This week, the U.S. Senate unveiled its version of the budget reconciliation bill — an even more damaging iteration of HR 1, the “One Big Beautiful Bill.” The Senate proposal deepens Medicaid cuts to more than $900 billion, removes the House’s modest Medicare physician payment update and retains student loan caps that could derail future access to care.

In addition to the harmful provisions already included in the House bill, the Senate proposal would:

• Slash provider taxes used by 49 states to fund Medicaid, including California’s MCO tax. The Senate bill lowers the maximum allowable tax rate nearly in half — from 6% to 3.5% — in the 41 states that expanded Medicaid under the Affordable Care Act.
• Cap state-directed payments for mostly public hospitals and the UC system. The bill limits payments to Medicare rates in the 41 Medicaid expansion states and 110% of Medicare in non-expansion states, with annual reductions of 10%.
• Eliminate Medicare physician payment relief. Because the House version fails to stop the 2025 payment cut of 2.8%, the bill would not return physicians to 2024 payment levels until 2030. However, the House bill does provide a positive 2.25% update in 2026. The Senate bill fails to address Medicare physician payment reform altogether – jeopardizing seniors’ access to care and threatening the long-term viability of physician practices.
• Expand Medicaid work requirements to include parents of minor children over age 14.

At the same time, the bill maintains the harmful student loan caps introduced in HR 1, including a $150,000 borrowing limit for undergraduate and medical school, far below the national average debt of $250,000. It also disqualifies nonprofit hospital residency hours worked from counting toward Public Service Loan Forgiveness (PSLF), further threatening the physician workforce pipeline.

CMA is aggressively opposing both HR 1 and the Senate’s even more damaging amendments. These proposals won’t just harm vulnerable patients — they threaten to destabilize our entire health care system.

A particularly devastating provision is the $400 billion cut to Medicaid provider taxes — a critical source of funding used by 49 states to sustain their programs. Despite Republican claims that these taxes amount to “fraud and abuse,” provider taxes are a federally sanctioned, bipartisan financing tool adopted by state legislatures across the country. They have kept rural hospitals, clinics, nursing homes, and physician practices afloat and ensured patients can access needed care.

The Senate bill’s broader Medicaid cuts — totaling nearly $900 billion — are projected to result in coverage losses for nearly 8 million enrollees. These include children, seniors, veterans, pregnant women, low-income working families, and people with disabilities who rely on Medicaid for essential, often lifesaving care.

“This bill is a cruel and unnecessary existential threat to the Medicaid program — one from which patients and our health care system may never recover,” said CMA President Shannon Udovic-Constant, M.D. “Its consequences will be especially severe in California’s rural communities.”

Next Steps

Senate and House leadership are working to pass the bill before the July 4 recess. CMA urges Congress to pursue more balanced solutions that protect the health and well-being of the nation — not dismantle the care patients and communities rely on.

CMA also continues to urge physicians and allies to contact their U.S. senators and voice their concerns about the consequences of HR 1 and the Senate proposal.

Take action today at PhysiciansForMedicaid.org.

For More Information

• CMA HR 1 Fact Sheet with Senate changes
• Coalition of State Medical Associations Letter to Senate Leaders
• CMA Letter to CA Congressional Delegation
• CMA Letter to U.S. House Energy & Commerce Committee