President Donald Trump signed the One Big Beautiful Bill Act on July 4, which included historic cuts to Medicaid and other significant shifts to healthcare policy.
Here are five ways that the new U.S. budget will impact physicians:
1. The bill included a temporary one year increase of 2.5% to the Medicare physician fee schedule.
2. However, despite the bump in pay, many physicians remain concerned about cuts to Medicaid. The bill added new requirements to Medicaid that will require states to establish their own work requirements as early as January 2027, and also increased oversight of Medicaid-related taxes.
3. The Congressional Budget Office estimates the bill will lower Medicaid spending by around $1 trillion but leave around 11.8 million more people uninsured over the next nine years. The shift would have a large financial impact on hospitals, which will then affect physician practices. Medicaid patients made up about 17% of the average physician’s caseload in 2016, according to a July 16 report by Medscape Medical News.
“I am worried about what happens to Medicaid,” said Paul Bruning division administrator for hand and sports medicine at Duke University in Durham, N.C., during a session at the Becker’s Spine, Orthopedic and Pain Management-Driven ASC Conference in Chicago in June. “When you’re looking at large hospitals that are even struggling, where are the patients going to go? They’re coming to us and we’re going to be struggling, and that’s all going to be uncompensated care. How are we going to be able to provide that care?”
4. The bill also placed limits on federal loans for professional programs, including medical school. Federal loans for medical school are now limited to $50,000 a year, with a total cap of $200,000. The average medical school debt exceeds $234,000, according to an Education Data Initiative report, and tuition and living expenses for private institutions can top $87,000 per year.
The Association of American Medical Colleges told Medscape that the budget package’s elimination of the Grad PLUS loan program “will affect many prospective medical and other health profession’s students and worsen the nation’s persistent doctor shortage.”
5. The budget does allow patients to use their Health Savings Account to pay for monthly fees charged by direct primary care providers for the first time. This may include office visits, but not major procedures, lab tests or prescription drugs. Patients can use these accounts for up to $150 per person or $300 per couple, a figure that will be tied to inflation moving forward.
