How the reconciliation bill could impact neurology
August 1, 2025
The One Big Beautiful Bill Act was signed into law earlier this month, and the expansive budget reconciliation bill contains a number of provisions affecting health care. So, as implementation gets underway, what can US neurologists and other neurology professionals expect? Here’s a quick guide.
While this legislation addressed a wide scope of issues, it’s important to note that it did not address funding for neuroscience research at the National Institutes of Health in fiscal year 2026. Funding levels for the NIH are decided during the appropriations process, which started in April and will likely be finalized at the end of this year. The AAN will continue to advocate that Congress fully fund neuroscience research at the NIH.
You can see how the AAN advocated for changes in this legislation to protect neurologists and their patients by visiting our comment letters page.
Fee schedule conversion factor increase
The final package includes a 2.5% increase to the Medicare Physician Fee Schedule conversion factor for 2026. The AAN and other health care associations have long called for a fix to the physician payment system, including annual updates tied to inflation. While this is not a comprehensive solution, its inclusion—after not being part of the first proposed version of the reconciliation bill in the Senate—shows the impact of health care advocacy. For more on recent updates for the 2026 Medicare Physician Fee Schedule, see the AAN’s summary.
The AAN will continue to work toward a long-term solution to Medicare payment reform.
Medicaid impacts
A number of provisions impact Medicaid and are projected to significantly increase the number of uninsured Americans.
First, states that have expanded Medicaid will be required to conduct eligibility determinations twice a year rather than annually. All states will be required to establish work requirements for low-income adults without dependents, and states will be allowed to impose additional cost-sharing requirements for the Medicaid expansion population.
The bill also amends eligibility for Medicaid and CHIP coverage among people who are not US citizens. It limits retroactive Medicaid expansion coverage to one month prior to a person’s application date and retroactive traditional Medicaid coverage to two months prior. Finally, it prohibits Medicaid funds from being paid to certain prohibited entities for one year after enactment.
Many of these changes will not go into effect immediately. AAN advocates will continue fighting for our members and the patients with neurological conditions who rely on Medicaid for coverage.
Student loan impacts
The bill includes massive changes for student loans, drastically impacting many people’s options for paying for higher education—especially medical students, whose education is notoriously expensive.
First, it terminates the authority to provide subsidized loans to undergraduate students or Federal Direct PLUS Loans to graduate or professional students after July 1, 2026. It caps loan limits for graduate and professional students at $100,000 and $200,000, respectively. Finally, it caps borrowing for parents up to $65,000 in Federal Direct PLUS loans, regardless of how many students the parent is borrowing for.
As the US population ages and demand grows for neurologists, these changes could block many Americans from the already-demanding path to becoming a physician, worsening the physician shortage.
Interested in joining the conversation and being an advocate for your field and your patients? Find out how to get involved and consider joining the Political Outreach for Neurological Support (PONS) network.