CED Newsletters & Policy Alerts

Health Care Provisions of Senate Tax Bill

July 02, 2025

The Senate-passed version of H.R. 1, the “Big Beautiful Bill Act,” contains sweeping changes to Federal health care programs, including deep Medicaid and Children’s Health Insurance Program (CHIP) spending cuts while introducing new eligibility restrictions and making some new investments in rural health care.

• The bill cuts Medicaid and CHIP spending by over $1 trillion over the next ten years, nearly 18% higher than the House-passed version.
• These cuts are largely driven by narrowing the population covered by these programs by implementing work requirements nationwide (with some exemptions), limiting eligibility for lawfully present immigrants, and enhancing eligibility checks to combat fraud in the program.
• Additionally, the bill alters Medicaid financing by capping provider payment rates at Medicare levels in ACA expansion states (effectively a lower rate in many instances), tightening restrictions on states’ use of provider taxes to raise the Federal match for Medicaid, and reducing Federal matching payments for hospitals providing emergency Medicaid services.
• While estimates vary, an analysis from the most recent CBO report suggests that 11.8 million people would lose access to these health care programs over the next decade if the bill is enacted in its current form.
• The final version of the Senate bill doubled the amount of money for a new rural health transformation program, including up to $50 billion in grants for states to use between 2028 and 2032 for rural health care providers.