Trump signs Medicaid-slashing budget into law

President Donald Trump took time out from the 4th July celebrations in the US to sign his One Big, Beautiful Bill Act (OBBBA) into law, shortly after it narrowly cleared a House of Representatives vote.

The bill – which introduces additional restrictions and requirements to qualify for Medicaid, the health insurance used by low-income families and the disabled – passed by 218 votes to 214 in the House, with all Democrats and two Republicans opposing it.

Other key parts of the legislation include tax reductions, big spending increases on defence and border security, and cuts to food assistance programmes and clean energy tax credits.

In a statement, the White House said the OBBBA will restore "fiscal sanity" by cutting $1.5 trillion in spending by the federal government, and will "strengthen […] Medicaid by eliminating waste, fraud, and abuse and blocking illegal immigrants from receiving Medicaid."

The claims follow a report by the non-partisan Congressional Budget Office (CBO) that has estimated enactment of the OBBBA could result in 11.8 million people losing coverage over the next 10 years, with cuts to funding also affecting hospitals in deprived and often rural areas that disproportionately rely on federal cash for their operations.

By some estimates, the changes could put hundreds of rural hospitals and nursing homes at risk of being shut down, while the costs of health insurance will rocket for people denied Medicaid and forced to seek coverage from other sources.

The American Hospital Association (AHA)'s president and chief executive, Rick Pollack, said passage of the act is "extremely disappointing and [a] very difficult day for healthcare in America."

"Despite months of clearly demonstrating the implications that these Medicaid proposals will have on the patients and communities we serve, especially the most vulnerable populations, Congress has enacted cuts of nearly a trillion dollars to the Medicaid programme," he added.

"No matter how often repeated, the magnitude of these reductions - and the number of individuals who will lose health coverage - cannot be simply dismissed as waste, fraud, and abuse."

The Center for American Progress (CAP) think tank also argued that the OBBBA will also cut benefits through Medicare – a federal health insurance programme for people age 65 or older and younger people with disabilities - by blocking already finalised rules that would have made it easier for very low-income Medicare enrolees to access Medicare Savings Programs (MSPs), which help cover premiums and cost-sharing for their Medicare benefits.

That will disproportionately affect people with disabilities, as they are more likely to have lower incomes, according to CAP. Meanwhile, the legislation also eliminates Medicare eligibility for people with lawful immigration status, even if they have already paid into the programme.

The House vote followed a deadlock on the bill in the Senate, which was only unblocked after Vice President JD Vance cast a tie-breaking vote.

While the administration is claiming that tax breaks will benefit middle and working-class Americans the most, specifically workers and families making less than $50,000 per year, the Tax Policy Center maintains the BBB will "distribute most of those additional tax cuts to the highest-income households."