The new bill, known as the One Big Beautiful Bill Act (OBBB), signed into law on July 4, 2025, includes significant cuts to Medicaid totaling nearly $1 trillion over the next 10 years. Here are the key Medicaid cuts and changes in the bill:
- Medicaid spending is cut by about 15%, amounting to nearly $1 trillion over 10 years, which may lead to approximately 11.8 million Americans losing their health insurance.
- The bill imposes new work, volunteer, or schooling requirements on some Medicaid recipients, starting around 2027.
- It lowers the rate at which states can levy provider taxes used to boost Medicaid funding, reducing reimbursement rates to hospitals and other healthcare providers.
- There are provisions that make Medicaid harder to qualify for, enroll in, and keep, including increased cost sharing for enrollees.
- The bill restricts state financing options and limits state payments to hospitals, nursing facilities, and other providers.
- Cutting enrollment and benefits are the primary methods by which the federal government achieves savings in Medicaid under this bill.
- The cuts will affect states unevenly, with some states like Louisiana, Illinois, Nevada, and Oregon facing cuts exceeding 19% over 10 years.
- The Medicaid cuts are also backloaded, with most reductions occurring between 2030 and 2034.
- Combined effects with other provisions in the bill will result in a rise of uninsured people by an estimated 17 million by 2034.
- The bill also includes reductions to related programs such as CHIP and creates hurdles for individuals to maintain their Medicaid coverage.
These cuts represent one of the largest and most regressive reductions to federal health benefits in U.S. history, deeply impacting low-income populations, children, pregnant women, and individuals with disabilities who rely on Medicaid for healthcare coverage. Hospitals, especially in rural areas, face significant funding gaps that may lead to service cuts or delayed projects, affecting pediatric and obstetric care availability in some areas. Overall, the Medicaid cuts in the new bill fundamentally reduce federal spending on Medicaid by cutting enrollment, increasing work requirements, reducing state financing flexibility, and lowering provider payments, which will likely increase the number of uninsured and strain healthcare providers nationwide.
