President Donald Trump’s “One Big Beautiful” budget reconciliation bill would make some of the most sweeping changes in health policy in years, largely affecting Medicaid and Affordable Care Act plans — with reverberations felt throughout the health care system.
With only a few exceptions, the budget reconciliation process — which allows the political party in control to pass a bill with only 51 votes in the Senate, rather than the usual 60 — is how nearly every major piece of health legislation has passed Congress since the 1980s.
But using reconciliation to constrict rather than expand health coverage, as the GOP is attempting now? That is unusual.
One of the best-known programs born via reconciliation is the “COBRA” health insurance continuation, which allows people who leave jobs with employer-provided insurance to keep it for a time, as long as they pay the full premium.
That is one of dozens of health provisions tucked into COBRA, or the Consolidated Omnibus Budget Reconciliation Act of 1985. Also included was the Emergency Medical Treatment and Active Labor Act, which requires hospitals that take Medicare to treat or transfer patients with medical emergencies, regardless of their insurance status — a law that’s become a focus of abortion opponents as they seek to limit access to the procedure.
A key reason so much health policy has passed this way has to do with how Congress manages the federal budget. Federal government spending falls into two categories: mandatory, or spending required by existing law, and discretionary, which traditionally is allocated and renewed each year as part of the appropriations process.
Lawmakers use the reconciliation process to make changes to mandatory spending programs — Medicare and Medicaid are among the largest — as well as tax policy. (For complicated political reasons, reconciliation bills cannot touch Social Security, the last prong in the entitlement program trifecta.)
Reconciliation comes into play only if it is needed to reconcile taxes or mandatory spending to comply with the terms Congress sets for itself each year, through the annual budget resolution. This year the GOP’s focus is finding the cash to renew Trump’s expiring tax cuts, which largely benefit wealthier Americans, and boost military and border security spending.
In years when Congress orders a reconciliation bill, health policy almost always plays a major part. Usually, reconciliation instructions call for reductions in payments to health providers under Medicare — which costs the most of the federal health programs.
For much of the 1980s and 1990s, Democrats in Congress quietly used reconciliation to expand eligibility for the Medicaid program, often by cutting more than the budget called for from Medicare. For every $5 cut from Medicare, about $1 would be redirected to provide Medicaid to more low-income people.
But budget reconciliation has also become a convenient way to make policy changes to the nation’s major health programs, as it is usually considered a “must-pass” bill likely to be signed by the president and not subject to filibuster in the Senate.
As a result, all manner of now-familiar health programs were created by budget reconciliation bills, many of which provided health coverage to more Americans.
The 1989 reconciliation bill created a new system for paying doctors who treat Medicare patients, as well as a new federal agency to study the cost, quality, and effectiveness of health care, today known as the Agency for Healthcare Research and Quality.
Children’s health has been a popular add-on over the years, including the gradual expansion of Medicaid coverage to more children based on family income. The 1993 reconciliation bill created the Vaccines for Children program, which ensures the availability and affordability of vaccines nationwide for uninsured and underinsured kids. The 1997 reconciliation bill created the Children’s Health Insurance Program, which today provides insurance to more than 7 million children.
In fact, the list of major health bills of the past 50 years not passed using budget reconciliation is short. For instance, the 2003 Medicare Modernization Act, which added a prescription drug benefit to the program for the first time, attracted just enough bipartisan support to pass on its own.
The biggest health care law of recent decades — the Affordable Care Act — didn’t start out as a reconciliation bill, but it ended up using the process to clear its final hurdles.
After initial passage of the bill in December 2009, a special election cost Democrats their 60th seat in the Senate — and with it, the supermajority they needed to pass the bill without Republican votes. In the end, the two chambers used a separate reconciliation measure, the Health Care and Education Reconciliation Act of 2010, to negotiate a compromise that included the ACA.
HealthBent, a regular feature of KFF Health News, offers insight into and analysis of policies and politics from KFF Health News chief Washington correspondent Julie Rovner, who has covered health care for more than 30 years.
