Budget Reconciliation Bill Passes with Steep Medicaid Cuts, Orphan Drug Exemption from Medicare Negotiation

Congress passed H.R. 1 with the Vice President providing the tie-breaking vote in the Senate to pass the bill 51-50, the House passing the bill on July 3, and the President signing the bill into law on July 4.

Budget Reconciliation Passes – Medicaid Cuts Advance

Congress has officially achieved its goal of passing H.R. 1 by July 4. Alongside our partners at the Modern Medicaid Alliance (MMA), GLI had urged Congress to protect Medicaid. Democrats and 3 Republicans (Senators Tillis, Collins, and Paul) opposed the Senate bill, citing the cuts to Medicaid as the reason for their vote. For more information, click here for MMA’s letter and find a detailed analysis from Thorn Run Partners here.

GLI is primarily concerned about the impact on reducing enrollment in Medicaid, eliminating optional benefits, and increasing utilization management for prescription drugs due to reduced funding to states, as well as Exchange plans created by the Affordable Care Act. About 1.4 million of the 11.8 million projected to lose coverage are people without “satisfactory immigration status,” according to the Congressional Budget Office (CBO). More information can be found here.

• Home and community-based services: Beginning July 1, 2028, states may request a new, separate HCBS waiver to cover those who do not meet the currently required institutional “level of care” determination. 
• Community engagement requirements (known as “work requirements”): Beginning December 31, 2026, individuals would have to demonstrate compliance with community engagement activities as a condition of receiving Medicaid coverage, meaning in a month the individual: (1) works at least 80 hours; (2) completes at least 80 hours of community service; (3) participates in a work program for at least 80 hours; (4) is enrolled in an educational program for at least 40 hours; engages in any combination of these activities for at least 80 hours; or (5) has a monthly income that is not less than $580 (the applicable minimum wage requirement multiplied by 80 hours). A State may only impose community engagement requirements on certain individuals between the ages of 19 and 64, and the final bill excluded certain caregivers. According to the Kaiser Family Foundation, of non-disabled adults under 65 who rely on Medicaid, 92% are either working, caring for a family member, managing an illness or disability, or attending school. Nearly half of Medicaid beneficiaries who are employed work for small companies and are not eligible for employer-sponsored health insurance at their job, leaving Medicaid as one of their only coverage options. 
• Cost-sharing requirements: The final bill requires Medicaid expansion enrollees to be subject to cost sharing, with certain limits for primary care and mental health.
• Limits Use of Provider Taxes: Limits or ends the use of provider taxes by states that are used to increase amounts subject to a federal match.
• End Increased FMAP for New Expansion States: The enhanced federal match (adding 5%) for states providing Medicaid to the expansion population, enacted March 2021 in response to the COVID-19 epidemic, will end. 
• Payment Limit for Certain State-Directed Payments: State-directed payments to providers in states expanding Medicaid cannot exceed 100% of Medicare rates and other changes.
• Undocumented immigrants: The bill would reduce federal Medicaid funding for states that provide coverage to undocumented immigrants, as well as impose certain penalties. 
• Provisions to reduce fraud, verify enrollment: Provisions to reduce fraud and ensure proper enrollment are anticipated to create burdensome administrative requirements that make it difficult for eligible beneficiaries to achieve enrollment or increase state administrative costs, thereby forcing states to reduce benefits or slow down or deny enrollment to otherwise eligible beneficiaries. For example, the bill requires all 50 states and the District of Columbia to take steps to prevent individuals from being simultaneously enrolled in Medicaid and CHIP programs across multiple States and to redetermine eligibility every 6 months (instead of 12 months).

GLI supports provisions to address physician Medicare payments and to exclude orphan drugs (those treating rare diseases) from the Medicare Drug Negotiation Program, as was originally intended by Congress. We worked closely with legislative offices, the Save Rare Taskforce, and so many other advocates to educate and advocate on the critical nature of this provision, while ensuring it remained within the bill and top of mind for Congress. It is a priority for GLI to promote innovation for patients with rare diseases, many of which have no cure. 

While this achievement offers some hope, GLI remains concerned and attentive to the bill’s full effect on patients, particularly the impact on those in rural communities and hospitals. GLI will work collaboratively with our partners to protect patients with liver disease and liver cancer as states work with fewer dollars to provide care.

GLI Works With Congress to Protect and Advance Veterans’ Health

As part of GLI’s Beyond the Biopsy initiative, GLI and its partners sent a letter to the VA. GLI and AASLD also sent a follow-up letter to the VA calling for coverage consistent with clinical guidelines. Most recently, GLI sent letters to commercial payers whose policies restricted access to care based on flawed criteria, including Select Health of Utah, BCBS of Mississippi, Elevance Health (Anthem/CarelonRx), and Excellus BCBS. 

We continue to encourage signatures here on a petition to all payers calling for coverage without biopsy for steatotic liver disease (SLD). GLI also urges advocates to contact their legislators to request the VA take steps to increase efforts to screen, diagnose, and treat veterans with MASH/NASH using non-invasive diagnostics and FDA-approved treatments, similar to Tricare, the Department of Defense’s (DoD) health program for active duty military members, their families, and retirees, and provide a briefing to the Committee on these efforts.

