How H.R. 1 Will Affect Family Medicine

Transcript

David Tully: H.R. 1 is now law, and it will affect family, physicians and their communities in numerous ways. In this episode, you'll hear a breakdown of this legislation and its impact from several members of the Academy's government relations team. Welcome to Fighting for Family Medicine. I'm David Tully, vice president of government relations and a member of the AFP's Advocacy team.

The Trump administration's signature legislation, H.R. 1, is now law, and it will affect family physicians and their communities in a number of ways. We're devoting this episode of the podcast to a conversation among some of the AAFP's advocacy team covering the law's impacts, where the Academy succeeded in limiting some of its original provisions, and what happens next.

We'll also talk about how you can get involved in our ongoing work to backstop potential harms to family medicine practices and patients, starting with the August congressional recess.

Team introductions

Before we get to our questions, I'd like to introduce several members of the team to today's podcast. Natalie Williams is the Academy's senior manager of legislative affairs.

Megan Mortimer is a manager for legislative affairs. Anna Waldman is an associate for legislative affairs, and Rebecca King is our senior strategist for state affairs and member advocacy. Ladies, welcome to the podcast. It's good to have you here.

Medicaid barriers in H.R. 1

So, Natalie, let's talk first about Medicaid. The Academy, along with numerous other health care stakeholders, objected to the legislation's work reporting requirements and similar changes. Can you outline for listeners what barriers made it into the finished law?

Natalie Williams: Yeah, I think the biggest barrier that gained a lot of public coverage and attention is the work reporting requirements that were implemented as part of H.R. 1.

So in short, individuals between the ages of 19 and 64 who are enrolled in Medicaid via Medicaid expansion, so only in expansion states, they'll have to document that they are working, attending school, volunteering or other defined forms of community engagement for at least 80 hours a month in order to be eligible for Medicaid.

The law stipulates that all of the expansion states will have to implement these work reporting requirements by 2027. However, states do have the option to implement work reporting requirements sooner if they so choose.

The law does explicitly include several populations that are exempt from the work reporting requirements. These include caregivers of children and of family members, parents of children under the age of 14, individuals with a substance use disorder who are in active treatment, and some other populations. However, the legislation is not clear or detailed on how qualifying for an exemption will look or what form of documentation will be required. So that's something we'll be following closely over the next couple of years.

Importantly, one other provision related to the work recording requirements that did make it in the final law is a provision that effectively locks out individuals who were disenrolled or deemed ineligible from Medicaid expansion coverage for receiving subsidized ACA coverage. So it's sort of a double whammy. If these individuals who are unable to comply with, or for whatever reason don't meet the documentation requirements for work reporting, they also will not be able to receive the subsidized marketplace coverage.

We at the Academy have long opposed Medicaid work reporting requirements. They have a proven history, and evidence has shown in the states where this has been tried previously, that they really just serve to limit patient access to care while increasing administrative complexity, both on physicians and health care clinicians and on patients. In addition to increasing overall costs, both to the health care system and to patients.

Outside of the work reporting requirements, H.R. 1 includes a handful of other barriers. There is an increase in how often states will have to conduct eligibility redeterminations for Medicaid expansion adults, so they will have to redetermine eligibility for these individuals at least every six months.

Again, this is one provision where states have the option to do eligibility checks more often, but at least every six months. Additionally, the law limits retroactive coverage. So now individuals who are enrolled via Medicaid expansion pathways can only receive retroactive Medicaid coverage for one month prior to their application and enrollment.And then for individuals who are enrolled via traditional Medicaid pathways, they can only receive retroactive coverage for two months prior to their enrollment and application.

DT: Great. Really appreciate that overview. You mentioned expansion groups, and I wonder if you can talk a little bit about how different states, depending on how they handle Medicaid, expansion in the Affordable Care Act, will be affected in different ways.

NW: Definitely. So as I just mentioned, the work reporting requirements are specific to states that have implemented Medicaid expansion. That's definitely one of the biggest distinctions. However, there are a handful of other provisions that have nuance depending on whether a state is an expansion state or not.

