Doctors, hospitals, and health insurers for weeks issued dire warnings to Republican lawmakers that millions of people would lose health coverage and hospitals would close if they cut Medicaid funding to help pay for President Donald Trump\u2019s big tax and spending bill.<\/p>\n
But Republicans ignored those pleas, made even deeper cuts, and sent the legislation on July 3 to the White House, where Trump signed it the next day.<\/p>\n
The law\u2019s passage marked a rare political loss for some of the health industry\u2019s biggest players. When unified, doctors, hospitals, and insurers have stood among the most powerful lobbying forces in Washington and have a long track record of blocking or forcing changes to legislation that could hurt them financially.<\/p>\n
But health industry lobbyists are catching their breath and assessing the damage after Trump\u2019s massive bill raced through Congress in less than two months with only Republican votes.<\/p>\n
Several lobbyists offered various reasons for being unable to stave off big cuts to Medicaid, a $900 billion state-federal health insurance program that covers an estimated 72 million low-income and disabled people nationally<\/a> and accounts for 19% of all spending on hospital<\/a> care, about $283 billion a year, according to the latest data. But nearly all agreed that GOP lawmakers were more worried about angering Trump than facing backlash from local hospitals and constituents back home.<\/p>\n \u201cMembers were more scared of Trump issuing a primary challenge than disappointing local voters who may find their hospital has to close or their insurance premium may go up,\u201d said Bob Kocher, a partner with venture capital firm Venrock who served in the Obama administration, referring to election primaries leading into the midterms.<\/p>\n Consider what happened to Sen. Thom Tillis (R-N.C.). After he took to the Senate floor to announce his opposition to the bill because of its cuts to Medicaid, Trump threatened to support a challenger to run against Tillis next year. Shortly thereafter, Tillis announced his retirement from politics.<\/p>\n But other factors were at work.<\/p>\n The health industry\u2019s warnings to lawmakers may have been dismissed because hospitals, health centers, and other health care provider groups are seen by Republicans as strong backers of the Affordable Care Act, the law known as Obamacare that\u2019s considered Democrats\u2019 biggest domestic achievement in decades.<\/p>\n The ACA expanded government health insurance coverage to millions of people previously not eligible. And no Republicans voted for it.<\/p>\n \u201cHospitals\u2019 support of the ACA has frustrated Republicans, and as a result there is less a reservoir of goodwill to hospitals than in the past,\u201d Kocher said.<\/p>\n Ceci Connolly, chief executive of the Alliance of Community Health Plans, said her lobbying team spent extra time on Capitol Hill with lawmakers and their staffers, raising concerns about how the legislation would imperil health care coverage.<\/p>\n \u201cThere was almost an overriding sense on the part of Republicans in Congress to deliver a major victory for President Trump,\u201d she said. Her group represents health plans that provide coverage in about 40 states. \u201cThat superseded some of their concerns, reluctance, and hesitation.\u201d<\/p>\n Connolly said she repeatedly heard from GOP lawmakers that the focus was on delivering on Trump\u2019s campaign promise to extend his 2017 tax cuts.<\/p>\n She said the concerns of some moderate members helped lead to one concession: a $50 billion fund to help rural hospitals and other health providers.<\/p>\n The money, she said, may have made it easier for some lawmakers to support a bill that, in total, cuts more than $1 trillion from Medicaid over a decade.<\/p>\n Another twist: Many new lawmakers were clearly still learning about Medicaid, she said.<\/p>\n Republicans also seemed eager to reduce the scope of Medicaid and Affordable Care Act marketplace coverage after enrollment in both programs soared to record levels during the pandemic and the Biden administration, she said. Trump\u2019s law requires states to verify eligibility for Medicaid at least every six months and ends auto-enrollment into marketplace plans \u2014 steps health policy experts says will reverse some of those gains.<\/a><\/p>\n Charles \u201cChip\u201d Kahn, a longtime health lobbyist and CEO of the Federation of American Hospitals, which represents for-profit hospitals, said the industry\u2019s message was heard on Capitol Hill. But because the bill dealt with so many other issues, including tax cuts, border security, and energy, lawmakers had to decide whether potential health coverage losses were more important.<\/p>\n It was very different than in 2017, when Republicans tried to repeal Obamacare but failed. Trump\u2019s 2025 measure, Kahn said, isn\u2019t a health reform bill or a health bill.<\/p>\n It \u201cleft us with an outcome that was unfortunate.\u201d<\/p>\n There were some successes, however, Kahn said.<\/p>\n Industry lobbying did prevent the federal government from reducing its share of spending for states that expanded Medicaid under the ACA. Hospitals and other Medicaid advocates also persuaded Congress not to cap the program\u2019s open-ended federal funding to states. Both measures would have tallied billions more in additional Medicaid funding cuts.<\/p>\n The new law doesn\u2019t change eligibility rules for Medicaid or change its benefits. But it does stipulate that states require most Medicaid enrollees<\/a> who gained coverage via the ACA\u2019s expansion to document that they work or volunteer 80 hours a month, a provision the Congressional Budget Office predicts will lead to about 5 million people losing coverage by 2034.