When Sen. Mike Crapo (R-ID) needed a boost, he reached for his 5-hour Energy shots.
The soft-spoken 75-year-old chair of the Senate Committee on Finance told the Washington Examiner that the caffeine drinks and a firm Independence Day deadline from the president were the only things keeping him awake in the three sleepless days leading up to July 1, 2025, when the Senate passed the One Big Beautiful Bill Act.
In the weeks and months leading up to those final caffeinated all-nighters, Crapo said the hardest challenge was getting his Republican colleagues to be confident that the Medicaid reforms in the partisan spending bill were not intended to decimate entitlements, but rather to root out waste, fraud, and abuse like President Donald Trump requested.
“It was probably the hardest thing to get us to the final 50 votes, and the reason is because the attack on that was, I think, so overstated and wrongly presented in the media,” Crapo said.
Republicans early on knew it was going to be a tough political fight, but reforming entitlement programs was going to be the only way to help offset the costs of making Trump’s first-term tax cuts permanent — as well as following through on his campaign promise of no tax on tips, overtime, and Social Security checks.
With Trump’s other campaign promise of shielding sacrosanct Medicare and Social Security, Medicaid was the only entitlement program Republican legislators had the green light to change significantly.
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Still, there was confusion at times on whether Medicaid was fair game. In February 2025, Trump said Republicans are “not going to touch” Medicaid. Months later, he vowed to veto legislation if it slashed Medicaid, though insisted his party is “not cutting it.”
The White House put out a “myth vs. fact” memo last summer, after the bill was enacted, that denied assertions that families were going to be kicked off Medicaid, reiterating “there will be no cuts” to the federal-state program. Trump did consistently open the door on cutting out fraud and abuse in Medicaid, and Republicans on Capitol Hill followed those orders.
The Congressional Budget Office, a nonpartisan agency that estimates the price tags of legislation, concluded that the One Big Beautiful Bill Act would reduce Medicaid spending over the next 10 years by $1 trillion. Democrats, led by Senate Minority Leader Chuck Schumer (D-NY) and Sen. Patty Murray (D-WA), almost immediately used Medicaid as their lead line of attack on the GOP legislation, calling it the “big ugly betrayal.”
Rep. Frank Pallone (D-NJ), ranking member of the Energy and Commerce Committee, last year told his Republican colleagues, “So, you can call it a trim, you can call it a cut, call whatever you want. The bottom line is these people are going to lose their Medicaid.”
Rep. Brett Guthrie (R-KY), chairman of the House Energy and Commerce Committee that ushered in the bulk of the Medicaid reforms, told the Washington Examiner the criticisms are unfounded because Medicaid still grows beyond the rate of inflation, even if at a slower rate than before the bill.
“People think there were just cuts to Medicaid,” Guthrie said. “It’s not accurate at all. Medicaid still grows.”
He said he and his team began working with domestic policy advisors in the White House in January 2025 to ensure the reforms trim the waste, fraud, and abuse from the Medicaid program without harming beneficiaries.
Those changes ended up including restricting immigrant eligibility, income verification mandates, work requirements for able-bodied adults on the program, and closing loopholes in the tax structure for states to fund the program.
Most of the program’s revisions that are expected to take the toughest toll on the healthcare system are scheduled to take effect in 2027, after November’s midterm elections. Initially, Republicans proposed that the Medicaid revamp take effect in 2029, but conservatives insisted that the timetable be moved up. Regardless, the measure created the opportunity for Democrats to make healthcare a defining issue for the 2026 and 2028 elections.
The first challenge for GOP leaders was getting Republicans on the same page, as centrists eyed the Medicaid changes warily. (Rep. Brian Fitzpatrick (R-PA), who represents a battleground district, voted against the final bill, citing its Medicaid provisions.)
During the first GOP meetings about the spending package in January 2025, Guthrie knew that the president’s July 4 deadline was going to be a challenge with the razor-thin Republican majority in the House.
“I’m thinking we got a two-or-three vote margin here,” Guthrie said. “How do we get what needs to be reformed in healthcare so we can take care of the most vulnerable, particularly Medicaid as we were supposed to, but how can you get everybody on board?”
The hook for changes: ‘Medicaid money laundering’
Before even getting the votes to pass a bill, the first hurdle was explaining how Medicaid is funded, both to members of Congress unfamiliar with the program and to voters back home. How do you advance that nitty-gritty policy change to a social welfare program that supplies health insurance to nearly 75 million low-income or disabled Americans and children? A clever hook that targets waste, fraud, and abuse in the program that protects the most vulnerable.
Brian Blase, a health policy advisor for the White House during Trump’s first term and founder of the free-market Paragon Health Institute, was instrumental in advancing key aspects of Medicaid reform that made it into the legislation.
