Priya Chidambaram

The 2025 reconciliation law could have major implications for nearly 15,000 federally certified nursing facilities and the more than 1.2 million people living in them. Nursing facilities provide medical and personal care services for older adults and people with disabilities. In 2023, Medicaid paid for 44% of long-term institutional care costs; 37% of long-term institutional care costs were paid for out-of-pocket; and the remaining 18% was covered by other public and private payers.

President Trump signed into law a budget reconciliation package that made major reductions in federal health care spending to offset part of the costs of extending expiring tax cuts. The Congressional Budget Office’s (CBO) latest cost estimate shows that the reconciliation package would reduce federal Medicaid spending over a decade by an estimated $911 billion and increase the number of uninsured people by 10 million, with three quarters of the change stemming from cuts to Medicaid.

The budget reconciliation bill (the “One Big Beautiful Bill”) being debated in Congress makes significant changes to the Medicaid program, including requiring states to impose cost sharing on certain adults enrolled through the ACA Medicaid expansion. This requirement marks a departure from current rules that permit, but do not require, states to impose cost sharing on certain populations within limits designed to protect Medicaid enrollees from high out-of-pocket costs.