So state-directed payments, which are ways that states are able via Medicaid to ensure that certain services or certain providers, like hospitals or nursing homes are being paid at a certain rate in order to ensure financial solvency and stability. For a lot of these facilities or provider types, state-directed payments will be limited to not being greater than the Medicare payment rate, 100% of the Medicare payment rate for expansion states, which effectively means that states cannot pay or require payments to be more than the Medicare amount in expansion states for certain services. And then non-expansion states have a slightly higher threshold for their state directed payment limit, which is 110% of Medicare payment rates.

Provider taxes

Additionally, folks may have heard a lot about provider taxes and maybe, like me, learned what a provider tax was and had a lot of education over the last many months. Similar but distinct from state directed payments, provider taxes are one of the ways that states make up their portion of their Medicaid dollars and they implement these assessments on a whole category of providers.

Again, be it hospitals, physician services are one of the potential categories that these taxes can be levied on, and then they're reinvested back into that category of providers in order to ensure that states can make up their share of Medicaid dollars. So provider taxes are currently allowed to be charged up to 6% across states, and states have the option to implement provider taxes on whatever category of eligible providers they choose.

Now, the bill prohibits any new provider taxes across states from being implemented upon enactment of the law, and then additionally, beginning in 2027 but ending in 2032, there will be a gradual phase-down for expansion states of their provider taxes if they are higher than 3.5%. So it effectively is setting a new threshold at 3.5% for provider taxes, which in short means that states will have to identify other ways that they can make up this projected budget shortfall in ways that they can pay for their portion of state dollars, in addition to lowering the amount of federal dollars that they're able to receive. Because states obviously get a match for every state dollar that they put toward their share of Medicaid.

Medicaid wins in H.R. 1

DT: Yeah. So before we move off Medicaid, you talked a lot about a lot of the challenge points in H.R. 1 with respect to Medicaid. Are there any wins worth highlighting in the Medicaid part of the bill? I know the bill started out one way. It went to the Senate, then it came back. Can you take a moment to talk about maybe some of the wins that came out of this for us?

NW: Yeah. One clear win that the Academy was pleased did not make it in the final version was a long discussed restriction on the use of Medicaid funds being able to be used to pay for gender affirming care services. Initially, the house version of the bill included a restriction on use of these funds, specifically for services provided to youth. Eventually, that was expanded actually to include all individuals. However, that provision did not make it into the final version. So there is no restriction beyond current law on the use of Medicaid funds being able to be used for gender affirming care services outside of Medicaid in the coverage space.

There is one additional win that I want to highlight, and that is expansion of funds in health savings accounts being able to be used for direct primary care (DPC) arrangements. This is a provision that the Academy has long championed. I know many of our members have turned to DPC models over the last many years and have found a lot of satisfaction as physicians, and also their patients have reported a lot of satisfaction, avoiding getting really wonky into tax code. A simple version of what the existing problem was is how the IRS defined DPC arrangements being a form of health insurance instead of medical care. So this provision effectively strikes that interpretation and clarifies that DPC is not a form of health insurance, and therefore individuals who are enrolled in plans that have an HSA will now be able to use those funds to pay for direct primary care.

DT: One of the few wins that we're proud that was included. Really appreciate that perspective, Natalie. Anna, welcome to the podcast. You are our nutrition expert on the team.

So there were a couple of different nutrition pieces in H.R. 1, including some new barriers around the Supplemental Nutrition Assistance Program, which we also call SNAP. Can you talk a little bit about what some of these changes mean for our members?

Anna Waldman: Yeah, definitely. So, the Supplemental Nutrition Assistance Program, which is commonly known as SNAP, provides low income families with food assistance, about $6 per person per day. And historically, these benefits have been paid for entirely by the federal government. H.R. 1 prevents reevaluation of the current benefits beyond inflation, which would keep those benefits from being updated based on future changes to nutritional guidelines. It also implements state federal cost sharing specifically for states with payment error rates over 6%, which applies to about 47 states, and that would go into effect in a few years for most of those states, being delayed a little bit for states that have error rates that are a lot higher.

