By Sneha S K, Mariam Sunny and Patrick Wingrove
(Reuters) -The U.S. House of Representatives passed President Donald Trump’s tax-cut and spending bill on Thursday, which contains sweeping changes to the government’s Medicaid healthcare program covering about 71 million low-income Americans.
Nearly 12 million of those enrollees could lose their insurance under the program if the bill is implemented and those changes become law, according to a June estimate from the Congressional Budget Office.
Below is a breakdown of some of the key healthcare provisions in the current draft of the bill and how they could affect enrollees and businesses:
Frequent eligibility checks
U.S. states would be required to conduct eligibility checks at least twice a year for the roughly 20 million Medicaid enrollees covered through the Affordable Care Act (ACA) expansion, rather than yearly. These “expansion enrollees” are people with incomes of up to 138% of the federal poverty level, which roughly translates to $21,597 a year in 2025.
The new bill also includes provisions to prevent Medicaid beneficiaries from simultaneously enrolling in more than one state Medicaid program.
Mandatory work requirements
Medicaid enrollees are not currently subject to work requirements under the law, but the new bill proposes that adults aged 19-64, with a few exceptions, complete a minimum of 80 hours of work or community engagement activities a month or be enrolled in an education program at least half time to qualify for the program.
The requirements will apply from January 1, 2027.
Scale back on provider taxes
Medicaid is jointly financed by the federal and state governments. States help cover their share by collecting taxes from hospitals and other healthcare providers, known as provider taxes.
The bill would tighten federal oversight of those taxes by replacing the current 6% cap on provider tax revenue with a new limit that is indexed to inflation. It would also restrict how states structure the taxes, including stricter rules on what kinds of services can be taxed and how payments are distributed across providers.
While the bill does not reduce provider tax rates directly, the changes could make it harder for states to use these taxes to draw additional federal Medicaid funds.
The final version of the bill also sets up a $50 billion rural hospital fund to help rural providers who have argued that the provider tax changes would force them to scale back service.
Tightening verification
Medicaid is currently open to some immigrants who are lawfully present in the country, though many – including green card holders – must wait five years before they can sign up.
The new bill removes Medicaid eligibility for some non-citizens, including refugees, certain abused spouses and children, and people granted asylum.
Increased cost-sharing requirements
The current law gives states an option to impose nominal co-payments on individuals with incomes exceeding 150% of the federal poverty level.
The new bill requires states to impose mandatory cost-sharing on expansion enrollees earning more than 100% of the federal poverty level. Co-pays can reach up to $35 per service, with some exemptions, including emergency care and preventive services.
WHAT DO ANALYSTS SAY?
The bill could put a strain on the finances of insurers and hospitals, analysts said.
Spencer Perlman, director of healthcare research at Veda Partners, estimated Medicaid enrollment could drop by 5 million compared to current projections.
Since Medicaid insurers are paid a fixed amount per member, the decline could directly hit revenues of insurers like Elevance Health, Centene, and Molina Healthcare, which have significant exposure. In 2024, over 88% of Molina’s total membership came from Medicaid plans, Centene derived about 46%, and Elevance about 19.5%.
Analysts also warned of risks to insurers’ exchange businesses, forecasting ACA marketplace enrollment to fall to 18 million by 2027 from 24 million in 2025, due to eligibility restrictions and likely subsidy expirations.
“For companies like Centene, this is a double whammy,” Perlman said.
Hospitals face similar challenges, though a proposed $50 billion rural hospital fund could offset some reimbursement cuts, Jefferies analyst Brian Tanquilut said.
Drugmakers are expected to see little impact, as Medicaid typically represents under 15% of their U.S. sales, UBS analyst Trung Huynh said.
(Reporting by Mariam Sunny, Sneha S K in Bengaluru ; Additional reporting by Bhanvi Satija and Mrinalika Roy in Bengaluru and Patrick Wingrove in New York; Editing by Sriraj Kalluvila and Alistair Bell)
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