2025 Reconciliation Bill Cuts Medicaid, Alters ACA Enrollment, Impacting U.S. Healthcare Access

The U.S. House recently passed the 2025 fiscal reconciliation bill, initially championed by the Trump administration, which now awaits the president's signature to become law. This legislation encompasses tax cuts and increased funding for defense, immigration enforcement, and energy production. However, it contains significant provisions affecting healthcare and social welfare programs.

Over the next decade, federal Medicaid funding is projected to be cut by $930 billion, marking a historic shift by introducing work or education requirements for many able-bodied adults and certain parents to maintain Medicaid eligibility. These Medicaid changes are expected to reduce coverage, with estimates of nearly 12 million more uninsured Americans by 2034 due to combined Medicaid reductions and modifications to the Affordable Care Act (ACA). The bill tightens ACA enrollment processes by shortening open enrollment and requiring policyholders to update their information annually, potentially decreasing overall coverage and delaying subsidy disbursements for applicants outside open enrollment periods. Healthcare experts and major medical organizations, including the American Medical Association and the American College of Physicians, have expressed concerns over these measures leading to increased strain on emergency services, greater uncompensated care burdens on community health centers, and potential closures or service reductions at rural hospitals reliant on Medicaid funding. Additionally, the bill impacts the Supplemental Nutrition Assistance Program (SNAP), raising work requirements and reducing benefit amounts for many recipients. Reproductive health access is also affected by provisions defunding Planned Parenthood from Medicaid coverage.

Although the bill increases Medicare reimbursement rates temporarily and curtails state provider taxes in Medicaid expansion states, these financial adjustments are viewed as insufficient to offset losses from reduced coverage. Telehealth flexibilities receive support in the bill with permanent provisions for High-Deductible Health Plan-Health Savings Account coverage. Despite some short-term financial relief for providers, the overarching effect is anticipated to decrease healthcare access and exacerbate system-wide challenges. This legislation represents a significant shift in U.S. healthcare funding and policy, raising critical questions about the management of healthcare costs and access in the coming decade.