The One Big Beautiful Bill Act (OBBBA), officially H.R. 1 in the 119th Congress, marks one of the most sweeping domestic policy overhauls in recent U.S. history. Passed on July 3, 2025 by a narrow 218–214 House vote, the legislation delivers on many of President Trump’s priorities, including tax reforms, border security, and deficit reduction.

Among its far-reaching provisions, the Act enacts major Medicaid changes that will reshape healthcare access, funding, and administration for millions of Americans.

Key Financial Impact

• Federal Medicaid Cuts:$863–$930 billion over 10 years, the largest contraction of federal healthcare funding in decades.
• Coverage Loss:12 million more Americans uninsured by 2034, with 8 million losing Medicaid coverage directly.
• Market Effects:Reduced federal support for ACA marketplaces and Medicaid expansion programs.

Work Requirements for Medicaid

Starting December 31, 2026, certain Medicaid beneficiaries must complete 80 hours/month (20 hours/week) of work or community engagement to remain eligible.

Details:

• Applies to expansion adults ages 19–64.
• Exemptions for individuals with disabilities and other vulnerable groups.
• Estimated 8 million will lose coveragedue to non-compliance, with millions more affected by administrative barriers.

Enhanced Verification & Administrative Changes

• Stricter Eligibility Checks:More frequent verifications to reduce improper payments.
• Regulatory Moratorium:CMS barred from enforcing certain Medicaid, CHIP, and Medicare rules until 1, 2034.
• Administrative Burden:More complex processes for states and beneficiaries.

l Impact on Medicaid Expansion & Federal Matching

• Cuts to ACA Medicaid expansion federal match rates, especially for states covering undocumented immigrants with state funds.
• States may face tough budget choices,maintain coverage with state dollars or scale back programs.

Home & Community-Based Services (HCBS) Changes

• New waiver category for individuals not meeting institutional care level requirements.
• States can apply if programs don’t increase federal spending,potentially expanding access, but within tight fiscal limits.

Rural Healthcare Risks

• 2,086 rural hospitalscurrently receive ~$12.2B/year in Medicaid revenue.
• Median rural hospital Medicaid revenue: $3.9M/year.
• Cuts may force service reductions or closures, creating “healthcare deserts.”

Fraud Prevention & Program Integrity

• Enhanced cross-database checks for income, immigration status, and eligibility.
• Financial penalties for states making erroneous payments to ineligible individuals.
• Increased eligibility redeterminationsto maintain program integrity.

Implementation Timeline

• Most provisions take effect 1, 2026(phased rollout).
• States must update systems, train staff, and create tracking for work and verification requirements.

Long-Term Healthcare Impact

By 2034, the combined effects of funding cuts, work requirements, and administrative hurdles are projected to result in:

• 16 million more uninsured Americans.
• Higher strain on ERs, community clinics, and safety-net providers.
• Disruption to preventive care and chronic disease management

State-Level Variations

Impact will vary based on:

• Medicaid expansion status.
• State labor market conditions.
• Fiscal capacity to supplement federal funding.

Provider Adaptation

Healthcare providers serving large Medicaid populations may need to:

• Expand charity care.
• Seek alternative funding.
• Adopt value-based careand cost-efficiency models.

Bottom Line: The OBBBA’s Medicaid provisions represent a fundamental shift toward tighter eligibility, reduced federal support, and increased state-level responsibility ,changes that will reshape the U.S. healthcare safety net for the next decade.