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Big Beautiful Bill Update

Another update on the Big Beautfiul Bill as it seeks to work its way through the Senate. A number of major developments today.

A new brief from America’s Essential Hospitals says the Medicaid reductions could mean an increase in hospital uncompensated care of $42.4 billion.

The Paragon Health Institute, a conservative think tank with major influence in the administration, is urging the Senate to make changes in the bill to go deeper in terms of cuts and reform.

It says lawmakers should make changes in the following areas:

• All state directed payments under Medicaid should be capped at Medicare rates rather than grandfathering in existing rates.
• It says the bill should go further than the limits on provider tax reform by phasing down provider taxes in only Medicaid expansion states.
• It wants limits on intergovernmental transfers, where local governments or public providers like county hospitals and university health systems send funds to the state to boost federal matching funds.

Republicans in the Senate are looking at making cuts in Medicare to offset Medicaid cuts or add to overall savings. The likely targets are Medicare Advantage (MA) plan risk adjustment upcoding as well as potentially site neutral payment reform. The Better Medicare Alliance opposes any reduction in MA. Paragon recommended Medicare reforms that could save $712 billion, including $250 billion in MA changes and another $220 billion in site-neutral reforms. Other savings could come from reforms to uncompensated care, the 340B program, and more.

In other news, Humana has recommended some changes to risk adjustment coding as well. It wants to place some restrictions on reimbursement for conditions reported during in-home visits (where health risk assessments (HRAs) are performed) and chart reviews. It says diagnoses from home-based HRAs should only be counted if reported by other providers. In addition, it says diagnoses from chart review submissions should only count if the original medical record is present unless reported by another provider. These changes are what I have been recommending too.

Additional articles: https://essentialhospitals.org/wp-content/uploads/2025/06/CBO-Analysis-Reconciliation-June-2025.pdf and https://www.fiercehealthcare.com/providers/one-big-beautiful-bill-would-raise-hospitals-uncompensated-care-costs-42b-2034 and https://insidehealthpolicy.com/daily-news/paragon-joins-push-senators-modify-house-reconciliation-bill and https://www.fiercehealthcare.com/payers/house-gop-advances-budget-megabill-imposing-stricter-medicaid-work-requirements and https://insidehealthpolicy.com/daily-news/bma-pushes-back-gop-senators-broach-ma-cuts-reconciliation-talks and https://thehill.com/homenews/senate/5334831-republican-senators-consider-medicare-changes/?tbref=hp and https://www.modernhealthcare.com/politics-policy/humana-medicare-advantage-billing-limits

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #spending #medicaid #uninsured #coverage #medicare #medicareadvantage #riskadjustment #siteneutral

https://www.modernhealthcare.com/politics-policy/medicare-cuts-trump-tax-bill

— Marc S. Ryan

Of Musk, Trump, Medicaid, Medicare, The ACA, And The Uninsured

The budget reconciliation saga continues a day after Elon Musk attacked the bill as “a disgusting abomination.” The president leapt into action, trying to convince Senate conservatives to support the package with promises of later spending cuts.

The bill hit another pothole today with a new Congressional Budget Office (CBO) score that said the bill will mean more than $1 trillion in cuts over a decade. This is higher due to the last-minute changes made in the House to obtain enough conservatives to pass the bill. The biggest hit comes in Medicaid, with a revised reduction of $864 billion. Work requirements save $344 billion after the House accelerated the provision to no later than December 21, 2026.

What’s more, the CBO projects that the Medicaid cuts and other healthcare reductions in the bill will lead to 10.9 million people becoming uninsured, including 7.8 million who would lose Medicaid benefits.

In general, the uninsured rate swells due to:

• The Medicaid policy changes, which include work requirements, limitations on state provider taxes to generate the state matching contribution, and various enrollment changes and restrictions, among other changes. Medicaid is about $864 billion over ten years in savings. About 7.8 million lose Medicaid due to the bill’s Medicaid provisions.
• Several policies impacting the Affordable Care Act (ACA) that would change premium tax credits for migrants, increased recoupment of premium subsidies paid out at levels that are too high from income, and increased eligibility checks. These ACA changes save about $230 billion over ten years. About 3.1 million lose coverage due to the bill’s ACA provisions and some other provisions.

