The House narrowly passed a sweeping Republican-backed bill Thursday that could significantly alter Medicaid, with cuts of $700 billion to the program over the course of 10 years.

“Technically this is lower than some projections of Medicaid cuts, but it’s still a dramatic reduction in federal funding for Medicaid programs. As states figure out how to work with fewer federal dollars over that 10-year span, it’s hard to imagine a scenario in which nursing homes avoid Medicaid funding cuts and other negative outcomes,” Fred Bentley, managing director for the post-acute and long-term care and senior living practice at ATI Advisory, told Skilled Nursing News.

The Congressional Budget Office (CBO) estimates that the bill will trigger cuts of $500 billion from Medicare and $700 billion in Medicaid funding to states over the 10-year period.

“The details on how exactly where these cuts would fall aren’t clear, but here again, it’s hard to imagine nursing homes escaping unscathed from Medicare spending reductions,” Bentley said.

The bill passed by a razor-thin 215-214 vote after a tense all-night debate. All Democrats and two Republicans voted against it, as some lawmakers missed the vote.

New restrictions would shift more program costs to states and are projected to save an additional $300 billion over ten years.

‘Ugly’ consequences

Katie Smith Sloan, president and CEO of LeadingAge, dubbed the bill “cold-hearted legislation” with “ugly” consequences – a bill famously referred to by President Donald Trump as the “Big Beautiful Bill.”

“If enacted, the policies in the House-passed bill will have a devastating impact on millions of older adults and their families who rely on Medicaid and Medicare for health care and long-term care and services, and on our nonprofit provider members who serve them,” Smith Sloan said in an emailed statement.

LeadingAge, the largest association of nonprofit providers of aging services, is planning to work with senators to oppose the House’s purposeful removal of at least 10 million people from their health insurance, Smith Sloan said, noting that the federal Medicaid cuts would “shred the health safety net for older adults and ultimately drive up health care costs.”

Major changes proposed to Medicaid could result in 7.6 million Americans losing health coverage over the next decade, the CBO estimates. The plan also includes new work requirements for Medicaid expansion enrollees starting in December 2026, with more frequent eligibility checks.

“Several proposals in the budget bill create headwinds to health insurance coverage, including rolling back rules that facilitate Medicaid enrollment and eligibility checks,” Tao Qiu, senior health care equities research analyst at Macquarie Equity Research, said in his investment note.

All in all, these changes aim to save less via Medicaid cuts than the original proposal put forth by House Republicans.

“Medicaid cuts are less severe than expected but could significantly impact the health care industry by 2026,” Qiu said, noting that key changes include work requirements, which will account for $300 billion of the cuts, with tighter eligibility and enrollment rules reducing $230 billion in funding.

Decision to freeze provider taxes

The American Health Care Association and National Center for Assisted Living (AHCA/NCAL) raised concerns over the decision to freeze provider taxes, warning that the move will impact Medicaid funding for residents in nursing homes.

Medicaid already falls short in covering the full cost of long-term care, Clif Porter, President & CEO at AHCA/NCAL said, and states depend on provider taxes to help close that gap and ensure continued access to services. Since nearly two-thirds of nursing home residents depend on Medicaid for their daily care, maintaining this funding is absolutely essential, he said.

“We now urge the Senate to restore the flexibility to the states around provider taxes and protect seniors from devastation any cuts will cause,” Porter noted in an emailed statement. “Medicaid must have proper resources and states must have proper adaptability to meet their obligations. This legislative process may be long and compromise may be challenging, but the one thing senators must not compromise is Medicaid for our nation’s most vulnerable and growing elderly population.”

Moreover, consumer advocates are also strongly condemning the House-passed legislation, warning it will harm millions of older adults, people with disabilities, and their families.

The bill introduces strict work requirements for adults up to age 65 – policies these critics say effectively function as coverage cuts. Many at risk of losing benefits due to these requirements include older adults, according to the Center for Medicare Advocacy.

The bill now moves to the Senate, where revisions are expected, with warnings from federal officials that the U.S. could hit its debt ceiling in August. The bill raises the ceiling by $4 trillion, increasing pressure on Congress to finalize legislation before the July recess.

If approved by both the House and Senate, President Trump is expected to sign the finalized bill by late July.

While Trump personally rallied Republicans to support the bill, which faced resistance from fiscal conservatives concerned about its projected $3.3 trillion addition to the deficit over the next decade, he did warn Republicans against pushing for even deeper Medicaid cuts, according to a USA Today story.