The term “Medicaid money laundering” resonated with Republicans to explain how states used taxing powers to increase their budgets and, in turn, get more Medicaid dollars from the federal government.
The gimmick: Healthcare providers were okay with paying high state taxes, known simply as provider taxes, because they knew their facilities would reap the benefit of more Medicaid dollars from the federal government’s matching rates, or FMAPs, if they contributed more to the state’s budget.
The concept struck a chord for fiscal hawks in the House Freedom Caucus and quickly spread throughout the GOP conference.
Rep. Chip Roy (R-TX) cited Paragon data and the phrase “money laundering” in a letter sent to fellow members of Congress on May 1, 2025. The letter outlined not only the provider taxes issue but also how work requirements for able-bodied Medicaid recipients would keep the program financially viable for the “most vulnerable.”
By June 2025, the phrase became integral to how the Republicans defended the upset to the system. House Budget Committee Chairman Jodey Arrington (R-TX) and Senate Majority Whip John Barrasso (R-WY) each called provider taxes “gimmicks” and used the term “Medicaid money laundering” in their respective pushes to get the changes through.
Republicans recoil in the Senate
Several Republicans, including Sens. Lisa Murkowski (R-AK), Susan Collins (R-ME), and Josh Hawley (R-MO), expressed deep reservations about how the bill would affect their states, both in terms of Medicaid beneficiaries losing coverage and in maintaining hospital funding.
But the loudest GOP critic was Sen. Thom Tillis (R-NC), one of the three Republican votes against the bill in the upper chamber.
Tillis told the Washington Examiner he agreed with the spirit and direction of the reforms passed by fiscal hawks in the House, but he impressed on his Senate colleagues that “you can’t cold turkey this policy.”
Tillis used his former IBM executive experience to prepare for his three separate meetings with Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, and other health advisers for the Trump administration in the week leading up to the Senate vote. Oz didn’t comment for this series.
Tillis shared a comprehensive impact analysis on how the bill would affect Medicaid beneficiaries in his state with Oz, a product of conversations with state legislative leaders in both parties. Tillis’s team also reached out to a hospital association for its input and then “harmonized” the findings.
When confronted with the number of 600,000 North Carolina Medicaid beneficiaries losing coverage in his state, Tillis says administration officials admitted that states like North Carolina would need “to come up with alternative revenue streams” to continue to run the state’s Medicaid program as it had been. The senator said he made similar impact analyses for other states as well to warn his fellow Republicans that they had “some storms on the horizon.”
“You’re at a significant level of impact that nobody’s talking about,” he said of his message to those senators.
Oz and Tillis had three video calls in the final days before the vote. Oz’s arguments didn’t take. Meanwhile, Senate GOP leaders urged Tillis to “take one for the team,” Tillis said. But they didn’t harang him and pivoted to Murkowski. Tillis said he didn’t speak directly with Trump until after he rejected the bill. He claimed he could have gotten to yes if the White House had phased in the Medicaid changes more gradually.
Crapo said his biggest challenge was getting Republicans to “be confident that they could defend these things” to voters come the midterm elections. Of his conversation with Tillis, Crapo said he still is “not sure whether his concern was more substance or the politics.”
Unlike Tillis, Crapo said Hawley eventually embraced the Medicaid overhaul.
“Josh came around and said, ‘Yeah, that’s right, this is going to be a terrific battle, political battle, but this is legitimate, and if we’re ever going to deal with waste, fraud, and abuse,’” Crapo said of Hawley. “And if we can’t do these things, then what can we do?”
Hawley’s office did not respond to the Washington Examiner’s request for comment.
Rural Hospital Fund and the eleventh-hour Senate scramble
Part of what got Hawley and other centrist holdouts on board in the end was the development of the Rural Health Transformation fund, a $50 billion allotment to be distributed to states over the next five years. Ostensibly, the intention is to bolster health systems to prepare them for the coming changes in funding.
Democrats, along with hospital and medical associations, argued from early on that the bill would exacerbate underlying financial problems for rural hospitals, which have been struggling to stay afloat for decades.
Guthrie said the idea for a rural hospital fund to offset anticipated financial problems for medical facilities in traditionally underserved areas was first conceived by Reps. Gary Palmer (R-AL) and Marianette Miller-Meeks (R-IA). They were not able to advance it in the House bill, but Palmer and Miller-Meeks played a key role in getting senators behind the proposal.
Crapo said a generous rural health fund was “something that was universally agreed to,” but he had to do work behind the scenes to get the fiscal hawks in the party in line.
“I negotiated in the weeks leading up to the bill with some of the strongest, most hardcore conservative, ‘cut the waste’ senators in our caucus about how we can put together a rural hospital bill to help counterbalance the injury here,” Crapo said.