The CBO also said that about 4.2 million will exit the Exchanges and remain uninsured due to the expiration of the enhanced premium subsidies at the end of 2025.

An additional approximate 900,000 would lose Exchange coverage as a result of a proposed Trump administration rule issued in March that would shorten the annual enrollment period, require stricter eligibility reviews, and make other changes.

This brings the total increase in the number of uninsured to 16 million by 2034.  

Moderate and pragmatic conservative GOP senators appear to be willing to support Medicaid work requirements, but are very worried about other changes, especially the provider tax limitations and constraints on state directed payments. They worry about the fallout on providers, especially rural hospitals.

State officials who run the Exchanges urged the GOP to reject the ACA policy shifts, including new enrollment verification requirements and restrictions on tax credits. They say those changes in concert with expiration of the premium subsidies will upend state-based insurance exchanges by increasing costs, adding administrative burdens to states and consumers, stripping states’ decision-making authority, and destabilizing the program. The officials say in some states more than one in three could lose coverage.

A new Robert Wood Johnson analysis also finds that healthcare providers would lose more than $770 billion in revenue over the next decade under the bill. 

Senate Republicans are now looking at whether the caucus would support fraud, waste, and abuse (FWA) in Medicare to add to reductions and possibly alleviate some of the Medicaid cuts. This is where I predicted Medicare Advantage (MA) risk adjustment reforms might be put on the table.

Additional articles: https://www.modernhealthcare.com/politics-policy/tax-bill-medicaid-cuts-cbo-gop and https://www.medpagetoday.com/publichealthpolicy/washington-watch/115901 and https://thehill.com/policy/healthcare/5332414-congressional-budget-office-estimate-health-insurance-losses-gop-megabill/ and https://insidehealthpolicy.com/daily-news/provider-taxes-state-directed-payments-sticking-points-among-gop-senators and https://insidehealthpolicy.com/daily-news/state-exchange-officials-urge-senate-leaders-reject-house-bill and https://insidehealthpolicy.com/daily-news/naic-urges-senate-leadership-change-or-delay-exchange-related-policies and https://www.fiercehealthcare.com/regulatory/state-exchange-directors-press-senators-extend-aca-tax-credits and https://www.rwjf.org/en/insights/our-research/2025/05/reconciliation-bill-and-end-of-enhanced-subsidies.html?cid=xsh_rwjf_li

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #medicaid #coverage #medicare #medicareadvantage #aca #obamacare #exchanges #providers #uninsured

https://thehill.com/homenews/senate/5333247-senate-gop-medicare-trump-tax-bill/

— Marc S. Ryan

Elon Musk Drops Bomb On Budget Reconciliation

Just as Elon Musk exited Washington, the world’s richest man dropped a bomb on Donald Trump’s Big Beautiful Bill by calling it “a disgusting abomination.”

Rightists in the Senate were already agitated by the increase in the deficit and debt as well as what they see as a lack of deep spending cuts, but Musk’s remark has egged the conservatives on. Sens. Rand Paul, R-KY, Ron Johnson, R-WI, Rep. Mike Lee, R-UT, and Rick Scott, R-FL, have all raised issues with the deficits and debt. Lee and Paul backed Musk after his comments went viral.

On the other hand, at least four moderates and pragmatists in the Senate GOP caucus have expressed concern about Medicaid cuts. Normally conservative Josh Hawley has expressed major misgivings with Medicaid cuts and he said that Trump told him Monday that the final bill would not have Medicaid cuts. That upset conservatives in the House, which fought for additional cuts for their support.

House and Senate Republicans are being hit hard in their districts over Medicaid after a concerted effort by Democrats to advertise the issue. Collins and Hawley both have been vocal in the last few days. Hawley says he is concerned about provider tax limitations and cost-sharing.

