Federal Advocacy

Senate budget-reconciliation bill risks worsening access to care

Bill would make it harder for patients to get and stay covered, fails to address Medicare pay, and eliminates loan options vital to medical students.

By
Kevin B. O'Reilly , Senior News Editor
| 8 Min Read

AMA News Wire

Senate budget-reconciliation bill risks worsening access to care

Jun 25, 2025

The AMA is expressing concerns about the Senate budget-reconciliation bill, citing cuts to Medicaid and Children’s Health Insurance Program (CHIP) funding and changes in eligibility criteria that will reduce patients’ access to care and affect physician practices’ viability, particularly in rural and underserved areas. 

Additionally, the AMA pointed to the exclusion of the House-passed effort to connect Medicare physician payment to the cost of running a practice. 

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“Patients across the country are already struggling to access care,” AMA President Bobby Mukkamala, MD, said in a statement. “Physician burnout, early retirements and—with the cost of running a practice constantly rising—the challenge of keeping a practice financially afloat are contributing to a physician shortage expected to reach 86,000 by 2036. 

“Limiting access to a physician does not make patients healthier,” added Dr. Mukkamala, a Flint, Michigan, otolaryngologist. “In fact, it increases the risk of turning acute, treatable issues into costly chronic conditions. As work continues on this bill, we urge senators to listen to patients and physicians before making changes that reduce access to care.” 

In a lengthy letter to Senate leaders (PDF), AMA Executive Vice President and CEO James L. Madara, MD, spelled out in greater detail physicians’ concerns with H.R. 1, the measure officially called the One Big Beautiful Bill Act. 

Specifically, the AMA is noting its concerns with the bill’s impact on:

  • Medicaid and CHIP.
  • Access to health insurance coverage through the Affordable Care Act (ACA) marketplaces.
  • Federal support of medical student loans.
  • Augmented intelligence (AI)—often called artificial intelligence.
  • Medicare physician payment reform.

As detailed in the AMA’s letter to House leadership (PDF) last month, physicians “know that Medicaid is a vital component of America’s health care infrastructure.” Among other things, the federal-state health care program: 

  • Covers millions of patients.
  • Serves as a critical safety net for children, pregnant and postpartum women, seniors and
  • people with disabilities and serious health conditions.
  • Is linked to improved long-term health, lower rates of mortality, better health outcomes, fewer hospitalizations, better educational outcomes and greater financial security.
  • Covers more than 40% of all U.S. births, including almost 50% of births in rural areas.

“In many communities, Medicaid is a major source of health insurance coverage or, in some cases, the primary payer,” says the AMA’s letter. “For the physician practices and other health care providers who serve these communities, Medicaid payments are a crucial source of funding without which they might be unable to continue to operate, jeopardizing access to care in those communities and in rural areas in particular.”

While the AMA supports efforts to address waste, fraud and abuse in health care, the budget-reconciliation package could make it harder for patients to access the care they need.

“After reviewing the changes to the Medicaid and CHIP programs proposed by both the House of Representatives and the Senate, we note that they would create new administrative requirements for patients to enroll in—and maintain coverage under—these programs, and would shift billions of dollars in program costs to the states,” wrote Dr. Madara. “We fear these changes would lead to unintended consequences that could affect patients who are eligible for Medicaid and CHIP benefits, rural and underserved communities,” as well as the physicians and health care organizations who care for them.

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Making patients jump through hoops to qualify for coverage is already making the uninsured problem worse. “Of the estimated 25.3 million uninsured Americans in 2023, 6.3 million were eligible for Medicaid or CHIP but not enrolled, often due to administrative barriers,” says the AMA’s letter, which includes dozens of citations to well-established research.

The new administrative requirements of particular concern to the AMA are those that would:

  • Impose work requirements as a condition of coverage.
  • Terminate regulations that are intended to streamline eligibility determinations for Medicaid, CHIP and the Medicare Savings Program (which is administered by state Medicaid programs).
  • Increase the frequency of eligibility redeterminations for Medicaid expansion enrollees.
  • Shorten retroactive coverage periods.

In addition, Dr. Madara’s letter raises concern about the House bill’s proposal to freeze “provider tax” arrangements that states have used to finance their Medicaid programs since the mid-1980s. Further changes in the Senate measure are expected to cut the federal share of Medicaid spending more than $100 billion, according to the Congressional Budget Office.

