Trump’s Megabill Triggers Medicaid Cuts, but Hospitals and Democrats Prepare for the Long Fight

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering the USA

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Photo Credit: Andrew Caballero-Reynolds/AFP via Getty Images

Despite facing a $340 billion blow from President Donald Trump’s sweeping “One Big Beautiful Bill Act,” U.S. hospitals are positioning themselves for a long-term political battle to reverse or soften the impact of the legislation before the cuts take effect in 2028.

The legislation, signed into law on July 3, includes deep reductions in hospital funding by targeting key mechanisms states use to maximize Medicaid reimbursements. Specifically, it limits hospital tax arrangements and caps state-directed payments, both of which are widely used to bolster provider reimbursements. These changes have triggered strong backlash from hospital groups, especially those representing rural and urban facilities with large Medicaid and Medicare patient populations.

But the delay in implementation has bought time for stakeholders to regroup. “Are they really going to want to cut rural hospitals in an election year?” asked Chris Mitchell, president of the Iowa Hospital Association. “We’re going to talk to our delegation early and often about the impact of these cuts.”

Congress has a long track record of delaying or reversing politically unpopular healthcare provisions.

A notable precedent is the eventual repeal of the Affordable Care Act’s so-called "Cadillac tax" on premium insurance plans. With implementation of the hospital cuts pushed to 2028 and work requirements for Medicaid delayed until 2027, lawmakers and lobbyists have time to mobilize.

Some Republicans are already signaling openness to revisiting elements of the legislation. “Things are subject to change. We’re going to have different members of Congress. We’re going to have a new president,” said Rep. Jeff Van Drew (R-N.J.).

Meanwhile, Democrats see the Medicaid cuts as political ammunition for the 2026 midterms, despite the delayed timeline. Their strategy echoes the 2018 midterms, when campaigning against efforts to repeal the Affordable Care Act helped flip dozens of House seats. However, some Democratic strategists caution that the delayed timeline could blunt the emotional impact of the messaging.

“If we say ‘they took it from you,’ but it hasn’t happened yet, it just complicates it,” said California-based strategist Doug Herman. Still, Democratic candidates in red and swing districts such as those in Florida, Kentucky, and Virginia are expected to lean heavily on healthcare messaging.

The legislation’s front-loaded tax breaks, intended to sweeten the deal for voters, may further complicate midterm narratives. However, some of the effects, especially those impacting hospital budget planning, could begin to surface sooner.

“There’s going to be a ripple effect,” said Cherlynn Stevenson, a former Kentucky lawmaker now running for Congress. “We just will have to remind voters that provisions of the bill are still coming, that deadlines are looming.”

In the Senate, the debate over healthcare funding continues, with lawmakers facing a July 18 deadline to approve nearly $10 billion in proposed spending rescissions. Cuts include funds for global health, public broadcasting, and HIV prevention, prompting hesitation from several moderate Republicans. President Trump has warned against defections, threatening to withhold endorsements ahead of 2026.

Beyond Capitol Hill, the Trump administration is exploring controversial new health pricing reforms. FDA Commissioner Marty Makary floated the idea of incentivizing drugmakers to align U.S. prices with those in other high income countries a significant policy shift that would tie regulatory perks to pricing behavior.

As hospitals brace for long-term battles over funding, and Democrats prepare for a midterm fight, the effects of the megabill are poised to echo well beyond the Capitol. The question now is not just how but when its full consequences will unfold.