Trump is busy working senators to vote for the bill. He seems to be making headway with some, including Johnson. But it will be a tough haul.

In other news, the Peterson-KFF Health Tracker looked at early insurance filings in three states and the District of Columbia and concludes that the premium subsidy expiration alone will add 4% to premiums in 2026. Insurers blame smaller enrollment and an increase in risk for the hikes. A major advertising campaign is pushing pressure on Republicans to reconsider a sunset. Some GOP moderates would like an extension, although likely outside of the reconciliation bill.

Additional articles: https://thehill.com/homenews/5331561-elon-musk-trump-budget-bill-gop/ and https://thehill.com/homenews/senate/5331383-trump-bill-senate-gop-criticism-musk/ and https://thehill.com/homenews/senate/5330775-rand-paul-mike-lee-criticize-trump-musk/?tbref=hp and https://thehill.com/homenews/senate/5330251-hawley-trump-medicaid/?tbref=hp and https://thehill.com/homenews/campaign/5331411-medicaid-cuts-republicans-defensive/?tbref=hp and https://www.modernhealthcare.com/politics-policy/trump-senators-tax-bill-medicaid and https://www.healthsystemtracker.org/brief/early-indications-of-the-impact-of-the-enhanced-premium-tax-credit-expiration-on-2026-marketplace-premiums/

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #medicaid #coverage #aca #exchanges #obamacare

https://www.nbcnews.com/politics/congress/republicans-face-new-pressure-extend-expiring-obamacare-tax-credits-rcna209281

Major Healthcare Changes At HHS, CMS

Centers for Medicare & Medicaid Services (CMS) Deputy Administrator Stephanie Carlton, laid out the agency’s major priorities, which include:

• Major investments in technology and data sharing
• Attacking fraud
• Investments in artificial intelligence
•  Drug price reform

More details on the president’s FFY 2026 budget proposal continue to show major reductions to various agencies — an $18 billion cut to the National Institutes of Health (40%), a $3.6 billion cut to the Centers for Disease Control (CDC) (43%), and a $409 million cut to the Food and Drug Administration (FDA) (11%).

A number of new initiatives prioritized by health chief Robert F. Kennedy, Jr. are funded along with restructuring tied to the new agenda.

Additional articles: https://insidehealthpolicy.com/daily-news/advocates-blast-proposed-cuts-nih-cdc-research-programs and https://www.healthcaredive.com/news/hhs-2026-budget-nih-cuts-trump-healthcare/749510/

(Some articles may require a subscription.)

#hhs #cms #rfkjr #nih #fda #cdc

https://www.fiercehealthcare.com/regulatory/cms-deputy-stephanie-carlton-lays-out-agency-priorities-0

More Fallout From Budget Reconciliation

The saga over the House reconciliation bill and what the Senate will do continues.

Republicans in swing or moderate districts returned home to town halls with tough questions from their constituents about Medicaid and other social service cuts as well as the fact that deficits will increase under the bill.

A healthcare policy group KFF issue briefer allocates the Congressional Budget Office’s federal spending reductions and enrollment losses across the states. The CBO’s latest cost estimates say the bill would reduce federal Medicaid spending by $723 billion over the decade timeframe and that the number of uninsured would increase by 7.6 million due to those cuts.

KFF finds that the biggest reduction areas in Medicaid are:

• Mandating that adults who are eligible for Medicaid through the ACA expansion meet work and reporting requirements ($280 billion)
• Repealing the Biden Administration’s rule simplifying Medicaid eligibility and renewal processes ($167 billion)
• Establishing a moratorium on new or increased provider taxes ($89 billion)
• Revising the payment limit for state directed payments ($73 billion)
• Increasing the frequency of eligibility redeterminations for the ACA expansion group ($53 billion).

Federal cuts to states represent 11% of federal spending on Medicaid over the period. By state, the cuts range from 5% in Wyoming, Alabama, and Wisconsin to 15% in Washington, Louisiana, and Illinois. Great graphics show enrollment losses by states, but states could react differently.

