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Volume 3, No. 89, July 10, 2025 |
President Signs H.R. 1 on Reconciliation
Thank you to everyone who took the time to respond to our Action Alerts to
both the U.S. House of Representatives and the U.S. Senate; your efforts did not
go unnoticed on Capitol Hill. While we were not able to forestall some problematic
provisions, your efforts assisted in mitigating even worse provisions, especially
in the federal student loan programs. |
Impact on Higher Education
Higher education federal student
loans and health care for low-income individuals carried the brunt of the programmatic
cuts to partially offset the tax provision in the
One Big Beautiful Bill Act, H.R. 1 (OBBB), accounting for $1.1 trillion in cuts over the next 10 years.
The ending of the Grad
PLUS and changes to the Parent PLUS loans and the loan caps for graduate
students remained in the bill that was signed into law, as was reported in last week’s
ADEA Advocate.
The endowment tax
adjustment included in the final version creates a sliding scale from 1.4% (the
current rate for all institutions) up to 8%, rather than the 21% that was contained
in the House version of the bill. This excise tax applies only to private institutions
with at least 500 students and endowments that amount to $500,000 per full-time
equivalent student. The following table displays the provisions:
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Medicaid Changes
The major changes were to the
Medicaid program.
The new law eliminates the temporary
incentive for states that newly adopt expansion (i.e., the 90% Federal Medical
Assistance Percentage (FMAP)), effective Jan. 1, 2026.
The law also does the following
(effective on Oct. 1, 2028):
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It requires states to impose cost
sharing of up to $35 per patient visit on expansion adults with incomes
100% to 138% above the federal poverty line (FPL).
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It explicitly exempts primary
care, mental health and substance use disorder services from cost sharing, maintains
existing exemptions of certain services from cost sharing and limits cost sharing
for prescription drugs to nominal amounts.
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The bill also exempts services
provided by federally qualified health centers, behavioral health clinics and
rural health clinics from cost sharing.
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It provides $15 million in implementation
funding for fiscal year (FY) 2026.
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It maintains the 5% of family
income cap on out-of-pocket costs.
Effective Oct. 1, 2026, the new
law limits federal matching payments for Emergency Medicaid for individuals who,
except for their immigration status, would otherwise be eligible
for expansion coverage to the state’s regular FMAP. The law provides $1 million
in implementation funding for FY 2026.
Additionally, the new law requires
Medicaid eligibility for individuals ages 19-64 who are applying for coverage
or currently enrolled through the Affordable Care Act (ACT) expansion group (or
a waiver) to work or participate in qualifying activities for
at least 80 hours per month. The law exempts certain adults, including parents
of dependent children 13 or under and those who are medically frail, from the requirements.
The law specifies that seasonal workers meet requirements if the average monthly income meets a specified standard.
The law goes into effect no later than Dec.
31, 2026, or earlier at state option
and allows the Secretary of the Department of Health and Human Services to delay
a state’s implementation to no later than Dec.
31, 2028, if the state is making
good faith efforts to comply.
ADEA will closely monitor the
implementation of all these provisions and report as needed.
We now turn our priority
attention to the Appropriations committees who are considering presidential requests
to eliminate Oral Health Training programs and consolidate the National Institute
for Dental and Craniofacial Research into a new institute, along with two other Institutes.
ADEA will again need your help.
The House Appropriations Committee has announced a schedule that has them marking
up the Labor-HHS Appropriations bill in the Subcommittee on Monday, July 21, and
at the full Committee on Thursday, July 24. Expect an Action Alert request soon. |
Appeals Court Rejects
Lawsuit Challenging State Department’s Social Media Vetting Policy for Visa Applicants
On June 27, a District of Columbia Appellate Court threw out a case
that challenged the State Department’s policy to vet social media accounts of
student and exchange visitor visa applicants. The plaintiffs in the case argued
that the policy violated their First Amendment rights by requiring them to make
their social media accounts public.
District of Columbia
Appellate Court Judge J. Michelle Childs ruled that the plaintiffs did not have standing.
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Judge Puts HHS Reorganization on Hold
On March 27, Robert F. Kennedy, Jr., Secretary of the Department of Health and
Human Services (HHS), announced the reorganization
of HHS. It included consolidating its 28 divisions into 15, reducing staffing from
82,000 to 62,000 and creating a new Administration for Healthy America (AHA).
Nineteen states and the District of Columbia, led by the State of New York, filed
suit in U.S. District Court for the District of Rhode Island on May 5, State of New York, et.al. v. Robert F. Kennedy, Jr., et.al.,
seeking to stop the Trump administration’s implementation of the reorganization.
On July 1, District Judge Melissa DuBose issued an order granting the states’
request for an injunction, enjoining HHS from taking any actions to implement
or enforce the planned reduction-in-force (RIF) — including additional RIFs
or placing additional staff on administrative leave—or subagency and program restructuring.
DuBose concluded that, “The Executive Branch does not have the authority to order,
organize, or implement wholesale changes to the structure and function of the agencies created by Congress.”
As this case continues, ADEA will keep you informed.
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New Health Subcommittee Chair on Key House Committee
U.S. Rep. Earl “Buddy” Carter (R-GA), a pharmacist, has stepped down as Chair
of the Health Subcommittee of the U.S. House of Representatives’ Committee on
Energy and Commerce. U.S. Rep. Brett Guthrie (R-KY), the Full Committee Chair,
announced that Carter will be replaced by U.S. Rep. Morgan Griffith (R-VA). Griffith
is an attorney from the Southwestern panhandle of Virginia. Carter will remain a member of the Subcommittee.
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