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Reconciliation signed into law

July 9, 2025

On July 4, President Trump signed HR.1, the Reconciliation bill into law. The legislation narrowly passed with all Democrats opposing. Included is a temporary 2.5% increase in Medicare Physician Fee Schedule payments for 2026; preservation of the current pass-through entity tax; and nearly $1 trillion in Medicaid spending reductions.

Health care providers, patients and hospitals will be affected as nearly 12 million people are projected to lose their health insurance coverage, according to estimates from the Congressional Budget Office. The deficit increases under HR. 1 are expected to trigger Medicare sequestration cuts to providers of about $500 billion, unless waived. Congress is now expected to turn its attention to other health policy priorities, potentially including bipartisan issues, as it approaches a September 30 government funding deadline.

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