What is so important for family physicians to be aware of, and the reason why I want to talk a little bit about this, is because as new dietary guidelines come out, your patients' SNAP benefits won't be increasing to keep up with that. And so you'll have to counsel them using what their benefits currently are. Most importantly, the changes will make it harder for families to follow the new recommended dietary guidelines, and it will make it harder really for them to afford food because their benefits won't increase beyond inflation, unfortunately.

Public Service Loan Forgiveness win

DT: Really appreciate that perspective. Turning to Megan, who's our workforce expert on the team, I want to touch on one of the wins that we can trace back largely to a lot of the work that our members did while they were here in D.C. in June, as part of the Family Medicine Advocacy Summit. We had more than 300 members that were on Capitol Hill. I think it was more than 250 meetings. And it has to do with the Public Service Loan Forgiveness program. So I wonder if you could first start with the PSLF and the win that came out of the bill for us, as well as maybe highlighting some of the other student loan provisions that were contained within H.R. 1 and what that means for our members.

Megan Mortimer: Of course. It's almost like we planned to have FMAS right at this time, right? So that we could advocate for the things that we really needed and wanted to be included, and then also advocate for things to be stripped out. And one of the things that we really focused on at FMAS was having our members go up to the Hill and talk about the importance of the Public Service Loan Forgiveness program.

And the reason why is because, in one of the final versions of the bill, the one that was initially put forward by the house, that bill would've disallowed residents from taking advantage of PSLF. As you know, it's a 10-year commitment on time payments, and not being able to utilize PSLF while you're in your residency programs erases three years off of that 10-year commitment, and therefore makes it less desirable and in the long term and makes school and, you know, your medical residency program even more expensive and prohibited.

So given the fact that our 300 members stomped to the Hill with a lot of other stakeholders that were also interested in this, that was stripped out and it was not included in the final. So residents, as of now, will still be able to take advantage of the Public Service Loan Forgiveness program.

So that's a great example of how FMAS can really move the needle. Now we will continue to have to advocate for PSLF, given the fact that it could rear its ugly head again, but for now, that's protected. We're also, as you know, Dave, paying a lot of attention to the regulatory side of things when it comes to PSLF.

So, the fight's never over for us, but again, that 300 en masse to the Hill was really helpful in making sure that was stripped out, and it was very concerning because even Natalie had gone to some leadership meetings and there were people that weren't even aware that the PSLF provision was in the bill.

It also goes to show you that basic education to members on the Hill is also incredibly important about what they have in their own bill that they're voting on. However, although we were successful in that, there were a number of other provisions that we continue to be concerned with for our members when it comes to student loans.

Other student loan concerns in H.R. 1

One is the cap that was in the bill on federal student loans. It used to be that you could use Grad Plus loans up to whatever your need is for paying tuition and potential other expenses. Now you will be capped at $200,000. That is over the course of your lifetime as a resident, and as we all know, medical school costs far more than that.

So there are a lot of concerns that individuals, especially from lower- and middle-income families and backgrounds, are going to have to access private loans in order to cover the cost of medical school. With no protections in place, we are concerned about predatory lending. We're concerned about very high interest rates, and all of those things are something that we're gonna need to be keeping a very close eye on for our members as this implementation of these student loan caps come into play July 1, 2026.

They also dissolved a couple of the loan repayment plans. So I know a lot of our members had signed up for the safe plan that was created under the Biden administration, or IBR, which is an income-based repayment plan. Those have been collapsed into different payment plans, and we're going to have to pay attention to how they implement those changes to make sure that it's not even more negatively affecting our residents and our new physicians as they're navigating their student loan debt.

And then one thing that we were also incredibly annoyed with, if you will, was that in the original House version, there had been a version of the Resident Education Deferred Interest Act, which I know a lot of our members who have been to FMAS before are familiar with, which would've allowed, at least for three to four years, you to be able to defer interest on your federal loans while you're in your residency programs. However, that was also taken out of the final version.

