The One, Big, Beautiful Bill changes Medicaid policies, health care regulations, and tax credits — with potentially significant implications.
Rapid activity occurred on Capitol Hill recently on the budget reconciliation bill, referred to as the One, Big, Beautiful Bill because it combines many priorities into one package. As the bill moves through the legislative process, changes are expected.
What follows here is only a sample of changes included in the 1,000+ page bill as passed by the House.
Medicaid reimbursements
Medicaid is a federal-state financed program, meaning both are involved with paying for the program. This is why changes or cuts to provider taxes, for example, at the federal level can have direct impacts on state budgets. This then forces state decisions on provider reimbursements, eligibility, or other policies.
Learn more in our recent article,
$880 Billion Potential Federal Medicaid Cuts.
What Medicaid policies are in the legislation?
- Bans new provider taxes and bans changes to existing ones
- Tightens provider tax methodology requirements
- Prohibits states from requiring Medicaid reimbursements in excess of Medicare reimbursement rates (110% of Medicare rates in the case of states without ACA expansion)
- Requires work for able-bodied adults (December 31, 2026)
- Mandates cost-sharing for expansion adults (up to $35)
- Requires more frequent eligibility verifications
- Cuts funding to certain states covering undocumented individuals
- Shortens retroactive eligibility (from 90 days to 30 days)
- Delays Medicaid disproportionate share hospital cuts
What other health care policies are in the legislation?
- 10-year moratorium on the nursing home minimum staffing mandate
- Updates the Medicare physician fee schedule conversion factor by 75% of the Medicare Economic Index (January 1, 2026). After 2026, updates are by 10% of MEI
- Removes physician reimbursement payment increase for being in an advanced alternative payment model
- Allows Rural Emergency Hospital designation for some closed hospitals
- Makes various changes to ACA exchanges
What tax and energy credit policies are in the bill?
There are many tax policies in the legislation, but here are several that may be of most interest to the health care and life sciences industry.
- Extends the time period the IRS can challenge an employee retention credit (ERC) claim to no earlier than six years from the date the claim is filed and ends processing of refunds for ERC claims filed after January 31, 2024
- Expands the tax on excess compensation for tax-exempt organizations
- Extends current tax rates and brackets for individuals, estates, and trusts
- Increases state and local tax deductions (SALT) cap for individuals, estates, and trusts
- Changes and gradually phases out green energy (Inflation Reduction Act) tax credits
- Restores immediate deduction of domestic research and development
What’s next for this legislation?
Some Senators have already expressed concerns with the Medicaid policies and industry stakeholders are advocating against them. Other Senators are expressing concerns that the bill fails to sufficiently address the country’s debt.
Stay informed
Please refer to CLA’s comprehensive tax bill article for details and updates, as all of this
is still subject to change.
How CLA can help
There are so many changes swirling — budget reconciliation policies, tax changes, trade and tariff impacts — that it can be overwhelming. Stay calm. Stay informed and stay connected. CLA can help decipher what is happening and suggest potential next steps for you to consider.
Additional resources
Contact us
Want to learn more? Complete the form below and we'll be in touch. If you are unable to see the form below, please complete your submission here.