Five underreported health changes in ‘big beautiful bill’

Editor's Note

Although the newly enacted One Big Beautiful Bill Act is best known for major Medicaid cuts and a temporary Medicare Physician Fee Schedule increase, it also carries significant policy changes that could affect providers, patients, and the physician workforce, MedPage Today reported July 11. The article lists five specific examples:

• It prohibits new or increased Medicaid provider taxes. States may no longer establish new provider taxes or raise the rate on existing ones—mechanisms some have used to increase federal Medicaid matching funds and recycle the money back to providers. As detailed in the article, CMS and conservative critics have likened the tactic to “money laundering.”
• It restricts Medicaid funding for Planned Parenthood. For one year, federal Medicaid funds—whether distributed through a state or a managed care company—may not be used for “prohibited entities.” As defined in MedPage Today, these are nonprofit essential community providers primarily engaged in family planning and reproductive health services that also perform abortions outside of exceptions for rape, incest, or life endangerment, and that received at least $800,000 in Medicaid funds in FY 2023.
• It eliminates the federal deduction for state pass-through entity taxes. Citing testimony from The American Osteopathic Association (AOA), MedPage Today reports that deductions for these entities, defined as businesses in which profits “pass through” to the owners, have been eliminated. AOA further stated that this change would increase the tax burden on small, physician-owned practices—many of which are structured as S corporations or partnerships—and could threaten their financial viability.
• It caps graduate federal loans and eliminates Grad PLUS loans. The AOA warned this could limit access to medical education, especially for students from disadvantaged backgrounds, MedPage reports.
• It expands eligible uses of health savings accounts. According to the article, the law permits individuals to use HSA funds for direct primary care arrangements and allows high-deductible health plans to cover telehealth services before the deductible is met.