U.S. Senate-passed Budget Reconciliation Bill Will Destabilize Health Care, Communities

July 01, 2025

Harrisburg, PA (July 1, 2025)—HAP President and CEO Nicole Stallings released the following statement about the U.S. Senate’s passage of budget reconciliation legislation:

“As we have warned, Medicaid cuts included in the budget reconciliation bill passed by the U.S. Senate today will cause people to lose health care coverage and destabilize Pennsylvania hospitals and communities. This legislation puts health care access, jobs, and economic competitiveness in jeopardy, especially in our rural communities.

“More than half of the commonwealth’s acute care hospitals are operating in the red because payments already do not reflect the actual cost of providing care. They cannot absorb a cut of this magnitude, and some will have no choice but to reduce services or close.

“The House previously recognized the need to preserve payment structures that hospitals depend on to continue serving their communities. We urge Pennsylvania’s delegation to protect our commonwealth’s health care, jobs, and economy by rejecting these harmful cuts.”

Background:  The Senate-passed budget reconciliation language includes deeper cuts to Medicaid than the bill passed by the House in May, including provisions reducing payments that stabilize hospitals, especially in rural communities. So-called state-directed payments are necessary to bring average Medicaid reimbursement for Pennsylvania hospitals to 82 cents on dollar. Without them, that average drops to 53 cents on the dollar.

Statewide, the Senate’s state-directed payment provisions alone translate to a roughly $4.5 billion cut to Pennsylvania hospital payments over the next decade. A breakdown of estimated cuts by Pennsylvania congressional district is available online.

In addition to losses of health care access and coverage, the legislation would cost Pennsylvania an estimated 526,000 jobs and $71 billion in lost economic impact over the next decade. That’s based on American Hospital Association’s analysis of state-by-state economic impacts using KFF’s estimates of state allocation of cuts in the House-passed bill and HAP’s estimates of additional losses from the Senate provisions.