Final Health Care Provisions in the “One Big Beautiful Bill Act”

On July 4, President Donald Trump signed into law the Republican budget reconciliation package, also referred to as the One Big Beautiful Bill (OBBB) Act. The legislation enacts sweeping changes to tax, immigration, energy, education and health care policy. Among its most controversial provisions are an estimated $1 trillion in reductions to the Medicaid program, with the most significant changes set to take effect in 2028.

The bill cleared its final legislative hurdle on July 3, when House Republicans passed the Senate’s version in a narrow 218-214 vote. Speaker Mike Johnson (R-LA) secured passage following hours of negotiations with both members of the House Freedom Caucus and GOP moderates. A procedural vote held the previous day was left open for more than nine hours, and House Minority Leader Hakeem Jeffries (D-NY) further delayed final action with a record-setting nine-hour floor speech during what is known as the “magic minute.” In the end, only two Republicans—Reps. Brian Fitzpatrick (R-PA) and Thomas Massie (R-KY)—voted against the package.

The House vote followed Senate passage of OBBB on July 1 in a 51-50 vote, with only Sens. Susan Collins (R-ME), Thom Tillis (R-NC) and Rand Paul (R-KY) joining Democrats in opposition to the bill. Vice President JD Vance cast the tie-breaking vote after a more than 24-hour vote-a-rama. The final amendment, known as the wraparound amendment, included several changes to ensure compliance with the “Byrd Rule” and to address concerns raised by moderate Republicans. Sens. Rick Scott (R-FL) and Ron Johnson (R-WI) withdrew their amendment to reduce the Federal Medical Assistance Percentage (FMAP) for expansion enrollees beginning in 2030, after it became clear there was insufficient support.

The final bill includes Medicaid work requirements, caps on state-directed payments, limits on provider taxes, and makes several technical revisions to reduce the impact on safety-net providers. Additionally, the legislation creates a $50 billion Rural Health Transformation Fund and provides funding for the Centers for Medicare and Medicaid Services (CMS) to implement the fund. It also includes a long-sought-after provision to expand and clarify the exclusion for orphan drugs under the Drug Price Negotiation Program. These changes followed months of negotiations, continued engagement from stakeholders and procedural limits imposed by the reconciliation process. While the bill represents a major shift in federal spending policy, it avoids some of the more far-reaching structural changes that were initially under consideration.

Although included in the House version, notably absent from the final reconciliation bill were provisions to modernize and ensure pharmacy benefit manager (PBM) accountability, as well as prevent the use of spread pricing in Medicaid. The bill also omitted a policy to prohibit federal Medicaid and CHIP funding for gender transition procedures for minors or adults, as well as a delay to Medicaid Disproportionate Share Hospital (DSH) reductions. With many of the dropped policies remaining a priority for members of Congress, there could be a push to address them through a separate legislative package or regulatory approach in the coming months.

Please find here a section-by-section summary of the final reconciliation bill’s key health care provisions.

THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING HEALTH CARE PROVISIONS in the reconciliation Bill. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.