At a Glance: The Health Care Fallout from the Budget Reconciliation Bill

July 10, 2025

Hospitals in Pennsylvania and across the country are bracing for severe and devastating impact to access to care following the enactment of the federal budget reconciliation bill last week.

The sweeping reconciliation package includes over $1 trillion in cuts nationwide that will destabilize hospitals and communities that depend on them for care. The legislation includes significant reductions in Medicaid coverage and directly reduces state-directed payments to hospitals. Below is a compilation from state and national sources outlining of some of the impact:

• Economic impact:  In Pennsylvania, the bill’s provisions will result in more than 707,000 lost jobs and $95 billion in lost economic impact over the next decade, based on an American Hospital Association analysis.
• A decade of Medicaid cuts: Federal Medicaid cuts could range from between $40 billion and $66 billion in Pennsylvania, the Kaiser Family Foundation estimates.
• Cuts to coverage and care:  Manatt Health projects the bill will result in a 340,000 reduction in Pennsylvanians enrolled in Medicaid over 10 years and close to a $22.5 billion total funding cut to hospitals over the next decade.
• The bottom line:  Changes to state-directed payment provisions will translate into a $4.5 billion cut to Pennsylvania hospitals, putting access to care and hospital services at risk across the commonwealth.

“We cannot have healthy, vibrant communities in Pennsylvania without strong, financially stable hospitals,” HAP President and CEO Nicole Stallings said in a statement last week. “Hospitals will be forced to make federal difficult decisions in anticipation of this destabilizing cut and HAP calls on our leaders at both the and state levels to prioritize policies now that will help to keep hospitals and services open, protect Pennsylvanians’ access to care, and ensure our communities—and commonwealth—are economically competitive.”

HAP continues to highlight the devastating impact of the budget reconciliation bill while calling for additional resources and support for hospitals and patients across the commonwealth.