Reconciliation Bill Signed into Law

Congress has passed and enacted the One Big Beautiful Bill Act, a sweeping tax and budget reconciliation bill, just ahead of President Trump’s deadline. The Senate approved their revised measure by a vote of 51-50, with Vice President Vance casting the tie-breaking vote. The House gave final approval to the Senate-amended version on July 3, and the President signed it into law on July 4.

The bill makes significant reforms to Medicaid and the Affordable Care Act (ACA) Marketplaces. The legislation reflects a broader effort by the current Administration to reduce federal spending on health and safety-net programs, particularly through restructuring Medicaid. The final package includes a phased reduction in provider tax limits for expansion states from 6% to 3.5% by 2031, more frequent eligibility redeterminations, and expanded work requirements – policies that are expected to contribute significantly to overall coverage losses. A previous Congressional Budget Office (CBO) analysis estimated that 16 million people would lose health insurance coverage under similar provisions, primarily Medicaid coverage.

Notably, the bill does not include several House-passed provisions, including PBM contracting and transparency requirements in the Medicare program, but includes a permanent extension of pre-deductible coverage for telehealth in high-deductible coverage, codifies some provisions from the Marketplace Integrity final rule, and maintains a number of beneficial corporate tax reforms. Looking ahead, the removal of PBM reforms creates the possibility for greater momentum to try and advance these reforms in future legislative vehicles.