As to the structure of the fund, Crapo said he and his team relied upon Oz and the Medicaid team at CMS to decide how the agency was “going to divvy it up between the states,” including how states could apply to use the funds.
While Oz was working on the policy details, Crapo was getting the votes.
On the evening of June 30, Crapo and his 5-hour Energy drinks, along with others in Senate GOP leadership engaged in tough negotiations with some of those most vocal objectors to pin down a number that would make them more comfortable supporting the legislation.
Republican staff familiar with the late-night discussions told the Washington Examiner that Murkowski was one of the last holdouts to agree to vote for the bill in the wee hours of Tuesday, July 1.
Eventually, behind closed doors, the senators agreed on $50 billion. Out of that, Alaska is expected to receive $1.36 billion over the next five years.
Fifteen days after voting for the final bill in the Senate, Hawley introduced legislation to increase the rural health fund from $50 billion to $100 billion. And this year, Hawley introduced a bill to boost funding directly to rural emergency rooms, citing concerns over rural hospital funding to keep urgent and trauma-related care available for sparsely populated communities.
A heavy lift in the House
While Crapo’s work was done on July 1, Guthrie’s toughest challenge was just beginning.
Guthrie, who earned a degree in mathematical economics from the U.S. Military Academy at West Point, said the Senate “did a little more” on healthcare than what he thought could get through the House. He was “really concerned that we would lose some people on voting for the final version of the bill.”
At a meeting with House Republicans, Guthrie explained how they could defend the legislation to their constituents, including the healthcare providers in their districts, by explaining that the fraud-cutting measures in the legislation would save Medicaid in the long run.
Guthrie said he told concerned colleagues that the bill’s goal of getting ineligible enrollees off the program and more people into the workforce is “going to free up the states to have more money to put back into the program.”
“If we force these states to make sure that they’re only serving eligible people for Medicaid, it’s going to save those states money, and so they can put that back into healthcare as well,” Guthrie said.
In the end, only Reps. Fitzpatrick and Thomas Massie (R-KY) broke ranks with the GOP. Massie, the staunch libertarian fiscal hawk who has consistently infuriated Trump, lambasted the bill for its projected $3.4 trillion addition to the deficit over the next decade.
Fitzpatrick’s battleground district, which contains Bucks County outside of Philadelphia, is home to a variety of life science and biotechnology companies and is deeply connected to various major hospital networks in the state, including the University of Pennsylvania medical system.
When asked about his decision to vote no on the bill, Fitzpatrick told the Washington Examiner that the Senate version went too far.
“I thought it went beyond fraud in Medicaid and ate into the program, and I didn’t like that, and these were based on the Senate amendments,” Fitzpatrick said. “One would think that things get better in the Senate, not worse. It got worse.”
The healthcare domino effect
What Republicans could not have predicted was how the healthcare provisions of the bill would trigger a partisan standoff that led to the longest government shutdown in United States history last fall. Democrats, pointing out that the real effects of the Medicaid cuts won’t be felt until next year, say healthcare will be front and center on the ballot box for years to come.
Before Trump’s signature was dry, Democrats launched their campaign on how the One Big Beautiful Bill Act did not renew COVID-era enhanced premium subsidies for Obamacare insurance plans. The enhanced subsidies were originally passed as part of the Democrats’ partisan reconciliation legislation during former President Joe Biden’s tenure, which were aimed at increasing health insurance access at the height of the COVID-19 pandemic.
The increased subsidies, mainly directed to those earning four times the federal poverty level, were set to expire at the end of 2025, and Republicans were blamed for not including subsidy extensions in their healthcare overhaul.
Several Republican sources told the Washington Examiner that it was unrealistic for Democrats to suggest that any continuation of Obamacare subsidies be addressed in a GOP reconciliation package. Doing so would have torpedoed the entire bill.
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For his part, Tillis — who opted not to run for reelection after clashing with Trump about his no vote — has sparred repeatedly with the president and his administration over the last year. Trump has returned fire, writing on Truth Social in May, “I called him a ‘Nitpicker,’ always fighting against the Republican Party, and ME, mostly on things that didn’t matter,” he wrote.
The North Carolina senator maintains the bill’s “well-intentioned healthcare policy, poor execution strategy” will cost Republicans in the midterm elections. Tillis predicts the cracks will start hitting states hard in 2027.
David Sivak, Zach Halaschak, Callie Patteson, and Lauren Green contributed to this story.
Members of the Washington Examiner’s staff who have worked on this series over the past several months are Haris Alic, Hailey Bullis, Bob Cusack, Christian Datoc, James A. Downs, Gabrielle M. Etzel, Lauren Green, Zach Halaschak, Chris Irvine, Joseph Lawler, Naomi Lim, Maydeen Merino, Callie Patteson, Mabinty Quarshie, Samantha-Jo Roth, David Sivak, and Ramsey Touchberry.