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AP PHOTO/MATT ROURKE
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IAP PHOTO/MATT ROURKE
But if you ask health care leaders, the bill — often referred to as OBBBA and signed into law by President Donald J. Trump on Independence Day 2025 — will have a debilitating effect on academic health systems, the future physicians they teach, and the people who rely on those systems for care.
“As patients lose coverage and hospitals provide more unpaid care, academic health systems will face tighter budgets,” says Bobby Mukkamala, M.D., president of American Medical Association. “That could lead to slow hiring and reduced staff.”
Academic health systems or centers are hospitals integrated within a medical school or university. In layman’s terms, they’re teaching hospitals. Examples include Johns Hopkins Medicine, the UCLA Medical Center and the George Washington University Hospital, to name a few.
These teaching hospitals play an outsized role in providing health care to those who need help paying for it. Schools that belong to the Association of American Medical Colleges, or AAMC, for instance, only represent 5% of all hospitals nationwide, but provide 27% of the Medicaid hospitalizations and 33% of hospital charity care.
Under the framework of OBBBA, academic health systems are in serious danger of having their missions compromised, and many Americans’ health will deteriorate as a result, Mukkamala and a representative of the AAMC told The EDU Ledger.
Mukkamala notes that across the board, OBBBA will make it harder for patients to keep Medicaid coverage, with an estimated 11.8 million people losing insurance due to a $1 trillion cut to Medicaid over the next decade.
One of the ways OBBBA will make it harder to keep Medicaid is by requiring states to redetermine Medicaid eligibility every six months instead of annually for low-income adults who become eligible for Medicaid in states that expanded their programs under the Affordable Care Act, according to the Association of American Medical Colleges.
“Requiring more frequent Medicaid eligibility checks will create additional bureaucratic and administrative hurdles to coverage, ultimately forcing people off the Medicaid rolls,” an AAMC factsheet states.
There will be long-term effects for people who rely on Medicaid.
“Patients will have a harder time accessing care, and many may delay or even skip seeing their doctor,” Mukkamala says. “When people can’t get care, treatable illnesses are more likely to become more serious and more expensive to treat.
“For health systems, these changes will likely worsen the financial burdens and the administrative workloads, particularly in rural and underserved communities that are already stretched thin.”
The mass loss of health care coverage will ultimately shrink the size and capabilities of the health care workforce. These imminent fiscal challenges come at a time when the U.S. is already facing a projected shortage of up to 86,000 physicians by 2036.
“I think the One Big Beautiful Bill Act could exacerbate that shortage,” says Leonard J. Marquez, senior director of government relations and legislative advocacy for the Association of American Medical Colleges.
“Graduate medical education is critically important, training is critically important to ensuring that we’ve got a workforce that can meet our needs,” Marquez says. “We need to be training more doctors, we need to be training more people. And what we’re doing [through OBBBA] is limiting the resources.
“And those hospitals are going to have to figure out: How do we make all of this work? How do we fund our share of those costs?”
The EDU Ledger reached out to several academic health systems for comment, but insiders say many medical schools are avoiding making public statements to stay out of the crosshairs of an administration that is seen as vindictive and will not hesitate to withhold resources in order to keep colleges and universities in line with its agenda.
Marquez warns that the effects of OBBBA could be felt beyond the Medicaid population.
“Medicaid patients aren’t the only people who could feel the impact,” Marquez says. “Our member institutions use their clinical revenue to help support all of their programs and their mission areas. Massive cuts or reductions will impact their ability to do all of those things.
“People with private insurance could feel it,” Marquez says. “It may not be that you can’t get care, but you may not be able to get it as quickly as you need or as quickly as you want to. Those are some of the things we worry about from a patient perspective.”
Mukkamala says the law’s changes to student loans will also make it harder for many students to attend medical school, especially those from low-income backgrounds.
“High student debt can contribute to physician shortages in rural and underserved areas by driving medical students to pursue specialties besides primary care and drive new physicians to seek higher-paying positions in larger cities,” Mukkamala says. “The AMA is actively advocating for policies that expand the health care workforce and protect physician training to meet patient needs.”
But the view that OBBBA’s new student loan rules are harmful is not universal. The new law places annual limits on loans for graduate students — which some analysts believe could stem tuition increases they attribute to “unlimited” lending. Graduate medical students will be able to borrow up to $50,000 per year under the new law and an aggregate limit of $200,000 according to an analysis by the American Enterprise Institute.
“The federal student loan program suffers from excessive levels of borrowing,” writes Preston Cooper, the author of the analysis and senior fellow at AEI who focuses on student loans and higher education reform. “While the government caps lending to undergraduate students at modest levels, graduate students … may borrow up to their college’s cost of attendance — which is defined by the college,” Cooper observes of policy before OBBBA. “Because institutions set their own prices, this means that lending to graduate students and parents is effectively unlimited.”
And that “unlimited lending to graduate students” has led colleges to raise tuition, Cooper wrote, citing research from the National Bureau of Economic Research.
Marquez, of the AAMC, notes that physicians must complete residencies in their specialty before they can practice independently, and that these residencies cost about $25 billion a year — or about $180,000 per residency.
About three quarters of all residencies are housed at academic health facilities that are members of AAMC.
“Medicare helps support that. Medicare provides almost $6 billion a year to help support that training,” Marquez says. “But the rest of that money — that $25 billion — those health systems and hospitals have to figure out how they’re going to put the rest of those dollars together.
“When we talk about cutting almost a trillion dollars out of Medicaid, well, yes that’s not technically impacting Medicare support for graduate medical education,” Marquez says. “What it could do, I worry, is limit our members’ ability to continue investing in those graduate medical education positions. That is a concern for us as it relates to the workforce.
