President Trump signed the One Big Beautiful Bill Act (H.R. 1) into law on July 4. The sweeping package advances many of the President’s top legislative priorities while also making deep cuts to Medicaid, health coverage, and higher education programs. According to the Congressional Budget Office (CBO), the bill would increase the deficit by $3.3 trillion over the next decade, and cut Medicaid by $930 billion. These cuts to Medicaid – along with other health care policy changes – are projected to leave at least 17 million Americans without health coverage.
The bill includes provisions that would significantly reduce Medicaid spending, particularly those aimed at restricting enrollment through more frequent eligibility verifications and mandatory work requirements. Under the bill, all adults aged 19 – 64 in the expansion population would be required to demonstrate that they worked, volunteered, or attended school for at least 80 hours in the month prior to enrollment and throughout their time on Medicaid. However, the bill does include an exception for individuals who experienced a short-term hardship event and for those who meet certain exclusions, including medical frailty. Additional provisions would require beneficiaries to submit ongoing documentation of eligibility. It is this burdensome paperwork requirement that is expected to trigger the loss of Medicaid coverage for millions of Americans.
Additionally, the bill directs the Department of Health and Human Services (HHS) to cap state directed payments—which are a mechanism to help state close the gaps between Medicaid and other payers. These provisions, which would reduce the federal share for the Medicaid program, will result in reduced access for patients if states and providers cannot make up the shortfall.
The bill significantly lowers the current 6% cap on provider tax rates in Medicaid expansion states to 3.5% by 2032. These taxes help states fund their share of Medicaid and draw federal match funding. States can then use those payments to provide more funding to the providers that paid the tax.
The revised bill does include an increase to the Medicare Physician Fee Schedule (MPFS) conversion factor by 2.5% in 2026. Notably, this increase is not tied to the Medicare Economic Index or built into the budget baseline creating a cliff in 2027. Additionally, the bill modifies provisions related to orphan drugs under the Medicare Drug Price Negotiation Program. Under current law, the Inflation Reduction Act exempts orphan drugs—those developed to treat rare diseases—from negotiation if they are approved for only one rare condition. This bill will broaden this exemption beginning in 2028 to include orphan drugs approved for multiple rare diseases.
Lastly, the legislation will enact cuts to higher education programs, which will significantly impact medical student borrowers. Specifically, the bill eliminates the Grad PLUS Loan program and income driven repayment plans, beginning July 1, 2026. Additionally, the bill reduces annual and lifetime loan limits for graduate and professional student borrowers. Medical and other professional students will have an annual borrowing limit of $50,000 and an aggregate lifetime limit of $200,000.
ASH engaged with members of Congress to underscore the critical role Medicaid plays in the lives of hematology patients, including providing timely diagnoses, lifesaving treatments, and comprehensive care. Following passage of the One Big Beautiful Bill Act, ASH issued a statement expressing disappointment with the cuts to Medicaid contained in the bill.
As the bill is implemented, ASH is committed to working with the administration as various provisions of the law are implemented and will continue to advocate for Medicaid beneficiaries with hematologic conditions.