A Health Affairs Forefront blog discusses the bill, especially impacts on dual eligibles and expiring enhanced premium subsidies.

A Modern Healthcare article about an Urban Institute and Robert Wood Johnson analysis says Medicaid is cut by over $700 billion and the Exchanges by over $100 billion (most of which is the expiring enhanced premium subsidies). About 4.2 million people will leave the Exchanges due to the enhanced subsidies expiring. The researchers say providers would be on the hook for $278 billion in uncompensated care for newly uninsured people.

Additional articles: https://www.kff.org/medicaid/issue-brief/allocating-cbos-estimates-of-federal-medicaid-spending-reductions-and-enrollment-loss-across-the-states/ and https://www.healthaffairs.org/content/forefront/big-republican-cost-shift-massive-cuts-medicaid-and-aca-increase-costs-older-adults-and and https://www.modernhealthcare.com/politics-policy/one-big-beautiful-bill-act-2025-obamacare-aca

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #medicaid #exchanges #spending #coverage

https://thehill.com/homenews/house/5325547-republicans-trump-big-beautiful-bill-town-halls

FDA Commissioner Says Cost-Cutting Could Hurt Generic Introductions

President Trump’s first Food and Drug Administration (FDA) Commissioner, Scott Gottlieb, made a great point in an opinion piece at statnews.com.  Gottlieb says that Trump did a tremendous job introducing generics swiftly under his first few years in office. Reductions at FDA now could be a boon for brand drug makers as generic approvals will be further backlogged and allow brand makers to effectively maintain a monopoly after patents expire.

(Article may require a subscription.)

#drugpricing #generics #brands #branddrugmakers #fda

https://www.statnews.com/2025/05/28/fda-division-policy-development-generic-drugs-doge-cost-cutting-trump-glp-1s/

Study Shows Proliferation Of GLP-1s

A new study finds that the number of people prescribed GLP-1 drugs for weight management has skyrocketed over the past five years. FAIR Health’s study finds that just over 2% of adults in the U.S. took a GLP-1 to treat obesity or being overweight in 2024, up from just 0.3% in 2019. For those not diabetic, the percent of such adults increased from 0.03% in 2019 to 0.67% in 2019, or 1,960.9%.

While big national providers have sought to expand GLP-1 coverage while de-risking impacts, other plans are discontinuing coverage due to surging costs. A number of Blues are discontinuing obesity-only GLP-1 coverage.

In other news, compounders continue filling compounded GLP-1 drugs by arguing individual formulations are allowable.

Additional article: https://www.modernhealthcare.com/insurance/bcbs-plans-michigan-massachusetts-glp1-coverage and https://www.healthcaredive.com/news/glp1-obesity-weight-loss-adoption-fair-health/748963/ and https://insidehealthpolicy.com/inside-drug-pricing-daily-news/telehealth-companies-use-loophole-continue-glp-1-sales

(Some articles may require a subscription.)

#weightlossdrugs #glp1s #healthplans #pbms #drugpricing #branddrugmakers

https://www.fiercehealthcare.com/payers/fair-health-heres-how-much-glp-1-prescriptions-obesity-overweight-have-grown-2019

Senate Conservatives Want Deep Cuts

Conservative senators are arguing that huge new spending cuts need to be added to the budget reconciliation bill if they are to vote for the package. One lawmaker called the bill a “debt bomb.” At least four senators on the right have raised issues with the long-term implications of more debt and deficits. Deficits will grow from $2.2 trillion a year in FFY 2025 to more than $2.5 trillion in FFY 2035. Many want a return to pre-pandemic levels of spending. The Senate problem is a group of moderates who could sink the bill want fewer Medicaid cuts.

Also, a good article on the provider tax reductions and impacts on states and providers. And a good article talking about impacts to younger Americans of losing Medicaid.

