On July 1, 2025, the US Senate voted 51–50, to advance its version of H.R. 1, continuing the budget reconciliation process. Like the bill that the House passed in May, the Senate language calls for making significant changes to the Medicare, Medicaid, Affordable Care Act (ACA) Marketplace programs, as well as health savings accounts (HSAs) and publicly funded programs such as the Supplemental Nutrition Assistance Program.
Relative to the House bill, however, the Senate differs substantially in approach and scope. Thus, the bill has been sent back to the House for consideration. Speaker of the House Mike Johnson (R-LA) intends to accelerate voting with the goal of clearing the legislation in the House by July 4, 2025.
Key Differences Between House and Senate Bills
Notable differences between the House and Senate packages pertain to the following:
- Medicaid Provider Payments: The Senate version includes more restrictive changes to federal Medicaid provider taxes and state-directed payment policies. These changes are expected to affect hospitals that rely on Medicaid supplemental payments. The Senate bill also would create a $50 billion Rural Health Transformation Program to mitigate financial strain on healthcare providers in rural communities. The provision includes several stipulations regarding distributions, allocations, eligibility standards, and permissible uses of the funds, which will likely prompt considerable ongoing engagement from stakeholders if signed into law, particularly among hospitals and clinics that will face substantial headwinds under other components of the legislation.
- ACA Marketplaces: Like the House bill, the Senate version includes provisions to recapture full ACA subsidy amounts, restrict subsidy eligibility for certain immigrant populations, and require verification of ACA subsidy eligibility. The Senate bill neither appropriates funding for cost sharing reduction subsidies nor includes provisions regarding the Marketplace Integrity and Affordability rule, which the Centers for Medicare & Medicaid Services (CMS) finalized on June 20, 2025. In addition, the Senate bill offers several smaller flexibilities intended to increase usage of HSAs but does not include the full suite of HSA changes included in the House bill. The Senate language also does not call for expanding individual coverage health reimbursement arrangements (ICHRAs).
- More Limited Medicare Package: Although the Senate language restores the ORPHAN Cures Act and adds a modest one-year payment increase under the Medicare Physician Fee Schedule (PFS), the bill omits a number of significant Medicare policies included in the House version, including a much broader PFS investment tied to the Medicare Economic Index, as well as multiple pharmacy benefit manager (PBM) reforms under Medicare Part D. The Senate legislation also excludes two Medicaid PBM provisions that the House had included.
Estimates from the Congressional Budget Office
The Congressional Budget Office (CBO) has provided several estimates of the cost and coverage impacts of the healthcare and tax provisions in multiple versions of the reconciliation legislation. CBO has provided cost estimates for the House-passed bill, as well as the Senate substitute amendment, but has yet to release information on the final Senate version. Of note, CBO estimated the following:
- The Medicaid, Medicare, and ACA related provisions in the Senate substitute amendment would reduce healthcare spending by approximately $1.15 trillion over the next 10 years.
- The House bill would, by 2034, add 10.9 million people to the number of uninsured individuals in the United States.
What to Watch
Stakeholders should plan for the financial, policy, and operational impacts of the many provisions that could be enacted, including:
- New administrative requirements for enrollment that will place additional obligations on individuals seeking coverage and which will require more state resources to implement and manage. Community engagement and work requirements are scheduled to take effect December 31, 2026.
- Downward Medicaid financial pressures due to fewer federal funds, which will stress state budgets and states’ ability to maintain existing programs. This situation could lead some states to scale back eligibility for Medicaid, limitenrollment for optional programs, or some combination of these. Additionally, states could be expected to address increases in uncompensated care among their providers.
- A pause on implementation of previously finalized regulations that streamlined the Medicaid enrollment process for individuals.
The combination of the House and Senate reconciliation bills and the recently finalized Marketplace Program Integrity and Affordability rule indicate an uncertain future for cost sharing subsides and enhanced premium tax credits in Marketplace programs. Healthcare stakeholders should prepare for the impact of the expiration of the enhanced premium tax credits would have on benefit packages, enrollee risk profiles, uncompensated care, and other key issues affecting access, cost, and outcomes.
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