The Summer of OBBBA
Who knew 2025 would be dominated by a bill name that sounds like a Swedish pop band? The health care landscape will likely be forever defined by the July 4 passage of the One Big Beautiful Budget Act (OBBBA) and its nearly one trillion cut to federal health care reimbursements like Medicaid.
The latest number from the Congressional Budget Office was a $911 billion cut. The much debated, complicated and still unclear law from Congress and the Trump Administration is the biggest change in health care since the Affordable Care Act and a generational change in how the government funds health care across the country. OBBBA is projected to bring the number of Americans without health insurance to roughly 10 million by 2035 and was not exactly well-received by those representing health systems.
The Summer of the Rural Health Fund
Before this summer, talking about rural health care led to a few of the same statistics, talking points and arguments. The danger to rural hospitals and clinics closing, their importance in providing patient access in geographically expansive areas and the call to better fund rural health has been a regular drumbeat in health care circles.
Now, with applications opening next month for access to the $50 billion slush fund, many are realizing the logistics of the program are not clear or really understood. Roughly $50 billion may sound like a healthy pot of money, until you realize that the Rural Health Transformation Program will distribute funds every year for the next decade through a state application process.
The actual award and funding mechanisms mirror how the federal government pays for other services; states will submit an application for funding and receive a certain amount based upon the application and certain metrics. States will then decide where and how to allocate the funding.
The Free Market Comes to Hospital Mergers and Acquisitions
In the middle of August, the Trump Administration withdrew a 2021 executive order encouraging federal agencies to break up monopolies and boost competition. This Biden-era executive order most likely and directly focused on mergers and acquisitions and called for the federal government to maintain more thorough oversight over m/a activity.
Trump’s cancelling of the executive order could mean a smoother path for health care mergers and acquisitions. Hart-Scott-Rodino reviews by the Federal Trade Commission and state insurance and attorneys general review will likely be similar, but the federal government may be given health care the green light to enter a free market approach to competition and acquisitions.
HHS, CMS and Who’s Left
Robert F. Kennedy Jr. took control of HHS this spring and proceeded to dismantle many of the traditional advisory, research and consulting committees and councils and remove thousands of HHS staff.
The addition of Dr. Mehmet Oz to run CMS confirms what many already knew when Trump won the presidency in November 2024: a reimagining of federal health care policy, regulations and research built around the self-named “Make America Healthy Again” movement.
Public outcry from staff against RFK Jr., a shooting at the CDC headquarters in Atlanta, fights with national physicians groups and a lag in moving MAHA priorities forward seems to be slowing down the momentum of Kennedy and team.
Looking Ahead to Fall 2025
As Congress returns from recess and the Trump administration continues to operationalize OBBBA, hospitals and health systems face a season of uncertainty. The implementation details of Medicaid cuts, the rollout of the Rural Health Transformation Program, and the changing dynamics of federal oversight in mergers and acquisitions will all require close monitoring. At the same time, HHS and CMS leadership transitions remain unsettled, raising questions about how quickly — and in what direction — regulatory reforms will move.
Hospital leaders should expect a volatile policy environment through the end of the year, where strategic agility and advocacy will be critical. Fall is shaping up less as a “wait and see” moment and more as a period where health systems must engage directly with state and federal decision-makers to influence how these policies are interpreted and applied.
Key Takeaways for Health System Leaders
- Engage early on OBBBA implementation: Work with state Medicaid agencies and congressional delegations to highlight the local impact of federal funding cuts and shape program rollouts.
- Prepare for the Rural Health Transformation Program: Position your system to compete for state-directed funds by strengthening partnerships with rural providers and gathering data to demonstrate community need.
- Reevaluate merger and acquisition strategies: With federal oversight eased, anticipate increased deal activity. Ensure your system’s strategic growth plans are aligned with market opportunities and state-level review processes.
- Monitor HHS and CMS leadership shifts: Policy direction under Secretary Robert F. Kennedy Jr. and CMS Administrator Dr. Mehmet Oz remains fluid. Track regulatory changes closely to anticipate compliance needs and advocacy opportunities.
- Strengthen advocacy and communication: Amplify your system’s voice with policymakers, staff, and communities to mitigate risks from federal funding cuts and reinforce your role in maintaining access and quality care.
