Opinion -- Final Federal Budget Bill Includes Devastating Cuts to Medicaid

By Jon Doolittle

The U.S. House today adopted H.R. 1, routinely referred to as the “One Big Beautiful Bill,” as amended by the Senate earlier this week. The bill will now be sent to President Trump for his signature.

MHA, Missouri hospital leaders and you, supported by partners including Missouri Gov. Mike Kehoe and other health care organizations, have worked since January to provide impact projections and relay our concerns to Missouri’s congressional delegation as they pursued a nearly $1 trillion funding decrease over 10 years to the Medicaid program. We are disappointed that such significant Medicaid cuts are poised to become law, because Missouri’s share of these cuts will harm those covered by Medicaid, all Missourians’ access to health care, the ability of hospitals to provide services and our state’s budget.

Despite this new framework of reduced funding, I want to thank you for your personal outreach to your congressional representative and U.S. senators, as well as asking your friends and family to do the same. Your voices helped prevent more severe cuts and provided fuel to Sen. Josh Hawley in his work to help secure a nationwide, five-year $50 billion Rural Health Transformation Program scheduled to begin next year that should aid already financially strained rural hospitals. The bill also provides for beneficial increases to the Medicare physician fee schedule.

Here in Missouri, H.R. 1 will result in as much as $5.7 billion in funding cuts to Medicaid, known as MO HealthNet, over the next 10 years due to these provisions:

Phased-in cuts, beginning in 2028, to provider taxes to 3.5% — a rate that will result in a nearly $1.2 billion annual loss to Missouri's health care funding when fully implemented

Capped state-directed payments, an important funding system for hospitals, at 100% of Medicare reimbursement rates

Unfortunately, we estimate that Missouri’s share of the above-mentioned Rural Health Transformation Program and physician fee increases will be outweighed by the provider tax and state-directed payment cuts by approximately 2030. Further, while the cuts directly impact hospitals, the transformation program funding can flow to other providers in the health care system.

As the “One Big Beautiful Bill” chapter of our advocacy closes, I remind you that there’s always a next step. Your MHA team is working through the full details of the 900-page bill and are dedicated to advantaging our member hospitals and health systems in the near and long term. Just as we did in January when the budget reconciliation bill was in its infancy, we will continue to work with our members, our partners and other experts to mitigate these impacts and set our goals to help Missouri’s hospitals and health systems achieve their current and future missions in service of their communities.

Jon Doolittle is the President of the Missouri Hospital Association. He previously served as the CEO of Mosaic in Albany and is a graduate of Albany High School.