On June 1, 2025, President Trump signed into law the so-called “One Big Beautiful Bill Act” (OBBBA) (P.L. 119-21) which slashes the nation’s largest health care coverage program, Medicaid, by $1 trillion over ten years to partly pay for a tax cut that mainly benefits the wealthy and large corporations.  As a result, 11 million Americans are expected to lose Medicaid coverage after the cuts start to become effective on January 1, 2027.  Emergency rooms and entire hospitals that largely depend on Medicaid patients will close and many Medicaid long-term services and supports (LTSS) will be reduced or stopped.

Medicaid provides health care to children younger than 18 from families with low and moderate incomes, pregnant women with low and moderate incomes, parents with very low incomes, and individuals with disabilities and seniors who require LTSS.

Prior to OBBBA, the Affordable Care Act (P.L. 111-148) created “Medicaid expansion,” which allowed states to extend eligibility to nearly all low-income adults with incomes up to 138 percent of the Federal Poverty Level (FPL) (about $21,597 for an individual in 2025). It is voluntary for states, with the federal government covering 90 percent or more of the cost. Forty-one states (including DC) have expanded Medicaid.  As of June 2024, over 20 million people were enrolled through Medicaid expansion, representing nearly a quarter of total Medicaid enrollment across all states and 31 percent of total enrollment in expansion states.

Work-Reporting Requirements Will Likely Accelerate Losses in Coverage in 41 States That Have Adopted Medicaid Expansion Coverage

OBBBA requires beneficiaries who receive Medicaid expansion coverage to work, volunteer, or participate in work-related activities for 80 hours per month or are enrolled in school at least half time, unless they qualify for and receive an exemption based on characteristics such as pregnancy, medical frailty, caring for a disabled family member, or being a parent of a child under 14. In addition, new Medicaid expansion applicants will need to demonstrate that they meet work requirements before applying.

While initial guidance on work requirements was announced in December 2025, more detailed regulatory requirements are due to be issued by the Centers for Medicare and Medicaid Services (CMS) in June 2026. In each state, these work requirements will affect tens of millions of Americans.

Notably, in previous analyses, the Kaiser Family Foundation has found that most Medicaid adults under age 65 are working already (without a requirement) — or that they face barriers to work. Many Medicaid adult beneficiaries who are working low-wage jobs are employed by small firms and in industries that do not offer health insurance.  Accordingly, the Congressional Budget Office (CBO) has concluded that a Medicaid work requirement is unlikely to have any meaningful impact on the number of Medicaid enrollees who are working.

Yet, due to administrative barriers and processing errors by states, CBO estimates that OBBBA’s work requirements will result in reduced federal Medicaid spending by $326 billion over ten years, representing the largest share in total Medicaid cuts included in the law. Analysts note that these cost savings will primarily be achieved from lost coverage, negatively affecting an estimated 5.2 million to 10 million people by 2034.

Steep losses in Medicaid coverage are projected to occur because many beneficiaries will struggle to document that they meet rigid, red-tape-laden work requirements imposed by some states even when they work or should qualify for an exemption. In Arkansas, when  work requirements were in place before OBBBA, results showed that “many participants were unaware of the work requirement or found it too onerous to demonstrate compliance.”

Among the most vulnerable Medicaid beneficiaries are frail older adults and individuals with disabilities. The National Committee is particularly concerned about likely coverage losses in these populations, as well as among many low-income caregivers and nursing home staff.

Repeat Applications and Other Paperwork Requirements

Beginning in January 2027, for beneficiaries between the ages of 18 and 64, OBBBA will require states to conduct eligibility checks for those enrolled in Medicaid expansion coverage every 6 months, instead of every 12 months.  This requirement will inevitably increase the complexity of maintaining Medicaid eligibility and result in beneficiaries needlessly losing their coverage for minor, technical reasons.  For instance, a beneficiary may not receive their renewal notice if it is mailed to an outdated address.  Therefore, CBO projects the increased eligibility checks will result in $63 billion in cost savings.

Other Provisions That Will Contribute to Losses in Medicaid Coverage 

  • Fewer states may decide to offer Medicaid expansion coverage, because OBBBA eliminates an added financial incentive for states to continue or adopt it.
  • OBBBA mandates cost-sharing up to $35 per service for low-income Medicaid expansion adults.
  • Expansion states will also receive lower federal matching rates if they decide to cover immigrants with state-only funds — regardless of immigration status.
  • New requirements added under the Biden Administration for states to streamline Medicaid eligibility and enrollment are delayed until January 1, 2035, thereby reinstating barriers that are expected to particularly impact older adults and people with disabilities.

Long Term Services and Supports

Medicaid funds care for 6 in 10 nursing home residents – meaning 750,000 to 780,000 residents nationwide.  By cutting Medicaid by $1 trillion over the coming decade, states will face pressure to scale back eligibility for LTSS. This could trigger tighter eligibility reviews, lower reimbursements to nursing homes, greater cost burdens shifted to families, and nursing home closures.  States can tighten Medicaid eligibility for nursing home care by lowering income/asset thresholds, enforcing stricter home equity limits (e.g., up to $1 million), and increasing the frequency of renewal checks. They can also impede Medicaid eligibility for nursing home care by increasing “Activities of Daily Living” (ADL) requirements, making it harder for applicants to qualify for coverage. States are exploring this option to manage reduced funding, which includes stricter functional assessments.

Prior to OBBBA, individuals could have Medicaid cover nursing home care and other medical expenses three months before they applied for the program.   Under the new law, Medicaid expansion enrollees would only receive one month of retroactive coverage before applying and traditional participants would receive two months prior to enrollment.  Cutting retroactive nursing home coverage will be a financial hardship to millions of low-income older adults and people with disabilities.

Medicaid Home And Community-Based Services

About 5 million people receive Medicaid home and community-based services (HCBS). Since state Medicaid budgets will be impacted severely by OBBBA, some may sharply curtail or even end HCBS, because it is optional under existing Medicaid law.  This would be a devastating loss for many low-income older adults and individuals with disabilities wishing to remain in their own homes, since HCBS promotes independence by providing personalized support like personal care, homemaker services, and case management, allowing individuals to avoid nursing homes or isolated facilities. HCBS delays institutionalization and lowers formal care costs, with analyses confirming better outcomes at reduced expense compared to institutional care.  A 2021 AARP survey showed that 77 percent of adults 50 and older want to remain in their homes for the long term — a number that has been consistent for more than a decade.

Nursing Home Staffing Standards

OBBBA effectively scrapped the Biden Administration’s nursing home staffing minimum rule by imposing a 10-year moratorium on it.   The rule would have required nursing homes to provide 3.48 total nursing hours per resident day (with specific Registered Nurse and aide breakdowns) and 24/7 onsite RN coverage.  Had it been implemented, the rule had been estimated to save 13,000 lives annually by improving care quality.   The National Committee strongly supports the nursing home staffing standards particularly since many for profit nursing homes have sharply cut nursing staff, which has endangered patients.

NATIONAL COMMITTEE POSITION

The National Committee strongly opposed the OBBBA and supports repealing provisions in the law that will lead to millions of Americans losing their Medicaid health care and long-term care coverage.  Future Medicaid reform must ensure home and community-based care is a required service.  In the meantime, we support writing of the OBBBA implementation rules that will make work requirements and increased applications less burdensome to beneficiaries.

Government Relations and Policy

March 12, 2026