Five Fast Facts: Big Beautiful Bill Comes at a High Cost for Pennsylvanians’ Health Care and the Economy

July 01, 2025

The One Big Beautiful Bill Act (H.R. 1) delivers significant risks to Pennsylvania’s health care system—especially hospitals—and will hurt, not help, our economy.

Here are five fast facts on how the amended legislation passed by the Senate could destabilize hospitals and communities across the commonwealth.

1. Medicaid cuts leave hospitals footing the bill

When the federal government contributes less to Medicaid, hospitals are left to absorb the impacts of lower reimbursement rates and greater uncompensated care from patients left uninsured. This is especially true in Pennsylvania, with its more than 3 million people covered by Medicaid, and where hospitals will be forced to reckon with rising provider losses, reduced service capacity, and growing financial pressure on already fragile health systems. Legislation passed by the Senate includes deeper and more severe Medicaid cuts than the House-passed legislation and directly cuts payments hospitals depend on to keep serving their communities because Medicaid payments already fall short of the cost of providing care.

2. Rural economies could struggle with hospital service cuts and closures

Rural hospitals serve as both care hubs and economic lifelines. Slashing Medicaid support will push small-town hospitals—already operating on razor-thin margins and more heavily dependent on Medicaid reimbursement—over the edge. In many rural counties, hospitals are top employers. Their closure doesn’t just limit health access; it devastates local economies, eliminates jobs, and reduces property values. Economic growth can’t happen in communities that lose their only emergency department.

3. Uncompensated care will surge

The bill shifts federal responsibility onto state budgets, local governments, and health systems. As more Pennsylvanians lose Medicaid coverage, hospitals will absorb billions in unpaid bills on top of shouldering significant payment cuts. This increases costs for insured patients, employer health plans, and state taxpayers.

4. The bill’s economic impacts would hamper growth

Pennsylvania would lose hundreds of thousands of jobs and tens of billions in economic impact if Congress enacts sweeping cuts to Medicaid spending. With every $1 billion reduction in federal Medicaid funding to Pennsylvania over the next decade, the commonwealth would lose $1.8 billion in economic activity.

5. Economic harm to hospitals undermines Pennsylvania’s tax base

Hospitals are major economic engines in Pennsylvania—contributing nearly $190 billion in statewide activity and supporting 1 in 9 jobs. Cuts to Medicaid and the destabilization of hospital finances would undermine this vital tax base, reducing payroll taxes, employment, and local business activity tied to the health care sector. As hospitals shrink or close, the state loses more than just health care—it loses a pillar of its economy.

The bottom line: The “One Big Beautiful Bill” jeopardizes Pennsylvania’s economy by cutting Medicaid and placing hospitals under economic siege. Pennsylvania’s health care providers, rural economies, and working families will pay more money for this bill’s enactment.

Learn more on HAP’s Medicaid Advocacy Hub.