The Senate advanced President Donald Trump’s tax-cut bill Tuesday with provisions that are estimated to slash healthcare spending by well over $1 trillion, with most of it coming from Medicaid.
Healthcare advocates, provider groups and at least one Senate Republican hammered the cuts in the One Big Beautiful Bill Act of 2025, saying they would harm patients and providers. Nevertheless, Republicans passed the measure that supports the president’s tax agenda, along with enhanced defense and border security spending.
The bill passed 51-50, with Vice President JD Vance casting the tiebreaking vote in his constitutional capacity as president of the Senate. Republican Sens. Susan Collins (Maine), Thom Tillis (N.C.) and Dr. Rand Paul (Ky). opposed the bill. All Democrats and allied independents voted nay.
Related: Republicans dismiss warnings on Medicaid cuts, uncompensated care
The legislation would slash Medicaid funding by $940 billion over 10 years, according to an analysis the nonpartisan Congressional Budget Office released Sunday. The bill also would reduce support for the health insurance exchanges by more than $200 billion, the CBO projects.
Combined, these and other healthcare provisions would cause 11.8 million people to become uninsured, the CBO projects
If Congress and Trump also do not take separate action to extend enhanced exchange subsidies due to expire at the end of the year, an additional 5.1 million people would become uninsured, according to an earlier CBO analysis.
To assuage Republican senators anxious about the effects of taking more than $1 trillion out of the healthcare system on rural providers, GOP leaders included a $50 billion relief fund for rural hospitals and community health centers. That’s twice the amount originally proposed and was increased to win the support of Sen. Lisa Murkowski (R-Alaska), Budget Committee Chair Lindsey Graham (R-S.C.) said Tuesday.
The legislation now returns to the House. The lower chamber passed its version by a single vote in May and must approve the Senate’s changes before delivering the final package to Trump. Internal GOP disputes about the scale of the spending cuts and other matters make the outcome uncertain.
Senate Majority Leader John Thune (R-S.D.) repeated the GOP position from the start of the debate that the cuts would not harm deserving beneficiaries, and that the steep reductions would curtail abuse.
“Yes, there are some improvements and reforms to Medicaid to make it more efficient to make sure that the people who are supposed to benefit from Medicaid do, and that it doesn’t go to people who shouldn’t benefit from Medicaid,” Thune said Monday.
The measure includes a number of provisions designed to limit immigrants’ access to health benefits, including lawfully present immigrants.
Yet Democrats, echoing concerns of providers and outside analysts, argued that the bill’s stricter Medicaid eligibility rules, including the creation of work requirements and more stringent citizenship verifications, would impede enrollment for people who legitimately qualify for benefits.
At the same time, Democrats contended, providers would be swamped with uncompensated care costs when newly uninsured people need medical care and can’t afford to pay their bills.
“It is outrageous to take food out of the mouths of hungry children, to take healthcare away from people who need it to survive, just for tax cuts for the billionaires,” Senate Minority Leader Chuck Schumer (D-N.Y.) said Monday. “And the American people know it,” he said, referring to polling on the bill.
Here are the major healthcare provisions of the One Big Beautiful Bill Act:
Medicaid
Creates work requirements for working-age adult who do not have disabilities or dependents starting no later than the end of 2026. The Health and Human Services Department would be required to issue guidance on implementing the policy by the end of this year. Beneficiaries would have to document at least 80 hours a month of work or other qualifying activities. The CBO estimates the provision would reduce spending by $326 billion.
Bans new state provider taxes and cuts existing ones to from 6% of a provider’s net patient revenues to 3.5% over several years. The bill also tightens standards for what provider taxes are legally permissible, and bars most states from using state-directed payments to order Medicaid managed care companies to reimburse providers more than 100% of Medicare rates. States that haven’t expanded Medicaid under the Affordable Care Act of 2010 would be able to pay up to 110% of Medicare. Combined, the measures would cut federal spending by $275 billion.
Orders states to maintain updated information on Medicaid enrollees, such as verifying addresses and removing deceased people from the rolls. It would save $17 billion.
Requires eligibility redeterminations every six months for adults covered under the ACA Medicaid expansion, generating savings of $63 billion.
Establishes a $25 billion fund for rural hospitals, with $10 billion spent in 2028, $10 billion in 2029, and the remainder spread out over three years.
Mandates cost-sharing up to $35 per service for Medicaid expansion enrollees with incomes above the federal poverty level, which is $15,650 for a single person in the contiguous states and slightly higher in Alaska and Hawaii, starting in October 2028. That is projected to reduce spending by $7.5 billion.
Limits retroactive provider reimbursements for newly enrolled Medicaid recipients to one month instead of three. It is expected to save $6 billion.
Reduces federal Medicaid funding to states that use their own tax revenue to cover undocumented immigrants through Medicaid. The provision would cut spending by $11 billion.
Caps Medicaid payments for emergency services provided to migrants in expansion states, saving $29 billion.
Bars Medicaid payments for most legal migrants in the U.S., generating savings of $6.2 billion.
Prevents Medicaid payments going to large healthcare providers that offer abortion services for one year, which targets the Planned Parenthood Federation of America.
Permits states to apply for waivers allowing home- and community-based services for more people, at a cost of $6.6 billion.
Medicare
Increases Medicare physician reimbursements 2.5% in 2026, but drops a House proposal to peg future payment updates to the Medicare Economic Index. The one-year increase would cost $2 billion, instead of $8 billion under the House-passed bill.
Triggers Medicare cuts under the Statutory Pay‑As‑You‑Go Act of 2010 that could include reductions in provider reimbursements. CBO projects that under the House bill, the White House Office of Management and Budget would have to curtail Medicare spending by $45 billion in 2026 and $490 billion from 2027 to 2034 because the House bill added $2.3 trillion to the deficit. The Senate bill adds $3.3 trillion to the deficit, but a revised estimate was not available.
Prevents most immigrants, including most asylum recipients, from getting Medicare benefits, saving $5 billion.
Does not include a delay in $16 billion in cuts to Medicaid disproportionate share hospital payments for three years.
Health insurance exchanges
Prevents premium tax credits from being provided to most migrants and disallows them for enrollees whose status is in doubt, which would save $130 billion.
Institutes stricter eligibility and income verifications for exchange subsidy recipients and requires new checks for low-income enrollees with zero-premium plans.
Allows health insurance companies to demand premium payments before beginning coverage and to remove customers who are in arrears, regardless of income.
Ends eligibility for tax credits during special enrollment periods.
Those three provisions combined would reduce spending by $213 billion, but because some people would be impacted by all those provisions total savings would be reduced by $79 billion.
Other provisions
Telehealth services would be covered under high-deductible health plans without cost sharing, at a cost of $4.3 billion.
Health savings account eligibility would be expanded and funds could be be used to pay out-of-network providers, costing $6.4 billion.
Partial measures
Provisions delaying rules on nursing home staffing, enrollment in the Medicare Shared Savings program, and easier enrollment in Medicaid and the Children’s Health Insurance Program were allowed by the Senate parliamentarian only for the portions of the regulations that have not yet gone into effect. The savings have not been estimated.
