The 2025 budget bill: Headed to the Senate with plans to impact Medicaid 

The 2025 budget reconciliation bill is stirring up intense debate, with major implications for Medicaid and the mental health community. If you’ve followed my previous blogs on Medicaid and the budget bill, you know how complex and overwhelming these changes can feel.  

My goal is to simplify the process, break down the key provisions, and help you understand how this legislation could impact mental health care. In this blog, we’ll take a closer look at the changes, including important updates to work requirements and how they might affect access to care. Together, we’ll navigate these challenges step by step, ensuring you stay informed and supported through the uncertainty. 

From the House to the Senate: The path of a bill 

After passing in the House of Representatives, a bill moves to the Senate for review. Both chambers must agree on the same version of the bill before it can go to the President to be signed into law. If the Senate makes changes, the bill goes back to the House for approval or further negotiation. This process, often involving conference committees, ensures both chambers agree on the final version.  

Right now, the 2025 budget bill is under this process, and its future is uncertain as Senate Republicans and Democrats remain divided. Proposed changes to Medicaid, particularly around eligibility, funding, and access, are a major point of concern, especially for the mental health care community. 

Breaking down the bill’s key provisions 

The budget bill introduces substantial changes to Medicaid, impacting eligibility requirements, financing mechanisms, and access to care. Here is a detailed overview of the major provisions: 

Eligibility changes 

• Work requirements  
  Adults aged 19-64 under the Affordable Care Act (ACA) Medicaid expansion will need to fulfill a minimum of 80 hours per month in work or approved activities to maintain eligibility. This requirement is now set to take effect in December 2026, earlier than initially proposed. 

• Eligibility redeterminations  
  States will conduct eligibility reviews every six months for Medicaid expansion populations, adding more frequent checks to assess continued qualification. 

• Verification activities  
  Mandated measures include verifying enrollee addresses, reviewing the Social Security Administration’s master death file quarterly, and checking for duplicate enrollments to ensure compliance. 

• Immigrant coverage  
  Medicaid coverage during immigration status verification will no longer be federally mandated, removing matching funds for such payments. 

• Retroactive coverage  
  The bill limits retroactive Medicaid coverage to one month prior to an application, reduced from the current 90 days. 

Financing reforms 

• Provider taxes  
  While states can still use provider taxes to fund Medicaid’s non-federal share, introducing new or increasing existing provider taxes is prohibited. 

• 1115 waivers restrictions  
  Waivers under Section 1115 must not result in increased federal expenditures compared to pre-waiver scenarios. 

• Improper payment penalties  
  Federal financial contributions to states will be reduced if improper payments, such as for ineligible individuals or overpayments, are discovered. 

Access and oversight 

• Provider screening  
  States are required to verify monthly whether Medicaid or Medicare providers have been terminated in other states. 

• Out-of-state pediatric providers  
  A streamlined enrollment process for out-of-state providers treating enrollees under 21 aims to reduce administrative burdens. 

• Delay on CMS rules  
  Implementation of certain Medicaid improvement rules finalized under the previous administration will be delayed until 2035. 

You might be feeling concerned about how these changes could bring more administrative burdens or even funding cuts, which could impact the care you provide to your patients. And then there’s the work requirements—easily one of the most worrying adjustments. Let’s navigate this together. 

The impact of work requirements on mental health care 

Among the bill’s proposed changes, the introduction of work requirements is particularly significant for patients with serious mental illness (SMI). Medicaid is the largest payer for individuals with SMI, providing access to the care many need to manage their conditions and, critically, to join or remain in the workforce. 

This policy creates a difficult situation for those it’s meant to help. Work requirements are supposed to encourage people to join the workforce, but for many individuals with serious mental illness (SMI), stable access to treatment is essential before they can maintain steady employment. The problem is that these requirements force people to work to keep their Medicaid coverage, yet many can’t access the care they need to work in the first place. Without coverage, they lose access to critical treatment, trapping them in a cycle that’s hard to break. 

This approach risks leaving behind a vulnerable group. While the intention is to prevent misuse by “able-bodied adults,” it overlooks the reality for those with SMI. Many may physically be able to work but face significant mental health challenges that make it difficult. 

If the real goal is to cut Medicaid costs rather than help people get back to work, the policy succeeds. But for mental health providers and their patients, it’s a step backward, harming both individuals and the long-term benefits to society. Supporting people with the care they need is a much better way to help them thrive and contribute in meaningful ways. 

Senate reactions and the path ahead 

The next steps for the budget bill lie in the Senate, where reactions are mixed. Many Senate Republicans have voiced concerns about the fiscal implications of the bill, particularly regarding federal deficits. Some see the proposed Medicaid reforms as insufficiently aggressive, urging deeper spending cuts, while others have expressed hesitation over provisions that could harm constituents or rural healthcare systems. 

This divergence within the Republican Party echoes the challenges the bill faced in the House, where it passed by a slim margin. Should the Senate make substantial changes, the bill will return to the House for approval, potentially prolonging the legislative process. With a target deadline of the Fourth of July for passage, any delay could derail the timeline. 

Senators’ perspectives may also reflect their longer-term view, as they are not up for reelection as frequently as House members. This broader outlook may influence how deeply they scrutinize the repercussions of Medicaid-related provisions. 

Navigating uncertainty together with your patients 

The future of the budget bill may be uncertain, but its potential impact on mental health providers and Medicaid recipients is undeniable. As these changes unfold, it’s crucial to stay informed and proactive to ensure that patient care remains a top priority. 

This is a critical moment to unite—engaging with professional organizations, participating in discussions, and taking action to protect access to mental health care. One of the most impactful steps you can take right now is reaching out to your senators, as they hold significant influence in determining the future of Medicaid reform. The ball is in their court, and your voice can make a difference.  

Platforms like Democracy.io make it easy to find and message your senators directly. Share your concerns, explain how Medicaid reform impacts mental health care, and advocate for policies that prioritize access for those who need it most. Your advocacy is crucial in ensuring that mental health care remains a priority in these discussions. 

Equally important is supporting and educating patients in the months ahead. Helping them understand how these changes might affect their care and guiding them through any adjustments will be key. By working together and staying focused on patient well-being, we can navigate these challenges and continue to provide compassionate, accessible mental health support.   

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