“Big, Beautiful (Reconciliation) Bill” Passes – With Major Medicaid Implications

By now you have likely heard about Congress moving the “One Big Beautiful Bill” over the past few weeks to fulfill President Trump’s desire to sign the legislation into law by the July 4th holiday weekend.

The sweeping budget reconciliation package was indeed finalized last week and signed by the President last Friday. Critics have since called it the largest cut to the social safety net in history, noting that it adds an estimated $2.4-2.8 trillion to the federal deficit by 2034. 

Though celebrated by Republicans for its inclusion of permanent tax cuts and border measures, it also implements massive reductions to Medicaid – up to $1 trillion over the next decade – and introduces new eligibility rules. Additionally, the Congressional Budget Office, or CBO, estimates that the bill could cause approximately 11-12 million Americans to lose Medicaid coverage by 2034, creating an influx of uninsured individuals that surge emergency-room (ER) usage rates and care delays.

Due to its huge size and scope, it’s easy for some of the bill’s broader Medicaid implications to get lost in the shuffle, so let’s review the bill’s key Medicaid provisions and consider how they will impact beneficiaries and providers, as well as the broader political and economic setting.

Starting Dec. 31, 2026, adults aged 19-64 without dependents must complete 80 hours a month of work, volunteering, education, or training to remain Medicaid-eligible, with states having the option to impose stricter work or community engagement requirements if desired.

Also beginning December 2026, eligibility checks, a.k.a. redeterminations, will become more frequent, shifting from annually to every six months for Medicaid expansion enrollees. This may increase administrative burdens and risks fueling “churn,” or unintentional coverage losses.

Meanwhile, the bill introduces mandatory cost-sharing for beneficiaries, requiring individuals with incomes between 100-138 percent of the federal poverty level (FPL) to begin contributing up to $35 per service, effective Oct. 1, 2028. It also reduces by 10 percent the federal matching dollars states receive from the feds for Medicaid expansion benefits for non-U.S. citizens starting in 2028, and requires green-card holders to wait five years before they can gain Medicaid eligibility.

Medicaid providers and health systems will likely face new pressures in rural and safety‑net areas, with rural hospitals being particularly vulnerable. Though the bill allocates over $25 billion over five years for rural hospitals, analysts at the Urban Institute argue that money is insufficient to offset far more billions of dollars in cuts, which are projected at $321 billion in hospital losses and $63 billion in uncompensated care.

Nursing homes and long‑term care facilities are also likely to feel some strain as the bill reduces retroactive Medicaid eligibility from 90 days to 30, limiting reimbursement for long-term care providers, and potentially forcing closures or downsizing at these facilities. The Government Accountability Office (GAO) suggests that nursing-home closures in particular will overload hospitals, increase ER wait times, and potentially result in higher mortality rates.

In addition to impacts on beneficiaries and providers, keep in mind that states must now build databases to meet new Social Security Number (SSN) verification requirements, quarterly cross-state eligibility screens, and death registry checks, adding new layers of complexity, administrative burden, and implementation costs to their Medicaid programs.

The “Big Beautiful Bill” undoubtedly marks a major shift in Medicaid: from expanding administrative oversight of eligibility, to linking benefits to work or service, to tightening access, to cutting provider funding and driving service cuts.

For beneficiaries, it likely means enrollment complications, potential loss of care, and a heavier overall cost burden. According to some lawmakers, however, the bill was needed to save significant costs and gives patients more flexibility in how they spend healthcare dollars by expanding on health savings accounts (HSAs) to reduce medical expenses.

As states ramp up to comply, Medicaid enrollment – and the access it represents – are expected to decline sharply, with consequences rippling through the broader healthcare system.

So, as I say most weeks: stay tuned, because there is much we need to watch as these repercussions unfold.

Reference material

1. The One, Big, Beautiful Bill Empowers American Patients with More Affordable Health Care Choices – Ways and Means
2. Tracking the Medicaid Provisions in the 2025 Reconciliation Bill | KFF
3. Rural Hospital Revenue Could Drop by $87 Billion over 10 Years Because of the Reconciliation Bill and Expiring Enhanced Tax Credits | Urban Institute
4. Medicaid cuts could force hospitals to close across rural America- Fast Company
5. How Trump’s Bill Will Impact Americans’ Healthcare, from Lost Medicaid Coverage to Tightening State Budgets – WSJ
6. What the Big Beautiful Bill means for you, from Medicaid cuts to tax credits – The Washington Post
7. The Budget Bill Could Make Your Local ER a Mess | TIME
8. The Truth About the One Big Beautiful Bill Act’s Cuts to Medicaid and Medicare – Center for American Progress
9. Lee derides Big Beautiful Bill’s Medicaid cuts: ‘People will lose their health care’ • Nevada Current
10. Larry Summers Blasts Donald Trump’s ‘Shameful’ Big Beautiful Bill