House Republicans have unveiled a sweeping budget reconciliation proposal that could dramatically reshape Medicaid as we know it. Dubbed the “megabill,” this legislation includes deep funding cuts, rollbacks to Medicaid expansion, and policy changes that have already triggered fierce opposition from hospital groups, Democratic lawmakers, and advocacy organizations.
Here’s what hospital and health system leaders need to know — and why your voice is urgently needed.
What’s in the Megabill?
The House Energy and Commerce Committee’s proposal (Subtitle D, Part I) aims to cut over $1.5 trillion from Medicaid over the next decade by:
- Repealing enhanced federal funding for states that expanded Medicaid under the Affordable Care Act (ACA).
- Introducing per capita caps or block grants to limit federal spending on Medicaid, shifting financial risk to states.
- Imposing stricter eligibility verification requirements, which could lead to millions losing coverage.
- Restricting retroactive eligibility and limiting Medicaid coverage for certain populations, including postpartum women.
Reaction from the Field
The proposed changes have drawn immediate backlash:
- Hospital associations, including the American Hospital Association and America’s Essential Hospitals, warned the cuts would devastate safety-net providers and result in closures in rural and underserved communities.
- In a New York Times op-ed on Monday Senator Josh Hawley (R-Mo.) pushed back on the efforts to cut the safety net saying “Our voters support social insurance programs. More than that, our voters depend on those programs.”
- Protestors disrupted markup sessions, highlighting fears of widespread coverage loss.
- The Congressional Budget Office (CBO) has not yet released a full score, but early estimates confirm substantial fiscal impact and millions at risk of losing Medicaid coverage.
Independent analyses reinforce these concerns:
- KFF’s Medicaid tracker breaks down proposed changes and their likely impact by state.
- Georgetown’s Center for Children and Families estimates the bill would reverse coverage gains made since 2014.
- The Center on Budget and Policy Priorities (CBPP) warns that the plan could lead states to cut eligibility, reduce provider payments, and limit services.
Key Takeaways for Hospital and Health System Leaders
- Expect Revenue Reductions: While the bill has a road ahead, hospitals can expect cuts to government payor revenue leading to reduced enrollment.
- Prepare for Operational Strain: Increased uninsured patients will mean higher uncompensated care burdens, particularly for emergency departments and rural providers.
- Engage Policymakers Now: The bill is in markup and likely to move quickly. Now is the time to share impact data with lawmakers, advocate through your trade associations, and speak out about what these cuts mean for your community.
- Monitor State Implications: States will face increased financial pressure and may impose their own restrictions in response. Hospital leaders must work closely with state Medicaid agencies to mitigate harm.
