Trump’s Megabill Will Cut Health Spending. Here Are the Latest Changes in the Bill.

The Senate’s version of the spending bill has a long list of health-related items, including changes to Medicaid, Health Savings Accounts, and how immigrants qualify for healthcare. (Dreamstime)

Congress is on the brink of making big changes to the U.S. healthcare system, and the details are changing on the fly as lawmakers move to approve the law.

The spending bill Republicans pushed through the Senate on Tuesday is dense with provisions that would impact the tens of millions of people who rely on the Medicaid program for their insurance, and on the providers that treat Medicaid patients.

The Senate’s version of the bill has a long list of other health-related items, including changes to Health Savings Accounts and how immigrants qualify for healthcare.

Rather than being debated and negotiated separately, the healthcare items have been tossed into the tax and spending bill that deals with countless other government programs. For healthcare companies, the quick, substantial shifts make have complicated business. For investors, there’s a great deal of uncertainty.

President Donald Trump has said he hopes to sign the bill into law on July 4. The U.S. House will first need to pass the Senate’s modified version of the bill.

Healthcare stocks generally climbed Tuesday, with the S&P 500 Health Care sector index closing up 1.4%.

On Tuesday afternoon, hours after the Senate’s bill passage, Barron’s spoke with Chris Meekins, a healthcare policy analyst with Raymond James, to get a better understanding of the proposed legislation and its impact on the healthcare sector.

The conversation has been edited for length and clarity:

Barron’s: There are a ton of provisions related to healthcare in this bill. What are the most important?

Chris Meekins: People who are on Medicaid now will be required to work, or do community engagement, up to 80 hours a month if you’re an able-bodied adult. And, you will have to recertify that you are eligible for Medicaid through the redetermination process every six months, rather than every year, going forward. Those are two additional paperwork things that could be complicated for people who are able-bodied adults that are on Medicaid.

And for the industry, what’s the most important?

Meekins: For industry, they’re concerned about how many people may lose enrollment and become uninsured. The Congressional Budget Office estimates that at about 11 million by the end of the budget window. I think the number’s probably half.

But for industry, the big focus has been on these very technical, very niche, state-directed payment programs. Basically, those are a way for states to get additional money from taxes from providers in Medicaid. Because of the way the federal government matches state spending, providers are able to get back not only what they paid in taxes, but more.

In very broad strokes, the Senate version of the bill puts new caps on these state-directed payment programs. What does this mean for healthcare providers?

Meekins: What is assumed will happen is there will be pressure placed on hospitals, and they will have to find revenue elsewhere. At the end of the day, hospitals are going to get less money than they were anticipating under existing law.

Are there other healthcare language in the bill investors should be paying attention to?

Meekins: There’s a wide range of provisions: Language around Health Savings Accounts and expanding access to those, which is good for telehealth companies. There’s language around a rural hospital fund that is being established to help offset these other changes. And just a lot of moving pieces.

Is this going to pass the House?

Meekins: It’s a heavy lift, but what we’ve seen with this president is he’s willing to put pressure on members. And what it really boils down to is: Are they going to force it to go back to the Senate, or are they going to accept what the Senate has done here? They have to decide if they want to try to oppose the president. And to this point, we have not seen them be willing to do that at the end of the day.

Thanks, Chris.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com