GLI Encourages Improved Patient Participation in Medicare Drug Price Negotiation Process to Protect Access

GLI staff and advocates participated in the most recent round of public engagement opportunities with CMS as part of the Initial Price Applicability Year (IPAY) 2026 round of Medicare Drug Price Negotiations as established by the Inflation Reduction Act. Advocates shared personal and community experiences with selected drugs to underscore the importance of access to personalized treatment that works for each patient. Following these events, GLI sent a letter to CMS encouraging this prioritization of patient input and requesting (1) improved processes for participation and (2) clarity on the impact of patient testimonies on final Maximum Fair Price (MFP) calculations. Read the letter here. GLI will continue to monitor the impacts of these negotiations to ensure that liver patients retain access to life-changing, life-saving treatments.

Budget Cuts to Health Programs Moving Through Appropriations Process

The White House released its preliminary fiscal year (FY) 2026 budget request, which outlined deep cuts to health and other non-defense discretionary programs, as well as disclosed more information about the reorganization of the Department of Health and Human Services (HHS). The request proposes to cut HHS by 26.2% to $93.8 billion from FY 2025 levels, to cut $18 billion for research at NIH, to cut $77 million from CDC as part of a consolidation of infectious disease funding including hepatitis C, and to “reform NIH and focus NIH research activities in line with the President’s commitment to MAHA, including consolidating multiple overlapping ill-focused programs into five new focus areas with associated spending reforms.” It specifically mentions a new National Institute on Body Systems Research, which the recently leaked FY 2026 passback budget (not the formally submitted budget) clarified to combine the National Institute of Diabetes and Digestive and Kidney Diseases, the National Heart, Lung, and Blood Institute, and the National Institute of Arthritis and Musculoskeletal and Skin Diseases, and a National Institute on Behavioral Health, which will combine the National Institute on Alcohol Abuse and Alcoholism, the National Institute on Drug Abuse and the National Institute of Mental Health. It did not provide details on funding levels for these new institutes or the existing institutes and centers that will be retained. View additional details from AASLD here. 

The House of Representatives and the Senate have not yet finalized their appropriations bills, and the House has scheduled a hearing on July 21, 2025, on its upcoming Labor/HHS appropriations bill. The Senate has not yet scheduled a hearing. In the process, GLI will fight for liver disease programs to remain intact and fully funded.

Senators Cassidy and Van Hollen Introduce the Cure Hepatitis C Act
GLI proudly supports legislation (S. 1941) introduced by Senators Bill Cassidy (R-LA) and Chris Van Hollen (D-MD) aiming to implement a nationwide elimination program for the hepatitis C virus (HCV) in the United States. The bipartisan bill prioritizes patient health and safety, advances a national plan to eliminate hepatitis C, and seizes an opportunity to end a global health crisis through screening, diagnosis, and treatment. Since curative treatments became available over a decade ago, GLI has advocated for a national strategy to eliminate this now-treatable infectious disease. We look forward to working closely with Congress and the current administration to get it over the finish line. 

GLI’s statement can be found here. View AASLD’s action alert to help gather additional Senate co-sponsors.

The House and Senate Reintroduce TROA

GLI applauds the reintroduction of the bipartisan Treat and Reduce Obesity Act (S.1973/H.R.4231), most recently reintroduced in the House with 12 original sponsors (15 total) on the heels of Senate reintroduction by Senators Bill Cassidy (R-LA) and Ben Ray Luján (D-NM). Within both the political and scientific realms, there is growing recognition of obesity as a chronic disease and the need to address and treat obesity like any other chronic disease. A robust body of research demonstrates the connection between obesity and serious liver diseases, such as metabolic dysfunction-associated steatohepatitis (MASH), formerly known as nonalcoholic steatohepatitis (NASH), making access to treatment a top priority for GLI and patients.

This bipartisan legislation would expand coverage of new health care specialists and chronic weight management medications for Medicare recipients. It will also work to mitigate the obesity epidemic by providing regular screenings.

GLI’s most recent statement can be found here.

Additional Bills GLI is Engaged With

GLI is closely monitoring the reintroduction of legislation that helps patients access and afford the health care they need. We will continue to update this list. A few bills reintroduced so far include:

• Medicare Multi-Cancer Early Detection and Screening Act (H.R.842/S.339) 
• Allows Medicare to cover simple blood tests to screen patients for cancer, leading to early diagnosis and treatment.
• HELP Copays Act (S.864)
• Requires health care insurers and pharmacy benefit managers (PBMs) to count payments they receive on a patient’s behalf, including payments from nonprofit organizations or drug manufacturers, toward the patient’s annual deductibles and out-of-pocket limit.
• Seniors’ Access to Critical Medications Act (H.R.2484)
• Allows Medicare patients to receive essential medications by mail or have caregivers and family members pick them up on their behalf. Reported favorably out of committee on April 29 in the House Energy and Commerce Committee.
• Pharmacy Benefit Manager (PBM) Transparency Act (S.526)
• Bans deceptive and unfair pricing schemes, prohibits arbitrary clawbacks of payments made to pharmacies, and requires PBMs to report to the FTC on how much money they make through spread pricing and pharmacy fees.
• Charlotte Woodward Organ Transplant Discrimination Prevention Act (H.R.1520/S. 1782)
• Passed the House. Take action to support Senate passage here!
• Living Donor Protection Act (S.1552)
• Ensures living donors do not face discrimination from insurance companies, codifies Department of Labor (DOL) guidance that covers living donors under the Family Medical Leave Act (FMLA) in the private and civil service, removes barriers to organ donation, etc.
• Accelerating Kids’ Access to Care (S. 742,/H.R. 1509)
• Improves children’s access to needed out-of-state health care by streamlining the Medicaid provider screening and enrollment process.

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