Trump Signs Sweeping Tax Law, $1 Trillion Medicaid Reduction

President Donald Trump on 4 July signed a sweeping reconciliation package that extends the individual and corporate tax reductions first enacted in 2017 while introducing substantial spending changes, most notably to Medicaid. The Congressional Budget Office estimates the law will trim roughly $1 trillion from federal Medicaid outlays over the next decade. Work requirements for certain adult recipients take effect in December 2026, and restrictions on the state provider-tax mechanism follow in fiscal 2028. State health budgets and safety-net providers are preparing for the impact. Kaiser Family Foundation projects Illinois alone could forfeit about $48 billion in federal Medicaid dollars over 10 years. Humboldt Park Health, a Chicago hospital where roughly three-quarters of patients rely on Medicaid, anticipates annual losses of $5 million to $7 million, Chief Executive Officer Jose Sanchez said. Supporters of the measure say the savings will finance extended tax relief and additional border and national-security spending. Critics warn the reductions threaten rural clinics, nursing homes and urban safety-net hospitals, setting up a contentious implementation period ahead of the first benefit changes in late 2026.