Budget reconciliation bill: A big setback to our nation’s health

Updated: July 7, 2025

IDSA and HIVMA are deeply concerned by the infectious diseases and public health consequences of the costly 2025 budget reconciliation bill (H.R. 1) that will take health care coverage away from an estimated 17 million Americans and erase critical gains over the last decade in dramatically lowering the rate of Americans without health insurance. The bill signed into law by President Trump July 4 was passed by the Senate July 1 and then quickly advanced without changes by the House of Representatives July 3. 

After Senate passage, HIVMA warned lawmakers of the potentially life-threatening consequences of hundreds of thousands of people with HIV and vulnerable to HIV losing access to HIV treatment and prevention services. IDSA urged Congress not to take medical care away from millions of Americans, noting that the bill would lead to a sicker population, greater administrative burden and higher health care costs. 

It will now be up to the states to do the hard work of implementing the massive deluge of new administration and bureaucratic requirements for low-income individuals and families to obtain and maintain their health care coverage. IDSA and HIVMA urge state policymakers to partner with infectious diseases and HIV health care professionals and community members as they implement the new requirements to mitigate the harms to people with and affected by HIV and other infectious diseases and to public health. 

Key Medicaid provisions
Health coverage losses will come from unprecedented cuts to the Medicaid program and from Affordable Care Act (ACA) plan policy changes. Medicaid is the largest health insurer for people with HIV, with more than 40% having Medicaid coverage, and is an important source of coverage for HIV pre-exposure prophylaxis users. The cuts to Medicaid largely result from people losing coverage due to new eligibility and enrollment requirements and restrictions on state funding mechanisms. Highlighted below are a few key Medicaid policy changes that will impact the ID and HIV community. For a more comprehensive summary, see KFF’s Health Provisions in the 2025 Federal Budget Reconciliation Bill.  

“Work” or “community engagement” requirements 

• Require most Medicaid expansion enrollees between the ages of 19 and 64 to report 80 hours of work or “community engagement” activities a month.
• Exempt a limited number of adults, including parents of dependent children 13 and under and those who are medically frail.
• If disenrolled from Medicaid due to failure to meet work requirements – also prohibited from receiving subsidized ACA coverage.
• States required to implement by Dec. 31, 2026, or earlier at state discretion.
• HHS secretary may extend the deadline to Dec. 31, 2028, for states demonstrating a good faith effort in implementing the bill. 

Why it matters:

• A majority of Medicaid enrollees work, with the exception of those who are unable because they are disabled.
• Evaluations of states that have enacted work requirements, such as Arkansas and Georgia, show that people who are working have been cut off, leading to lower levels of enrollment and increased administrative costs. 

More frequent eligibility determinations for the Medicaid expansion population 

• Require states to conduct eligibility determinations every six months for the Medicaid expansion population.
• HHS secretary required to issue guidance within 180 days of enactment.
• Take effect with renewals scheduled on or after Dec. 31, 2026.

Why it matters:

• More frequent eligibility verifications for Medicaid beneficiaries and people with HIV have been shown to cut off services for people who are eligible and who are in greater need of health coverage and services.

Requires higher cost sharing for some of the Medicaid expansion population

• Requires states to impose mandatory cost sharing of up to $35 on adults with incomes between 100% and 138% of federal poverty levels (or $15,650 to $21,597 per year for an individual).
• Primary care, mental health and substance use disorder services are exempt from cost sharing.  Nominal cost sharing is maintained for prescription drugs.
• Exempts services provided by federally qualified health centers, behavioral health clinics and rural health clinics.
• Takes effect Oct. 1, 2028. 

Why it matters:

• Studies routinely find that higher cost sharing limits access to necessary health care services. 

Restricts the definition of immigrants qualified for Medicaid and the Children’s Health Insurance Program    

• Narrows the definition of immigrants who may be eligible for Medicaid coverage after a five-year waiting period to lawfully present residents, certain Cuban and Haitian immigrants, citizens of the Freely Associated States (COFA migrants) lawfully residing in the U.S. and lawfully residing children and pregnant adults in certain states that cover them.
• Takes effect Oct. 1, 2026.

Why it matters:

• In 2023 – 20% of lawfully present immigrants were uninsured compared to an 8% uninsured rate among U.S.-born citizens.
• People without health coverage are more likely to delay seeking care, including for HIV and other infectious diseases. 

Prohibits funding for essential community providers who provide abortion services

• Prohibits Medicaid payments for essential community providers primarily engaged in family planning services or reproductive services and who provide abortions and received $800,000 or more in payments from Medicaid in 2023.
• Takes effect upon enactment for one year.

Why it matters:

• Planned Parenthood and other reproductive health clinics are important access points, and in some areas, the only source for HIV and sexually transmitted infections testing and other prevention services, including condoms, HIV PrEP and post-exposure prophylaxis. 

Temporary bump up in Medicare physician payment provision 

• The final bill includes a temporary, one-year increase of 2.5% to the Physician Fee Schedule conversion factor for all services provided between Jan. 1, 2026, and Jan. 1, 2027. The House-passed version of the bill would have tied physician payment updates to the Medicare Economic Index, a measure of practice cost inflation, beginning in 2026.

Why it matters:

• Later this summer, the Centers for Medicare and Medicaid Services is expected to release its annual Medicare Physician Fee Schedule proposed rule for 2026. These rules frequently include reductions to the conversion factor, which result in a reduction in physician reimbursement. This provision in the reconciliation bill will proactively address a potential cut or provide an increase to physician reimbursement if there is not a cut in the 2026 proposed rule. 

Notable omissions from the House bill 
The Senate removed a provision that prohibited the use of Medicaid funding for “gender transition procedures” for minors and adults because the parliamentarian ruled that it would require 60 votes rather than a simple majority. A provision that would have penalized states that provided Medicaid coverage to immigrants with state funding also was removed because of concerns raised by the parliamentarian. 

About IDSA and HIVMA
The Infectious Diseases Society of America is a global community of 13,000 clinicians, scientists and public health experts working together to solve humanity’s smallest and greatest challenges, from tiny microbes to global outbreaks. Rooted in science, committed to health equity and driven by curiosity, our compassionate and knowledgeable members safeguard the health of individuals, our communities and the world by advancing the treatment and prevention of infectious diseases. Within IDSA, the HIV Medicine Association is a community of health care professionals who advance a comprehensive and humane response to the HIV pandemic, informed by science and social justice. Visit idsociety.org and hivma.org to learn more.