So again, PSLF, what a great one. We continue to need to protect that program, but we will continue to fight and push back on the provisions that were included in there that will only further deter people from wanting to go to medical school, and especially for primary care, which as we know, is not as a lucrative, profitable specialty to go into.

So, we'll, we're gonna continue that fight, Dave.

Tax policy win

DT: Great. Before I shift it back over to Natalie to talk about Medicare, perhaps we could just take a few minutes, Megan, and talk about the big piece of the One Big Beautiful Bill, or H.R. 1, which was the tax policy stuff, and there was a lot of stuff in there that we were tracking.

There were some positives for independent practices. There was some expenses there. There's retention to pass through income deduction. I wonder if you could just break through that a little bit for our members and help them understand kind of what those issues were and how we were engaged in them.

MM: As you know, I love talking about taxes, so of course the whole intent of BBB was to just extend or make permanent a lot of the tax cuts that were included in the Tax Cuts and Jobs Act in 2017, which was in the first administration for Trump, one of his biggest legislative wins.

A couple of things in there are actually really beneficial to independent practices, and those of you that are in independent practices are looking to seek a partnership or open up your own independent practice. Know that a lot of small business tax provisions can be incredibly helpful in terms of not only maintaining your independent practice but also expanding.

So a few of the things that were left in that we do support and have supported historically is the 20% pass-through deduction, which allows those people who are in independent practice to deduct 20% of their pass through income, which can be an incredible boon and help things like pay administrative costs, pay any sort of overhead costs. It can be an incredibly nice infusion of cash. It also allows for a full expensing. So it allows you, if you wanna do improvements to your independent practice expansion, what have you, you will fully be able to deduct that as you have been since 2017.

We did also notice that they tried to slip in a little bit of a, a detriment to what a pass-through provision would be for independent practices in the house version. They were trying to disallow those in individual practices that take advantage of the pass-through deduction from being able to also take advantage of their state and local deduction that a lot of states put into place after the original 2017 TCJA lowered the deduction. We worked with a lot of other stakeholders that also, you know.

A lot of other small businesses that were really concerned about this, and because of those advocacy efforts that was stripped out, so you can still take advantage of your state and local income tax deduction as your state put forward to mitigate the lessening of it for TCJA. Also continue to take advantage of your pass-through deduction.

One thing I will note is that there is a reconciliation bill too coming out, and there is a lot of talk about expanding the pass-through deduction from 20% to 23% deduction, as was included in one of the versions of the bill. Does that cover the tax portion enough?

DT: I think it sure does. I think that that's a good unpacking of it, so we really appreciate it.

Medicare payment relief

Back to Natalie for a second. So, there were a lot of questions going into the debate on H.R. 1, whether or not a Medicare title would make it into the package. We started with a proposal on the house side that was very problematic across the house of medicine. It was removed, and then there was a Medicare title added back in right before it was sent to President Trump for a signature.

So I'm wondering if you could take a few moments to talk about the Medicare title and specifically what family physicians could expect in the way of physician payment relief going into the next year.

NW: Yeah, so I think, Dave, you mentioned the fact that there was a lot of back and forth and will they-won't they. I will avoid getting too wonky about what the originally proposed proposal was, but where we landed in the enacted version of H.R. 1 is a 2.5% increase across the board to physician payment for 2026. Unfortunately, it doesn't do anything to offset the 2.83% that I know all of those listing have lived with for the course of 2025.

That's not to say it's something that the Academy will not continue to push on because ensuring that we have a sustainable payment system that appropriately values and compensates family docs for the work that they do is top of mind and will always be top of mind for the Academy. But in the absence of additional action, we did at least get a 2.5% increase beginning on January 1.

For folks who are following along closely inside the Beltway, you may have seen the proposed Medicare physician fee schedule was released just about a week or so ago. Our regulatory team is diving into that, but top line: You are seeing that 2.5% increase as mandated by Congress reflected in the proposed rule.

So the split conversion factor that was originally enacted back in 2015 by MACRA is coming to fruition starting in 2026, and that's reflected in the proposed role. So for physicians who are enrolled in MIPS or are not participating in alternative APMs, they will see a proposed increase of 3.3% to Medicare payment starting next year.

