Changes Under One Big Beautiful Bill Act May Not Be So Beautiful For Oncology
Published Date: October 6, 2025
Reforms to Medicaid, ACA Likely to Drastically Affect Underinsured Patients
Oncology will undergo some big changes under the One Big Beautiful Bill Act (OBBBA), though most won’t be very beautiful, according to a healthcare policy expert.
“OBBBA is a carefully crafted compromise to two primary things: first, to extend expiring tax cuts and produce more tax relief for the economy, and second, to at least partially pay for those tax cuts over the next 10 years,” Joel White, Head of Practice, Healthcare, for Monument Advocacy, a Washington, D.C.-based lobbying firm, told NCODA members during a July 28 webinar.
Signed into law on July 4, OBBBA is a sweeping budget reconciliation package affecting tax policy, Medicaid/Medicare, the Affordable Care Act (ACA) and numerous healthcare programs.
“If you think about the fiscal outlook, there is only a few big pots of money where Congress can draw from,” White said. “Minus Social Security, the big buckets are Medicare, Medicaid, the Affordable Care Act and other entitlement programs, so paying for the tax bill quickly became a conversation of what we were going to do in healthcare.”
In a nutshell, OBBBA’s wide-ranging reforms will negatively impact the oncology sector in several areas:
- Medicaid & Disenrollment Risks: The bill’s Medicaid reforms — including tightened eligibility and redetermination rules — are expected to reduce enrollment. This threatens continuity of care for many oncology patients who rely on Medicaid for treatment access.
- ACA Adjustments: Changes to premium tax credits and enhanced eligibility verification could affect out-of-pocket costs and plan stability for patients receiving ACA coverage
MEDICAID REFORMS
With $625 billion in cuts over the next decade, Medicaid is the program that will be most drastically affected by OBBBA, White said.
- Reforms under OBBBA include: New work requirements for certain Medicaid populations (effective from 2029, requiring retrospective eligibility verification every six months).
- Restrictions on provider taxes and statedirected payments that historically subsidized provider reimbursements.
“One of the most divisive issues has been over disqualifying people who are undocumented,” White said. “Some states, particularly California, have expanded eligibility for Medicaid coverage for the undocumented.”
The second big eligibility change is centered around community engagement. Able-bodied adult Medicaid recipients ages 19 to 64 who are not exempted due to disability, substance use disorder, caregiver status or illness will be required to work, provide community service or take education classes 80 hours per month.
“Folks who don’t meet the 80-hour requirement would no longer qualify for Medicaid or the ACA,” White said. Congress also changed how states will be able to finance some of their Medicaid programs. First, it limited the use of provider taxes for expansion states, setting the maximum rate and reducing it over time to 3.5% by 2031.
“Basically, states tax providers and then use that money to pay providers more and then draw down additional ederal matching dollars. It was a mechanism by which states were able to get more money for their program,” White explained. “Different administrations — including Obama, Biden and Trump — have said that was gaming he system and they wanted it to stop.”
Second, OBBBA caps state-directed payments in expansion states. Providers in expansion states will only be paid 100% of the Medicare rates, and in non-expansion states, 110%. “That was really to get it down to closer to the Medicare side,” White explained. “States have been setting some of the payment rates up to 100% of commercial rates. This was really an effort to bring it back into a more reasonable frame for government financing.”
ACA CHANGES
The majority of the remaining cuts will come from the ACA through strengthened eligibility requirements and redeterminations.
The impact is not insignificant, White noted. “The net effect is that if fewer people have access to these programs, more people may be showing up in physician offices who lack coverage and may struggle to afford their care and the out-of-pocket cost requirements.”
MEDICARE INCREASE
On the plus side, the OBBBA includes a 2.5% payment update for providers in 2026, White noted, “But for oncology, it’s a mixed bag. It depends on what specialty you’re in, based on how the underlying statute governs who is reimbursed for what.”
“Going into 2026, the statute and its regulation were likely to drive another significant cut in the conversion factor, which would have led to overall decreases across the board,” White said. “Congress wanted to avoid that and provided the one-year update of 2.5%.”
IRA ORPHAN EXCLUSION MODIFIED
OBBBA also offers a fix to the Inflation Reduction Act (IRA) orphan exclusion, modifying the exclusion to include drugs that are designed for one or more rare diseases or conditions.
“Basically, it says that the period of time that these drugs can be chosen for price controls in the IRA price fixing program only starts once the second indication comes about, so seven to 11 years after that second indication,” White said.
