Nursing Impacts of the “Big, Beautiful Bill”

As reported by the American Nurses Association

“One Big Beautiful Bill” is Law. With a final House of Representatives vote of 218-214, the One Big Beautiful Bill Act (H.R. 1) was sent to President Donald Trump and signed into law on July 4. This legislation will permanently extend and expand the 2017 tax cuts, plus new tax breaks on tips and overtime pay. The breaks on tips and overtime are set to expire in five years, while the extension of the other tax cuts is permanent. To partially offset its $3.3 trillion price tag, the measure includes reforms that will result in roughly $1 trillion in cuts to Medicaid spending. This could lead to more than 11 million individuals losing coverage according to the Congressional Budget Office. A provision that would have prohibited states from regulating artificial intelligence (AI) for a decade was stripped from the bill.   

Here are key provisions in the final bill text that will impact nurses and their patients:  

• Restrictions on Provider Taxes –The bill reduces provider tax rates to 0% of a provider’s net revenue for states that impose new or increase existing provider taxes to finance their share of Medicaid spending. For states that have expanded Medicaid, the bill cuts existing rates by 0.5% every year starting in Fiscal Year (FY) 2028 until it reaches 3.5% starting in FY 2032. Nursing homes and intermediate care facilities are exempt from the phase-down.  
• Rural Hospital Transformation Program – The measure establishes the Rural Health Transformation Program and allocates $50 billion to the program for FY 2026 through FY 2030. Funding must be used to address eight issues and strategies in rural health systems, including improving access to health care providers, as well as recruiting and training more health care clinicians. The funding must be used for payments for healthcare providers, rural hospital staffing, and certain types of services. The program was created to mitigate the impact of restrictions on provider taxes and other Medicaid reforms on rural facilities and rural access to care. 
• Curtailment of State-Directed Payments – The bill requires HHS to issue rules to limit state directed payments to providers under Medicaid managed care plans. For states that have expanded Medicaid eligibility, the rules cap payments to 100% of the published Medicare payment rate instead of the average commercial rate. For all other states, payments will be capped at 110% of the Medicare payment rate. SDP limits and payments to rural hospitals will be decreased by 10% each year until the allowable limit has been reached.  
• Elimination of Enhanced FMAP for New Expansion States – The legislation eliminates a temporary five percentage increase to the traditional Federal Medical Assistance Percentage (FMAP) rate to states that agree to expand Medicaid eligibility.   
• Adoption of Work Requirements – Starting in 2027 (or earlier with a state waiver), able body adults on Medicaid will be required to work at least 80 hours per month or participate in qualifying activities that include enrollment in an education program or volunteer work. The bill exempts several groups from the work requirements and provides hardship exemptions under certain circumstances. The exemption for parents or caregivers only applies to those with dependent children 13 years old or younger. However, the bill does allow states to choose not to require an individual to verify their exemptions.  
• Increased Frequency of Medicaid Eligibility Checks – The bill requires states to check whether Medicaid beneficiaries meet eligibility requirements twice a year This is expected to be the primary way people lose coverage, due to paperwork and eligibility complications. We also expect varying experiences for patients in different states depending on how they implement verification and staff the verification processes.   
• Moratorium on Implementation of LTC Minimum Staffing Rule – The U.S. Department of Health and Human Services (HHS) will be prohibited, through September 30, 2034, from implementing the ANA-supported Long-Term Care Minimum Staffing Final Rule. The facility assessment and Medicaid transparency provisions of the rule were excluded from the moratorium because they were subject to the Byrd Rule in the U.S. Senate.  
• Adjustment to Physician Fee Schedule Payments – The measure includes a provision that would increase Medicare payment rates to health care providers by 2.5% for 2026.    
• Tax Deduction on Overtime Wages – The bill allows taxpayers making up to $150,000 per year ($300,000 for joint filers) to receive an income tax deduction of up to $12,500 ($25,000 for joint filers) when filing their federal tax returns.