And then for individuals who are enrolled in Advanced APMs, of which I know many members are, there's a proposed increase of 3.83% that I think is, on paper, really great. And of course, as I mentioned, we're continuing to dig more into those numbers and the role overall, but I do think it's important to keep putting the pressure on Congress because 2.5% of that 3.3% or 3.8%, we'll be expiring come 2027.

So we're already planning for 2026 to remind Congress that they need to take action on a longer-term meaningful comprehensive payment reform. It's at least a short-term win for now.

What to expect next from Congress: health extenders, ACA enhanced tax credits, telehealth flexibilities

DT: So, as we sit here today, the house has gone home a little bit earlier for August recess. Senate is going to be following them pretty soon, so they'll be home for the next five weeks or so talking with their constituents, engaging in interactions and meetings at home.

And they'll be back in September and the work will continue. And so, Natalie, I'll start with you first and then Megan ask you to chime in as well. Can you give a little flavor to our listeners about what members can expect when Congress comes back to Washington in September and how they will fill the balance of the calendar year?

NW: Yeah, happy to kick it off. So, upon returning in September, members are gonna be faced with something of their own doing, which is a near-term deadline. There are quite a few provisions, including overall government funding, that are set to expire on September 30, which is really putting pressure on folks to act quickly.

So in addition to the funding for programs that we deeply care about, there are also a few provisions known as health care extenders that generally tend to ride along with the appropriations bills that are also set to expire on September 30. Many of those are ones that we care very deeply about as the Academy because of the benefit and the value that they bring to family physicians and their patients.

I'll start with the telehealth flexibilities that have been in effect for over five years now. That is probably I don't think an exaggeration to say the most, the single most bipartisan issue in Congress at this moment, and has been for some time. So there is a strong appetite and desire across the political spectrum to get telehealth across the finish line longer term, the challenges, of course, as it is with many things paying for it. So we do expect that the existing telehealth flexibilities for Medicare and some others will be extended. It's just the million-dollar question of for how long.

In addition to telehealth, there is the Teaching Health Center Graduate Medical Education program, which, as many folks know, funds, primary care, family medicine, residencies, uh, health centers, and other outpatient community-based settings across the country.

That is set to expire on September 30 and will need reauthorized and funding reallocated for that. Similarly, the Community Health Center Fund is set to expire on September 30. Those often ride along together.

I know so many of our members are practicing in CHCs, FQHCs and RHCs all across the country. So their stability and insured funding is extremely important for us at the Academy as well. And then additionally, the National Health Service Corps, which I know many folks have utilized and provides scholarships and loan repayments to primary care physicians who serve and, and medically underserved and rural communities across the country: That too, I sound like a broken record, has a September 30 expiration.

So not a small bit of things that they need to get done before September 30, upon their return. We are closely watching and engaged with folks in those conversations about the importance of not just kicking the can down the road to the end of the year, like there will be a temptation to do, but to ensure that we are providing these programs as well as important federal agencies with the financial stability and peace of mind to know that they will still be funded three months from now that is necessary for their success.

I know that there are other things I've missed. I'm gonna kick it over to Megan to to cap us off.

MM: Yeah, and also on the THCGME funding, specifically because programs are cyclical, having this kind of, you know, just attach the short-term CR is actually kind of a cut, right?

It's not even just maintaining these programs, they're gonna have to start making some really tough decisions. So it's not only importance of making them permanent but also increasing the funding, because otherwise they will not be able to survive. Even beyond if they're able to even do a short-term CR till the end of the year.

So I just wanna throw that out there because I think it's important for people to understand that it's not just the flat funding that we are gonna have to fight for, but we're also gonna have to continue to fight for increased funding for all of those programs. But right now, our THCGME programs are the ones that are the most nervous.

