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American Focus > Blog > Health and Wellness > Senate passes Trump tax cut bill that slashes Medicaid spending
Health and Wellness

Senate passes Trump tax cut bill that slashes Medicaid spending

Last updated: July 1, 2025 11:55 am
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Senate passes Trump tax cut bill that slashes Medicaid spending
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The Senate has successfully passed a $4.5 trillion tax-cut bill with last-minute adjustments to its healthcare provisions, sparking a frenzy among Republicans to secure party unity. The bill, which was approved with a narrow 51-50 vote, faced opposition from all Democrats and Republican Senators Rand Paul, Susan Collins, and Thom Tillis. Vice President JD Vance ultimately broke the tie, securing the bill’s passage.

This legislative victory marks a significant achievement for President Trump and Senate Majority Leader John Thune, who championed the bill. Thune emphasized the bill’s role in fulfilling the mandate entrusted to them by the American people, setting the stage for a safer, stronger, and more prosperous country.

Senator Collins, while supportive of the tax reductions within the bill, expressed concerns over the detrimental impact of the healthcare cuts, particularly on Medicaid. The legislation includes substantial funding cuts to Medicaid, drawing criticism from hospitals, doctors, and advocates for low-income families and rural healthcare providers.

Moving forward, the House must now approve the Senate’s version of the bill or engage in potentially lengthy negotiations. Many House Republicans harbor reservations about the Senate bill, which features deeper healthcare cuts than the House’s initial version. President Trump has set a target to sign the bill into law by July 4th.

The bill’s healthcare spending reductions are estimated to total $1.1 trillion, primarily funded by cuts to Medicaid. The Congressional Budget Office predicts a $3.3 trillion increase in deficits over the next decade, with additional impacts on the national debt due to higher interest rates.

If enacted, this bill would represent the most substantial cuts to federal healthcare spending in history, ushering in the most significant changes to the industry since the passage of the Affordable Care Act in 2010. The Senate’s version is projected to result in 11.8 million people losing health insurance over the next decade, surpassing estimates for the House’s bill due to more aggressive Medicaid funding cuts.

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Despite strong opposition from healthcare providers, the bill’s provisions faced scrutiny from the Senate parliamentarian for potential violations of reconciliation rules. While some measures were salvaged, others were revised or dropped from the final text.

The House bill includes a ban on new state provider taxes, while the Senate bill further limits provider taxes and introduces work requirements to Medicaid enrollees. Alaska Senator Lisa Murkowski played a pivotal role in the bill’s passage, securing exemptions for noncontiguous states like Alaska from certain provisions.

The bill also includes a Medicare payment boost for physicians in 2026 but lacks inflation-adjustment provisions present in the House version. Notably, earlier provisions banning federal funding for gender-affirming care were removed from the final bill.

In the House, concerns persist regarding the Senate bill’s aggressive Medicaid cuts. Representative David Valadao and his colleagues have urged Senate Republicans to reconsider their stance, emphasizing the importance of healthcare stability and funding in their state.

As the bill progresses through the legislative process, further negotiations and revisions may be necessary to address the concerns raised by lawmakers and stakeholders.

TAGGED:BillcutMedicaidPassesSenateslashesspendingtaxTrump
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