The U.S. House of Representatives on May 22 passed the One Big Beautiful Bill Act (H.R. 1, PDF), by a vote of 215-214-1. The Republican-led reconciliation legislation would advance President Donald Trump’s domestic policy agenda by extending the 2017 Tax Cuts and Jobs Act (P.L. 115-97, PDF), implementing new tax policies, increasing defense and border security spending, enacting changes to energy policy, and raising the debt limit. These priorities would be financed through cuts to the Medicaid program, safety-net funding, higher education programs, and other policies.
Prior to the House vote, AAMC President and CEO David J. Skorton, MD, and Chief Public Policy Officer Danielle Turnipseed, JD, MHSA, MPP, issued a May 21 statement reiterating the AAMC’s deep concerns with the legislation’s cuts to the Medicaid program, the effect on access to care for patients, and the impact on learners’ access to medical school. “The final reconciliation package now being debated by the House is more harmful, as it accelerates and increases cuts to the Medicaid program and could also result in roughly $490 billion in Medicare cuts over the next 10 years. These policies will ultimately result in even more people losing access to care than previously estimated.” In addition to the safety-net and patient care impact, the AAMC statement also highlighted harmful effects on medical school access and the ultimate impact on patients. “The elimination of the Grad PLUS loan program and increased restrictions on medical residents' eligibility for Public Service Loan Forgiveness will make it harder for patients to get the care they need by undermining the ability of future physicians to attend medical school,” the statement read.
The House Energy and Commerce Committee had approved on May 14 its reconciliation legislation, which included several Medicaid policies of concern to academic medicine, such as $625 billion in Medicaid cuts through new restrictions on provider taxes and state directed payments, limits on Medicaid eligibility and enrollment, and targeted cuts to the Federal Medicaid Assistance Percentage for states that choose to use state funds to support Medicaid coverage for undocumented individuals, among other policies [refer to Washington Highlights, May 16]. The One Big Beautiful Bill Act manager’s amendment, which was released on May 21, incorporated several revisions to the Medicaid policies. These included accelerating the start date for the Medicaid work requirements from Jan. 1, 2029, to Dec. 31, 2026; accelerating implementation of the Medicaid eligibility redetermination timeline for expansion adults from Oct. 1, 2027, to Dec. 31, 2026; and revising the payment limit or cap for new state directed payments in non-Medicaid expansion states to be set at 110% of Medicare rates. The new state directed payment limit for expansion states will remain at the Medicare rate.
The House Education and Workforce Committee previously approved on April 29 its reconciliation legislation to comply with reconciliation instructions to identify at least $330 billion in savings over ten years by proposing several cuts to higher education programs [refer to Washington Highlights, May 2]. To reach this savings goal, the bill would eliminate the Grad PLUS program, reduce aggregate federal loan limits for graduate and professional students, create new income-driven and income-contingent repayment plans, exclude medical and dental residents from public service loan forgiveness (PSLF), create a risk-sharing formula that would require higher education institutions to pay back a portion of unpaid federal student loans to the government, repeal regulations related to student aid, limit the regulatory power of the secretary of the Department of Education, and reduce Pell Grant eligibility.
This bill also includes provisions that would increase taxes on nonprofits and institutions of higher education to comply with reconciliation instructions given to the House Ways and Means Committee to report legislation that increases the deficit by not more than $4.5 trillion over ten years. Provisions in the advanced legislation would increase the size and scope of the endowment tax and increase unrelated business income tax on nonprofits. This bill also would implement an AAMC-supported policy of reinstating a partial deduction for charitable contributions for non-itemizers (PDF).
Prior to the passage of this bill, the AAMC alongside the American Association of Colleges of Osteopathic Medicine (AACOM) sent a letter to House leadership, the House Committee on Rules, and relevant House and Senate higher education committees in support of essential federal loan and forgiveness programs for medical students (PDF). The AAMC also joined the broader higher education community to oppose proposals to reduce and eliminate federal loan programs as well as additional taxation on endowments of institutions of higher education (PDF).
As the reconciliation activity transitions to the Senate, several Republican senators have raised questions about harmful cuts to Medicaid and safety-net programs and certain tax policies included in the House bill. Those issues will be addressed in the coming weeks and months as the Senate debates its reconciliation legislation.
- Washington Highlights