The House voted to pass President Donald Trump’s megabill Thursday, which cuts more than $1 trillion in Medicaid and federally funded health care programs over the next 10 years, and is now heading to Trump’s desk—meaning states and recipients could start seeing real changes or funding cuts as soon as next year, experts say.
House Majority Leader Steve Scalise, R-La., arrives as House Republicans work to pass President ... More
The bill would limit how states fund Medicaid programs, including a phased reduction in provider taxes starting 2026, and the introduction of work requirements which would take effect in 2027—changes experts say could force states to cut services, reduce enrollment or find new funding within the next few years.
Leah Rosenstiel, an assistant professor of political science at Vanderbilt University, told Forbes the bill won’t implement all its Medicaid changes at once, but said some states could be forced to rethink their Medicaid financing strategies almost immediately.
Rosenstiel said the existing 6% limit on taxes that states can impose on health care providers—which is how they raise revenue and pay for federal reimbursement—would phase down to 3.5% by 2032, with states losing more money for Medicaid.
Leighton Ku, a health policy and management professor at George Washington University, told Forbes the Medicaid provisions—including work requirements for Medicaid expansion states—are expected to begin by 2027, with coverage losses “really hitting home” in 2028 and 2029.
Some states—like Alaska, which doesn’t use provider taxes—would see little immediate change, where others that lean heavily on provider tax revenue could be forced to cut Medicaid services or find alternative sources of funding within the next year or two, according to Rosentiel and Ku.
The most immediate impact on Medicaid would be changes to provider taxes, which would also change the way states work with health care providers to help finance their Medicaid programs, according to Ku. He told Forbes, “Some of those changes are supposed to go into effect as soon as legislation is passed” and that “We would begin to see some changes in the next year, in 2026.” Ku also said work requirements for Medicaid expansion states would follow suit in 2027. The bill would cut Affordable Care Act marketplaces, leaving nearly 12 million Americans without health insurance by 2034, according to estimates by the Congressional Budget Office.
Rosenstiel told Forbes states have always had “a lot of flexibility when it comes to Medicaid,” and that wouldn’t change under Trump’s bill. “If a state government wanted to reduce spending on roads and put that money toward Medicaid, they’re free to do that. States can also, of course, choose to adopt Medicaid expansion or choose to not adopt Medicaid expansion,” Rosenstiel said. She said the majority of states will have to make changes to their provider taxes if the bill were enacted. “Medicaid is so much money, and the states receive so much money from the federal government for Medicaid—I would be really surprised if state leaders weren’t already at least starting to think about what they would want to do even if some changes don’t go into effect until a year or two from now,” she said.
House Passes Trump’s Signature Spending Bill, Meeting July 4 Deadline (Forbes)
Trump’s Policy Megabill Cuts More Than $1 Trillion From Medicaid: Here’s How (Forbes)