverage was also touched on, with Rudowitz acknowledging that although there would likely be exemptions for individuals with severe mental health issues and substance use disorders, some of these would not be likely to be caught in real time, which would leave individuals with the burden of verifying their conditions or working 80 hours per month.

Hospital closures are also a major concern as Medicaid funding decreases, especially to rural hospitals. Levitt explained that there are multiple reasons why rural hospitals have been closing in recent years, but this bill could join that list of reasons. “Kind of tying the cuts directly to rural hospitals closing, the hospitals will certainly pin the blame on it but it’s a whole set of factors that’ll go into whether a hospital can remain open,” he said.

When it comes to who is most at risk of losing their coverage, Jennifer Tolbert, MA, director of State Health Policy and Data, said that adults aged 50 to 64 years would be the individuals most vulnerable, with some in that group retiring due to previous physically demanding jobs. She explained that the idea floated by the Trump administration that people losing their coverage could instead work in agriculture is unlikely. Levitt also explained that most of the individuals at risk of losing their coverage are already working and could not switch to other forms of employment to keep their health insurance.

As the webinar concluded, the experts pledged to continue covering how this bill will affect individuals currently on Medicaid and the Medicaid program moving forward. Although the budget bill has introduced uncertainty into the Medicaid program and the way it will continue in the US, experts will continue to assess what it will mean for the American people as these changes take place over the next decade.

References

1. Freking K, Mascaro L. What’s in the tax and spending bill that Trump has signed into law. AP News. Updated July 4, 2025. Accessed July 10, 2025. https://apnews.com/article/what-is-republican-trump-tax-bill-f65be44e1050431a601320197322551b

2. Jones J. Oregon health agencies say ‘Big, Beautiful, Bill’ could ‘destabilize entire system.’ KOIN. July 9, 2025. Accessed July 10, 2025. https://www.koin.com/news/oregon/oregon-health-agencies-say-big-beautiful-bill-could-destabilize-entire-system/