The U.S. House of Representatives recently passed a bill proposing an estimated more than $700 billion in Medicaid cuts during the next decade. The legislation’s potential impacts on community-based hospice care delivery could be significant, according to industry stakeholders.

President Trump’s One Big Beautiful Bill Act includes a budget reconciliation process of tax reductions that could amount to $4.5 trillion during the next 10 years. A significant portion of the spending cuts come from Medicaid. The legislation has hit the Senate floor for consideration after undergoing several changes and passing in the House earlier this month.

The proposed reductions do not sufficiently address care improvements and will reduce access to care for millions of Americans, according to the National Alliance for Care at Home. Greater opportunities exist to find a common ground around more reasonable program integrity provisions to the Medicaid program, as well providing more person-centered, less costly services, according to the Alliance.

“The severe reduction in federal Medicaid spending … will have a sharply negative impact on eligibility and access to care,” the Alliance said in a statement shared with Hospice News. “We understand this process is not yet complete, and we strongly encourage the Senate to rethink the spending cuts approved by the House and work with health care stakeholders to craft legislation that both safeguards taxpayers’ money and protects access to care for millions of older adults, people with disabilities and children with special care needs.”

The cost, access impacts

The legislation aims to reduce fraud, prevent “wasteful spending” and stop “abusive financing practices” within the Medicaid reimbursement realm, according to the bill’s language. The total potential Medicaid savings could amount to $172 billion over the next decade.

If enacted, the legislation could lead to a 4% reduction in household resources among the lowest socioeconomic populations, largely from Medicaid cuts and food aid, according to the Congressional Budget Office (CBO). An estimated 10.3 million Americans could lose Medicaid coverage, while nearly 8.6 million individuals will be left uninsured, a recent CBO report projected. This includes millions of serious and terminally ill individuals dually eligible for Medicare who rely on Medicaid coverage, according to CBO.

The bill aims to ensure accurate payments to pharmacies avoid “spread pricing” practices while also modifying Medicaid coverage requirements, including for the Children’s Health Insurance Program (CHIP). It also reduces funding for state Medicaid expansion, limiting coverage growth and access across the country. The legislation includes a moratorium on new or increased health care provider taxes and changes to uniformity waivers.

The bill would also change the ways home equity is considered when determining Medicaid eligibility and establish work requirements for many beneficiaries.

The budget reconciliation legislation is “gravely concerning” for adult and pediatric providers of home- and community-based services such as home health, hospice and palliative care, the Alliance stated.

Direct financial impacts to hospice providers could be minimal, but their patient populations could see ripple effects if the legislation passes, said Damon Terzaghi, senior director of Medicaid and home community-based services at the Alliance.

Patients who are dually eligible for Medicare and the Medicare Hospice Benefit could experience greater difficulty in receiving supportive health care and nonmedical resources, according to Terzaghi.

“Hospice has mandatory minimum payment requirements established by the federal government that states have to meet, so it tends to be a little bit more protected,” Terzaghi told Hospice News. “We don’t anticipate states removing the hospice benefit. It’s not a huge cost driver. But there are definitely concerns. Individuals losing coverage in the non-medical, personal care and other types of home health care [that] is probably going to be more subject to the eligibility and individuals losing coverage from the change in home equity and then the work requirements.”

The bill also proposes to modify the Medicare physician fee schedule by reducing their overall reimbursement rates during the next few years, said Tao Qiu, senior health care equities research analyst at the firm Macquarie Group Limited.

“[Section 44304] eliminates the existing CY2025 physician fee schedule update formula that reduces growth of Medicare physician payments over time,” Qui said in the report shared with Hospice News. “For CY2026, conversion factor is updated by 75% of the Medicare Economic Index (MEI) increase. For CY2027 and beyond, the update will be 10% of the MEI increase.”

Requirement changes, patient impacts

Some home-based hospice providers may face elevated reimbursement risks, higher labor turnover and increased regulatory burdens if the legislation passes, according to the Macquarie report.

The legislation could limit Medicaid coverage of non-U.S. citizens and incarcerated individuals, increase the frequency of eligibility redetermination, remove “good faith” overpayment waivers, tighten enrollment requirements and remove coverage of certain procedures, said Qiu.

Among the legislation’s goals is to improve beneficiary enrollment processes in the Medicaid Savings Programs and Children’s Health Insurance Program (CHIP), among other programs. If enacted, the bill would increase oversight of Medicaid eligibility verification.

The legislation could potentially “devastate” communities of older adults and the providers who care for them, Katie Smith Sloan, president and CEO of LeadingAge, said in a letter to the House of Representatives’ Energy & Commerce Committee.

The bill could also potentially freeze or lower the home equity limit threshold for Medicaid eligibility for beneficiaries receiving long-term care services. Changing this threshold would force difficult decisions — potentially pushing seniors out of their homes or leaving them without access to care, Smith Sloan stated in the letter. Additional impacts could include increased workforce strain during a time of prolific health care staffing shortages, she indicated.

“Medicaid is an interconnected ecosystem—if you target one piece, the whole system will be impacted,” a LeadingAge spokesperson told Hospice News in an email. “While we share the goal of quality care, the current mandate does not account for the severe workforce shortages facing our sector. We call for more realistic, sustainable solutions that recognize provider constraints and prioritize both resident care and staff well-being.”

If enacted, the bill would impose a new Medicaid requirement for adults without dependents or disabilities up to the age of 64 to work for a minimum of 80 hours monthly, or to engage in community service, work training programs or be enrolled in school. This requirement may make Medicaid an unattainable option for those with serious and terminal conditions who are unable to engage in work or other activities.

The bill’s new work requirements would take effect in December 2026 and are seen as “cruel” and “inappropriate” new rules, Lisa Lacasse, president of the American Cancer Society Cancer Action Network, said in a social media statement. Implementation of the new work requirements comes years ahead of previously proposed timelines, with difficult challenges for patient populations as their conditions progress, Lacasse indicated.

“Moving up implementation of work requirements in this life-threatening proposal from 2029 to 2026 means cancer patients in active treatment today or others diagnosed between now and the end of 2026 may lose their coverage and access to care in the middle of their treatment plan. This is unacceptable,” Lacasse said. 

More advocacy groups have called on lawmakers to rethink the considerations outlined in the new legislation.

The bill’s proposed Medicaid cuts, requirements and increased oversight leave wider gaps among underserved patient populations, according to ANCOR, an advocacy group for community-based care providers supporting individuals with intellectual and developmental disabilities.

Further the legislation could result in a lack of community-based medical, psychosocial and practices resources, with quality of life and patient rights “hanging in the balance,” ANCOR CEO Barbara Merill said in a statement shared with Hospice News.

“We urge all Senators to reject Medicaid cuts and to consider the impact of reducing the supports many of us take for granted that enable us to live, work and thrive in our communities,” Merill said. “All lawmakers should remember that real lives of real people, and the very prosperity and well-being of people with disabilities, are at stake when you take up this budget legislation.”