US Hospitals Cut Budgets After New Law
Hospitals across the U.S. are implementing budget cuts in response to the Trump administration's "big beautiful bill" healthcare reform. The service reductions have sparked a political backlash, with Democrats using the issue to attack Republicans ahead of the midterm elections.
The healthcare legislation, officially an act to provide for reconciliation, was signed into law on July 4, 2025. Unofficially known as the "One Big Beautiful Bill Act," its official short title was removed during the Senate amendment process. The bill passed the House with a vote of 218-214 and the Senate 51-50 before being signed by President Donald Trump. A core component of the law is a significant 12% cut to Medicaid spending. The Congressional Budget Office estimates the bill's health provisions will cause 11.8 million people to lose their health coverage by 2034. The law also imposes new work requirements for Medicaid eligibility and restricts states' abilities to use provider taxes to fund their programs. These changes are projected to result in a $661 billion cut to hospitals over the next decade. The cuts stem from several factors, including the expiration of ACA tax credits, reductions in Medicaid spending, and changes to ACA marketplaces. Rural hospitals are expected to be disproportionately affected by these funding reductions. Ahead of the midterm elections, the cost of healthcare has become a primary economic concern for voters. Democrats are highlighting the hospital budget cuts and rising insurance premiums in their campaigns. Republicans are defending the cuts as necessary to prevent abuse of the Medicaid program and have proposed a $50 billion investment in rural health to counteract the losses.