Meanwhile, ACA-marketplace provisions in both the House and Senate budget bills would “effectively reduce marketplace coverage for middle and low-income Americans,” Dr. Madara noted. Moreover, neither budget measure addresses “the scheduled expiration of enhanced tax credits at the end of 2025, which would result in an additional $26.1 billion reduction in 2026 alone, and could lead to an additional 4.1 million uninsured people in 2034.”

The AMA also is raising concerns about how the Senate’s budget-reconciliation measure will affect the physician workforce.

On student loans, the AMA’s letter notes that section 81001 of the bill “would eliminate the ability for medical students to receive subsidized loans and Federal Direct Parent Loan for Undergraduate Students (PLUS) Loans, limit parents’ ability to borrow loans on behalf of their children, and cap the amount of Federal Direct Unsubsidized Stafford Loans that a student can borrow for professional school to $200,000, including any amount borrowed for graduate school, but not including any amount borrowed to help fund an undergraduate degree.”

The problem is that 71% of medical students graduate with an average of more than $212,000 in educational debt. Medical students are heavy users of Federal Direct PLUS Loans because—as they now exist—they let students borrow up to whatever the medical school is charging to attend. They also have a fixed-interest rate for the life of the loan and feature benefits such as forbearance during residency training.

The changes will “severely limit the number of individuals that can afford a medical degree and likely exacerbate the looming shortage of 86,000 physicians,” Dr. Madara wrote. According to research he cited, the cost of attending medical school is the No. 1 reason why qualified applicants don’t apply.

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Another area with potentially far-reaching impact for physicians present and future is that the Senate bill does not include Section 44304 in the House-passed bill. 

Upon passage of the House measure, the AMA said it strongly supported the $8.9 billion in pay updates included in section 44304 of the bill, which tie Medicare physician payment to 75% of the Medicare Economic Index (MEI) that tracks physician practice-cost inflation. The bill’s proposed update for 2026 would amount to a 2.25% boost in Medicare physician payment, which Dr. Madara noted is “significantly higher than any of the annual physician payment updates in MACRA.”

Under current law, Medicare physician pay is set to rise 0.25% in 2026 and top out with a 2.5% annual increase in 2035. If section 44304 were enacted, doctors would see their annual Medicare payment rise to 4.3% by 2035.

The decision to omit these Medicare pay reforms come as leading authorities on Medicare advise fundamental changes to ensure the long-term sustainability of the program that covers older-adult Americans. Since 2001, Medicare physician payment has fallen 33% after accounting for practice-cost inflation.

In its report to Congress earlier this month, the Medicare Payment Advisory Commission (MedPAC) called for a long-term, inflation-adjusted approach that better reflects the cost of providing care. 

MedPAC proposed replacing the current 0.25% and 0.75% updates with a permanent, inflation-based formula tied to the MEI, such as MEI minus one percentage point.

Meanwhile, Medicare’s trustees also warned this month that long-term access to care for seniors is threatened by Medicare’s failure to keep up with the cost of practicing medicine. “Absent a change in the delivery system or level of update by subsequent legislation, the trustees expect access to Medicare-participating physicians to become a significant issue in the long term,” their report says. 

“The Senate still has time to correct its course,” Dr. Madara wrote to the leaders of the upper chamber. “Reinstating section 44304 before the reconciliation bill advances would shore up practice sustainability, protect patient access and end the cycle of temporary fixes and payment cliffs. Physicians and their patients cannot afford yet another year of instability caused by the erosion in Medicare payments.”

On health AI, the AMA is voicing “serious concerns” about provisions that would ban state-level regulation of the promising technology “without additional federal action to create guardrails around the design, development and deployment of AI.

“This lack of clear and consistent legislative and regulatory requirements is especially notable as applied to health care AI, including any AI that may be used in federal programs and may impact patient data privacy and patient access to care,” Dr. Madara wrote.

He added that “use of unregulated AI by federal departments and agencies could ultimately result in inappropriate dissemination and use of protected personal health information and denials of critical health care by federal payers—issues we have already seen come to fruition that have caused real harm to real patients. Stakeholders across industry, physicians and patient organizations have consistently agreed that additional federal action to create clear and consistent guardrails that seek to ensure patient safety and data privacy are a critical need that remains unaddressed.”

Learn more about AMA policy, advocacy and resources on AI.

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