Additional article: https://stateline.org/2025/05/27/republicans-target-a-tax-that-keeps-state-medicaid-programs-running/ and https://www.healthcaredive.com/news/medicaid-cuts-impact-young-adults-urban-institute/749030/

#budgetreconciliation #trump #congress #medicaid #coverage

https://thehill.com/homenews/senate/5316940-trump-bill-fiscal-concerns-republicans

More Data Needed On Medicare Advantage Payments

While the authors of a Health Affairs Forefront blog appear to be sympathetic to charges that Medicare Advantage (MA) is considerably overpaid, they do admit that more data needs to be shared in order to conclude what many academics find with faulty data.

They note that MA now costs about 14% of federal outlays and is projected to grow to 18% by 2034. They repeat the dubious statistic that payments to MA plans exceed by 20% what Medicare would spend in the traditional program.

But the authors do note that none of the relevant agencies (the Congressional Budget Office, the Office of Management and Budget, the Medicare Payment Advisory Commission, the Medicare Trustees, or the Centers for Medicare and Medicaid Services Office of the Actuary) has released public assessments of what Medicare spending would be now or in the future, adjusted for health risk and differences in coding practices. They also note that assessments must take into account a variety of dynamic and interacting variables, including demographics and health status, selection, coding practices, and quality bonuses, among others.

I note that any number of studies point to the positive effect MA penetration has on FFS costs in certain areas.

(Article may require a subscription.)

#medicareadvantage #overpayments #riskadjustment

https://www.healthaffairs.org/content/forefront/policymakers-need-data-budgetary-impact-medicare-advantage-growth

Senate GOP Looking To Change House Budget Reconciliation Bill

Senate Republicans say they’re going to rewrite the 1,116-page budget reconciliation bill the House passed on a tight vote. House Speaker Mike Johnson, R-LA, says the Senate needs to be judicious and make minimal changes to avoid another showdown in the House that could sink the bill. But Senate Majority Leader John Thune, R-SD, said his body will definitely have an imprint on the bill. The Senate is generally far more independent than the House.

The ideological split we saw in the House is now emerging in the Senate. Rightist Rand Paul, R-KY, will vote against the bill given the provision that increases the debt limit dramatically. Conservatives Ron Johnson, R-WI, Rick Scott, R-FL, and Mike Lee, R-UT, argue much deeper cuts need to occur. Johnson says the bill has a $2.2 trillion deficit on average each year and the bill should target greater reductions. This is an increase from a projected deficit in federal fiscal year 2025 of $1.9 trillion. They also want deeper Medicaid cuts and structural changes, such as state matching fund reductions.

On the other hand, moderates and pragmatic conservatives Josh Hawley, R-MO, Susan Collins, R-ME, Lisa Murkowski, R-AK, and Jerry Moran, R-KS, are threatening to oppose Medicaid reforms that would cut benefits. They worry, too, about impacts on state budgets and providers.

As you can see there are at least four votes on each side of the ideological spectrum that could sink the House bill as is in the Senate. At the same time, making changes that all can get on will be a struggle. Last, the Senate may target removal of the state and local taxes (SALT) deduction increase. That would sink any revised bill in the House.

Health Affairs Forefront blog has a good summary of all healthcare provisions in the House version that passed. One area not discussed is the restoration of appropriations for the cost-sharing reductions (CSR) subsidies in the Exchanges. These ended under Trump 45 and actually cost the federal government more in premium subsidies because plans have to offer the CSR plans and must increase base Silver plan premiums dramatically. But those above 250% of federal poverty could see some negative impacts.

Additional articles: https://thehill.com/homenews/senate/5315185-trump-big-beautiful-bill-senate-gop/ and https://www.healthaffairs.org/content/forefront/house-republicans-pass-budget-reconciliation-legislation-s-new-coverage-provisions and https://thehill.com/homenews/senate/5315019-senate-republicans-salt-cap-big-beautiful-bill/?tbref=hp

(Some articles may require a subscription.)

#budgetreconciliation #spending #trump #congress #medicaid #coverage

https://thehill.com/homenews/senate/5316382-these-are-the-changes-senate-republicans-are-eyeing-to-the-gops-big-beautiful-bill/