The House of Representatives version of the 2025 budget reconciliation bill took big steps forward this week. After draft language was introduced by the House Committee of Energy and Commerce Sunday, the House held a marathon committee hearing to move the bill forward. While there is a lot of work to be done before it is passed, it’s obvious that health care and health systems will be the most impacted by proposed cuts and changes to Medicaid.
Key Developments
- After a “marathon” 27-hour House Energy and Commerce Committee hearing this week, key cuts and operational changes to Medicaid remain intact. This despite 12 Republican House members signing a letter opposing cuts to Medicaid.
- Key provisions in the Medicaid changes include “freezing” state financing for their Medicaid programs, called provider taxes.
- Medicaid funds for Gender-affirming care and groups offering abortion services would also be banned, as well as state health care funding for non-citizens.
- The draft language would also bring work requirements to Medicaid and mandate 80 hours of community engagement work per month for able-bodied Medicaid recipients.
- Early CBO estimates of the health care impacts predict that 8.6 million Americans would lose health insurance by 2034 and roughly $715 billion in cuts would apply to health care.
- A May 12, 2025 letter from the Congressional Budget Office (CBO) confirms that the current total reconciliation bill meets the $880 billion reduction threshold from 2025-2034. Politico reports that a floor vote could be scheduled in the House before Memorial Day weekend.
Potential Risks and Concerns
- Generational Change in Medicaid
The current budget reconciliation draft language is a generational change in how Medicaid is funded and operated. Similar to the rest of the Trump Administration operations since taking office in January, proposed Medicaid changes shake up the traditional operating structure for health systems and patients impacted by Medicaid cuts.
- Reconciliation Process and More Federal Rulemaking
The speed of the budget reconciliation process – which only requires a simple majority and nixes the Senate filibuster – provides an easier bar to potentially pass this bill. Federal rulemaking from CMS and more decisions on health care priorities from federal agencies will also pressure health systems.
What’s Next for Health Systems
- House Floor Vote and Senate Markup
The House is expected to hold a floor vote by the end of May with a House Rules Committee vote expected the week of May 19. Once the House approves the reconciliation draft language, it moves to the U.S. Senate for markup, hearings and a floor vote. A final conference committee between the House and Senate is likely to finalize the final bill language – again likely resulting in significant changes to the bill.
- Pressure for Congressional Swing Districts
Any final vote on the budget reconciliation bill that includes Medicaid cuts and changes will put pressure on moderate congressional members – especially those who could be targeted in midterm elections. Last month, 12 Republican House members signed a letter opposing cuts to Medicaid.
- Education and Quick Response
Health systems should already be sharing their impacts and concerns with congressional lawmakers and state legislative leaders. Quick changes and amendments to Medicaid cuts and funding should be expected. Health systems should be ready with educational materials and content to advocate on the impact of the budget reconciliation and be ready to update and deploy simple communications based on changes.
Read the latest proposed changes in Medicaid under budget reconciliation from Kaiser Family Foundation here. Please note that draft provisions are likely to be amended or changed as the entire reconciliation bill moves through the congressional legislative process.