The other really big elephant in the room for us is the expiration of the Affordable Care Act enhanced premium tax credits. As most of us know, the only way for a lot of families and individuals to afford ACA plans is these tax credits, and they expire at the end of the year. We work with a number of stakeholders right now and have been even during reconciliation, to really fight for an extension of these tax credits for as long as possible.

It is difficult just because there has historically been a dislike of the Affordable Care Act overall from a number of members of Congress, and the enhanced tax credits is just another example of one of the provisions that a lot of members of Congress do not like. However, there is also an understanding that, essentially, cutting this or eliminating this tax is going to mitigate any sort of tax benefits that someone may have received from BBB as an individual or a family. And those who didn't receive any sort of benefits from BBB are going to see, I mean, the average is around $2,000 at the very least.

And then for families much larger, which will essentially not allow them to be able to afford ACA plans, and then they will lose their coverage. And given the fact that we are going to see Medicaid cuts as well, the economy's incredibly concerned about accessing care for especially low- to middle-income families with these cuts to Medicaid.

And then with these potential elimination of the ACA tax credits. So we are fighting for that. We are doing it in a bipartisan manner. And we really hope to see an extension of those tax credits come to fruition along with the funding and authorization bills that Natalie has already discussed.

DT: Great. Really appreciate that overview, and I'm sure we'll probably follow up on later podcasts about all the legislative activities it unfolds through the balance of the year

Advocacy Ambassadors update

DT: As we wrap up our time today, you probably have heard me talk about this on several other episodes, but we rolled out a new Advocacy Ambassador program in 2025, and Rebecca King, who is a member of our team, who is leading this program is here with us today.

And since the beginning of this year, we now have more than 600 members enrolled in this program, which is truly remarkable for us. So, Rebecca, I wonder if you could talk a little bit about the work that our Ambassadors will be undertaking as Congress. As I mentioned earlier, goes home for the recess work period over the month of August.

Rebecca King: Yeah, of course. It's been super exciting to watch the Advocacy Ambassador program grow. It's wild that there are 600 members in just a couple of months. That kind of momentum speaks volumes about how just energized and engaged our members are when it comes to advocacy. Natalie and Megan have already done a great job outlining the key policy issues we're focused on, and now Ambassadors are taking that energy into the August recess in a really meaningful way.

So, we just held our Quarter 2 Advocacy Ambassadors meeting, and it was our biggest one yet, with almost 200 Ambassadors joining us. We used that time to walk through our August recess strategy. We talked to the policy landscape and equip members with tools and confidence that they need to engage with lawmakers back home.

One of the biggest resources we rolled out is our new Advocacy at Home Toolkit. It's designed to make advocacy approachable and actionable, so it includes best practices for setting up site visits, tips for meeting with lawmakers in district and also how to attend and speak at town halls. So whether those are in person or even over the phone, it's all about helping Ambassadors feel prepared to tell their stories and to make the case for family medicine.

We've also launched Speak Outs, which is our version of action alerts for each of our August recess priorities. So those are just really quick, impactful ways for members to email their legislators directly about the issues that matter most.

Those are making telehealth flexibilities permanent, so patients, especially in rural and underserved areas, don't lose access to care. They've come to rely on securing long-term funding for workforce programs like the Teaching Health Center GME program, the National Health Service Corps and the Community Health Center Fund, which are all set to expire this fall, and then opposing harmful budget cuts that would eliminate or weaken program supporting primary care training, behavioral health integration, and public health initiatives. So whether it's through a coordinated site, visiting a town hall, or just simply a quick email via a speak out, our Ambassadors are going to be showing up in force this August.

They're making sure lawmakers hear directly from the people who know firsthand what's at state for patients and communities. It's grassroots advocacy at the best, and it's making a real difference.

DT: Great. Really appreciate that overview, Rebecca.

Conclusion

DT: Natalie, Megan, Anna and Rebecca, I can't thank you all enough for your time and your leadership on all these issues and activities that we're undertaking, and look forward to having you all back on the podcast at some point in the future.

If you've enjoyed today's episode, let us know by dropping a line to aafpnews@aafp.org. Be sure to share the episode with your followers on social media and tag the AAFP. We will talk to you soon.