President Signs Massive Tax and Budget Bill

President Donald Trump’s One, Big Beautiful Bill Act (OBBB), which has dominated Congress’s attention for the last few months, has been signed into law by the president. The budget and tax legislation includes scores of policy changes impacting healthcare, some good, and some bad. During Congressional consideration of the measure, ASCP and advocacy partners, including the American Medical Association, expressed concern about several provisions in the bill. In addition, the legislation includes numerous changes to federal student loan programs that may exacerbate healthcare workforce shortages. 

Medicare/Medicaid: Congress included a positive update of 2.5 percent to the Medicare Physician Fee Schedule (PFS) in OBBB for 2026. Unfortunately, the final bill did not include the House-passed—and ASCP endorsed—provisions that would have provided a permanent annual update tied to the Medicare Economic Index (a measure of inflation for medical practice costs).  

Moreover, there is a concern that the bill, which increases the U.S. debt an estimated $2.3 trillion over the next 10 years, could result in significant cuts to Medicare, Medicaid, and many other federal programs. These cuts would be required by an existing law, known as the Statutory Pay-As-You-Go Act, which imposes automatic across-the-board cuts in federal spending when deficits increase. However, it is unclear whether these cuts would actually occur as Congress has in the past blocked some of these cuts. ASCP will be working to prevent such cuts from impacting Medicare and other public insurance programs. 

In addition, the Congressional Budget Office, an independent advisory agency to Congress, estimates that the legislation would cut Medicaid and CHIP about $1 trillion over 10 years and could result in more than 10.5 million individuals losing their insurance coverage. ASCP, along with 75 other medical societies, urged Congress not to cut benefits or access to these programs for eligible individuals. 

Education and Student Financial Aid Changes: On the positive side, the new law includes the provisions of the Tomorrow’s Workforce Act, for which ASCP has been lobbying. The measure allows individuals to use their 529 funds to pay for qualified credentialing programs and related costs. The change means that 529 funds may soon be used to pay for certification examinations, study guides, and possibly even the cost of certain laboratory training programs. 

Trump’s signature bill also includes a number of cuts—estimated at $300 billion—to Federal Student Financial Aid programs. The bill eliminates the GradPLUS program, used by 40 percent of medical students, effective July 1, 2026. It includes “legacy provisions” to maintain access to loans for current borrowers. OBBB also sets caps on the amount of financial aid a student can borrow. It consolidates the number of student loan repayment options from a dozen to just two and lengthens the loan forgiveness term for these programs from 20 years to 30 years.  

In addition, the legislation imposes a cap on the ParentPLUS program of $65,000. These loans will no longer be eligible for forgiveness like other student loans. Pell Grant program eligibility would also change—part-time students would no longer be eligible, but eligible students will soon be able to use this program to pay for short-term professional programs, like certificate programs.  

The loan caps are expected to be particularly onerous for medical students. The legislation imposes a cap of $100,000 for students seeking master’s degrees and $200,000 for doctoral, medical, and professional degrees. According to the Education Data Initiative, medical school graduates owe approximately $240,000 on average on student loans. The new caps will be particularly challenging for individuals attending private medical schools. The American Association of Medical Colleges reports that the average cost of attending a private medical school is $390,848 compared to $286,454 for in-state public medical school. 

In several letters to congressional leaders (see here and here), ASCP and a coalition of medical societies opposed the proposed student loan cuts and their impact on training the next generation of physicians in particular.  

The reduced ability to secure federal financing for college degrees may force students to seek loans from commercial lenders, which provide fewer borrower protections and are not eligible for loan forgiveness. Education experts believe that the changes contained in the OBBB will likely reduce the number of students seeking college degrees. ASCP is concerned that these changes may result in a worsening of healthcare and laboratory workforce shortages, particularly for pathologists and other physicians. We will be working with our advocacy partners to address the impacts of these policies on the pathology and laboratory medicine workforce. 

Artificial Intelligence: The OBBB also includes several provisions related to artificial intelligence (AI). Notably, the bill did not include provisions contained in the House version of the budget and tax bill preempting state laws governing the use of AI. This change is especially relevant to the medical and laboratory community as AI is increasingly being integrated in reimbursement decisions as well as diagnostic device development and clinical care.   

California, for example, restricts the use of healthcare-related AI, algorithms and similar technologies by private payers to help ensure that treatment decisions are made by healthcare providers. Given that Congress passed on including a moratorium on state AI regulation, diagnostic device manufacturers and clinical laboratories offering laboratory developed tests will need to ensure that their products and services are compliant with applicable state laws.  

ASCP is still in the process of reviewing this legislation and will be working with our advocacy partners to address outstanding concerns with the legislation.