Previously, approval of the first indication significantly shortened the length of time the product could be on the market before being subjected to price controls.
“That had a very chilling effect on secondary research and one of the reasons this is so important for oncology is that about 60% of current therapies on market in the oncology space are secondary research indications,” White said. “Fixing this is going to be critical or research and new therapies and hopefully cures going forward.”
EXPANSION OF HEALTHCARE SPENDING ACCOUNTS
Congress had a strong desire to expand Healthcare Spending Accounts (HSAs) and increase the number of people with accounts so they can better afford gaps in insurance, White said.
“This is particularly important in catastrophic and ACA Bronze plans because there are at least 10 million people on those plans and they have significant cost sharing,” he said.
RURAL HEALTH FUNDING
OBBBA also established a $50 billion fund to be administered over the next five years through the Rural Health Transformation Program. It was intended to give states more money to fill in to where particularly vulnerable institutions in rural areas that might be negatively impacted by Medicaid changes.
“It’s not a dollar-for-dollar offset, but it’s certainly additional help for those hospitals and health systems in rural areas that might struggle post-change to those Medicaid financing mechanisms,” White said.
WHAT’S NEXT?
Congress is looking into another reconciliation bill, another big budget bill and an end-of-the-year package which could include several healthcare revisions.
PBM REFORM: White said one item that is almost unanimously supported is a bipartisan agreement on Pharmacy Benefit Managers (PBMs). PBM reform was included in the Housepassed OBBBA, but didn’t make it into the final bill.
“Almost everyone in Congress I talked to says PBM reform will happen this year,” White said. “And when I say PBM reform … I mean (issues like) eliminating reimbursements based on the gross cost of the drug to rebates passed to the patient, transparency to employers and patients about PBM operations and costs, a ban on Medicaid spread pricing, and using more accurate data in reimbursing pharmacies in the PBM context.”
Once an issue that was virtually unknown in Washington, PBMs and their role in prescription drug costs, market competition and patient access became a hot topic last year following a series of investigatory hearings by House and Senate committees.
“Five years ago, when I used to go and talk to members of Congress about PBMs, all of them pretty much asked me, ‘What’s a PBM?’ That dynamic is not the same now,” White said. “Every member of Congress knows exactly what a PBM is and they have a position on PBMs, so that there is bipartisan effort to reform how PBMs operate in the market. We believe that will happen by December, if not sooner.”
MEDICARE PAYMENTS: While the OBBBA only offered a one-year fix on increasing Medicare payments to providers, the House initially planned to offer an annual update.
“I’m not as optimistic that that’s going to happen because there’s a price tag associated with that,” White said. “I’m not convinced that it will make it into either the reconciliation or an end-of-the-year package.”
“There is a bipartisan effort to reform how PBMs operate in the market. We believe that will happen by December, if not sooner.”
FOREIGN DRUG PRICING: Most Favored Nation Drug Pricing, or what the Trump administration has termed “foreign freeloading,” has grabbed the attention of many members of Congress and has become a politically popular issue, White said.
“There’s a lot of interest in what manufacturers are doing right now in direct-to-consumer in trying to bypass benefit design and insurance altogether
(in an effort to get patients access to the best negotiated price),” White said. “The administration keeps saying they will have an announcement soon, but clearly they don’t have the statutory authority to affect commercial pricing.”
Because of this, he said he doesn’t expect action on these issues to be part of a bill, but rather done on the regulatory side.
“What they do have the authority to do is to use federal agencies (such as U.S. Customs and Border Protection (CPB), the Federal Trade Commission (FTC) and the Department of Justice (DOJ)) to do things like to go after price gouging and uncompetitive practices.
“The administration also can use the Department of Health & Human Services (HHS), the U.S. Food and Drug Administration, Centers for Medicare and Medicaid Services to create pilot programs for Medicare and Medicaid, slow product approvals for expensive products and accelerate product approvals that meet an overseas price.
TECHNOLOGY: The key takeaway is that the administration wants to make healthcare easier, White said.
“HHS is looking at ways to further free up data to make it easier for providers to access information on their patients to deliver quality care,” White said, adding that he expects to see additional announcements on transparency for providers and patients and a push for greater use of Artificial Intelligence in healthcare to reduce burdens on practices.
“So, if you have ideas on these subjects, be proactive and reach out to your member of Congress, talk to them about the burdens you face every day and how policy on data technology could potentially help you solve them,” White told NCODA webinar viewers.