How Trump’s radical tax, spending and policy bills will affect Medicaid
The House has passed President Donald Trump’s sweeping tax, spending and policy bills, and Medicaid is expected to be heavily affected.
Millions of Americans who have health insurance through Medicaid face new hurdles after the House passes President Donald Trump’s massive tax cuts and spending bills.
Trump’s marquee bill extends tax cuts in 2017, ends tips and overtime taxes, and bolsters border security. It also aims to become Medicaid, a federal and state health program aimed at 78.6 million low-income children and adults as of March 2025, according to the Centers for Medicare and Medicaid Services.
bill, It was approved by the Senate on July 1, and on July 3, the House is projected to cut $1 trillion from its Medicaid and Affordable Care Act insurance plans, removing 11.8 million insurance over the next decade.
According to previous CBO analysis, the bill made former President Joe Biden’s Covid-19 pandemic-era tax credits cheaper for consumers, making another five million people likely to lose their health insurance.
Health policy experts say the law corresponds to a partial rollback of health insurance benefits under former President Barack Obama’s 2010 Health Care Act, also known as Obama Care.
“We’ve seen a lot of experience in children and families,” said Joanne Alker, research professor, executive director and co-founder of Georgetown University’s Children and Family Center.
But Republicans say Medicaid overhauls are essential to protect taxpayers while motivating non-disabled Medicaid recipients to seek work to maintain compensation.
Shortly before the House moved the bill forward to Trump’s desk, Speaker Mike Johnson said the job requirements would “restore dignity and purpose to those with taxpayer-funded benefits.”
How will the bill change Medicaid?
Affordable Care Act established federal and state exchanges where people could purchase subsidized health insurance plans. Obama’s health law also gave states the option to expand Medicaid to eligible residents who earn up to 138% of federal poverty levels for individuals or $21,597.
A total of 40 states and Washington, DC expanded Medicaid under the ACA. Ten states, including Florida and Texas, are not expanding Medicaid.
Currently, under the GOP bill, these Medicaid expansion states require that a system be set up that doubles two per year eligibility checks and verify individual employment or exemption status.
The law requires “healthy” Medicaid recipients to work 80 hours a month or qualify for exemptions such as students, caregivers, disability, and more. Job checks apply to parents of children over the age of 13.
Medicaid: Where You Live
The GOP bill requires that two annual eligibility and job verification checks be carried out by the end of 2026. Therefore, by January 2027, legislative obligations must begin these checks.
However, the Senate version of the language allows Health and Human Services Secretary Robert F. Kennedy to extend the “good faith” exemption and allow states to perform job requirement checks more time.
State may also choose to launch work requirements earlier by filing a waiver with CMS, the federal agency that oversees Medicare and Medicaid.
During the first Trump administration, 13 states sought Medicaid job requirements. Arkansas was the only state during Trump’s first term, as it would implement work requirements and remove people from compensation within the first seven months of the program before a federal court order ends work requirements – removing more than 18,000 residents from Medicaid.
Georgia – of the 10 states that did not broaden Medicaid, it has not expanded to low-income adults – is the only state that currently has Medicaid work requirements. Georgia’s routes extend Medicaid to adults eligible to work at least 80 hours a month, and qualify for exemptions such as full-time students and volunteers. The Biden administration stalled the program, but Georgia sued, and the program began registering people in 2023.
As of April 30, fewer than 7,500 Georgians were protecting Medicaid under the Georgia State Route Program, according to data analyzed by the Georgia Institute of Budget and Policy.
State could also be motivated to act faster as the bill changes the number of states that fund a portion of Medicaid. The state is adopting a “provider tax,” which assesses the taxes of hospitals and other healthcare providers, in order to take advantage of larger Medicaid payments from the federal government.
The GOP bill freezes current tax rates and requires that in 2028 the state cut provider tax from the current 6% limit to 3.5%. The bill does not require states up to states to begin cutting provider taxes until 2028, but some states may choose to act earlier to address potential budget gaps.
“The state is anticipating losses in revenue and is considering making changes,” said Jennifer Tolbert, Medicaid’s deputy program director and an uninsured person with KFF, a health policy nonprofit.
Consumer Advocates: Medical Debt Concerns Mount
Consumer advocates said the health insurance losses for millions of Americans are likely to result in more people being able to take on medical debt.
Healthcare costs account for more than half of consumer credit records, according to a 2022 report from the Consumer Financial Protection Agency.
Before Biden resigned, the CFPB established medical debt rules that banned medical debt on credit reports and prohibit lenders from using a person’s medical debt history to make loan decisions.
The three biggest credit reporting companies have already agreed to remove unpaid medical debts of less than a year and remove medical debts of less than $500. Biden’s rules would have also eliminated greater debt. However, the CFPB is attempting to erase a rule that prohibits the inclusion of all medical liabilities in its credit report.
The CFPB had a layoff earlier this year, and the GOP bill will further cut consumer protection agency funding.
Sally Greenberg, CEO of the National Consumers League, said the combination of consumer watchdogs and losses in health insurance coverage is harmful to consumers.
“Consumers are going to pay — patients are going to pay big hours,” Greenberg said.