<\/p>\n The law also limits states\u2019 use of a decades-old system of taxing health providers to leverage extra federal Medicaid funding. This was another loss for the hospital industry, which has supported the practice because it led to higher payments from Medicaid.<\/p>\n Medicaid generally pays lower fees for care than private insurance and Medicare, the program for people 65 and older as well as those with disabilities. But due to provider taxes, some hospitals are paid more under Medicaid than Medicare, according to the Commonwealth Fund<\/a>, a health research nonprofit.<\/p>\n Kahn credits the Paragon Health Institute, a conservative think tank, and its CEO Brian Blase for pushing the argument that provider taxes amounted to legalized \u201cmoney laundering.\u201d Blase advised Trump on health policy in his first term.<\/p>\n One hospital executive who asked for his name to be withheld to avoid professional retribution said the message \u2014 that some facilities had used this play to increase their profits \u2014 resonated with GOP lawmakers. \u201cThey thought some hospitals were doing fine financially and did not want to reward them,\u201d he said.<\/p>\n Still, Kahn, who is retiring at the end of the year, said he was pleased the Senate delayed implementation of the provider tax cuts until 2028. That will give the health industry a chance to revise the law, he speculated, possibly after the 2026 midterm election changes the balance of power in Congress.<\/p>\n In rural northeastern Louisiana, Todd Eppler, CEO of Desoto Regional Medical Center, had hoped Congress would pass the initial House version of the bill, which didn\u2019t include cuts to provider-tax funding. But he said any impact on his hospital in Mansfield, located in House Speaker Mike Johnson\u2019s district, will be offset by the $50 billion rural health fund.<\/p>\n \u201cI am happy where we ended up,\u201d Eppler said. \u201cI think they listened to rural hospitals.\u201d<\/p>\n Hospitals have argued for decades that any cuts in federal funding to Medicaid or Medicare would harm patients and lead to service reductions. Because hospitals are usually one of the largest employers in a congressional district, industry leaders often also warn of potential job losses. Such arguments typically give lawmakers pause.<\/p>\n But this time around, that message had little traction.<\/p>\n One health industry lobbyist, who asked not to be identified to speak candidly without risking professional repercussions, said there was a sense on Capitol Hill that hospitals could withstand the funding cuts.<\/p>\n But there\u2019s also a belief that trade groups including the American Hospital Association, the largest hospital industry lobbying organization, could have been more effective. \u201cThere is lot of concern that AHA statements were too soft, too little, and too late,\u201d he said.<\/p>\n AHA helped lead a coalition of hospital organizations that spent millions of dollars on television advertising against the GOP bill. Its president and CEO, Rick Pollack, said in a statement before the House voted on the legislation that the cuts to Medicaid would be a \u201cdevastating blow<\/a> to the health and well-being of our nation\u2019s most vulnerable citizens and communities.\u201d<\/p>\n Pollack said in a statement to KFF Health News that the appeal of tax cuts drove Republican lawmakers to pass the law.<\/p>\n \u201cHospitals and health systems have tirelessly advocated to protect coverage and access for millions of people,\u201d he said. \u201cWe will continue to raise these critical issues to mitigate the effects of these proposals.\u201d<\/p>\n The nation\u2019s largest trade group for doctors, the American Medical Association, also opposed the funding cuts to Medicaid and other federal health programs. Its president, Bobby Mukkamala, said in a July 1 statement that the changes \u201cwill shift costs to the states and specifically to physicians and hospitals to provide uncompensated care at a time when rural hospitals and physician practices are struggling to keep their doors open.\u201d<\/p>\n But the AMA was also focused on securing higher Medicare fees for doctors. The law ultimately included a one-time 2.5% Medicare pay bump for doctors in 2026. This wasn\u2019t a victory because it left out the House version\u2019s permanent payment fix that would have tied doctor pay to the medical inflation rate. Mukkamala noted the temporary lift but described it as falling \u201cfar short of what is needed to preserve access to care for America\u2019s seniors.\u201d<\/p>\n Joe Dunn, chief policy officer at the National Association of Community Health Centers, said his organization worked relentlessly this year to prevent deeper Medicaid cuts that would financially hurt nonprofit clinics. Health center administrators visited Washington in February, made thousands of phone calls, and sent emails to members of Congress.<\/p>\n One payoff was that the health centers were exempted from the law\u2019s requirement that providers charge some Medicaid enrollees up to $35 copayments for services.<\/p>\n But at the end of the day, Dunn said, many GOP House and Senate members simply wanted to finish the bill. \u201cThey went in a direction that satisfied the president\u2019s timelines and goals,\u201d he said.<\/p>\n Chief Washington correspondent Julie Rovner contributed to this report.<\/em><\/p>\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/p>\nUSE OUR CONTENT<\/h3>\n