There’s Nothing Beautiful About The Upcoming Medicaid Cuts

What you need to know about the reality of the ‘big, beautiful bill’ and what it means for Medicaid.

According to the latest estimates, approximately 71 million Americans rely on Medicaid programs for their health insurance. Seventy-one million people is the equivalent of every person living in the states of Alabama, Arkansas, Louisiana, Mississippi, Kansas, Kentucky, Virginia, West Virginia, North Carolina, South Carolina, Tennessee, and Georgia (with a few million to spare). That’s a lot of people. 

With the changes to Medicaid that will occur due to the bill, 11.8 million of those people will lose their healthcare over the next decade, equivalent to the population of the entire state of Georgia. 

That is a staggering number of human beings, fellow Americans, we are talking about here. Regardless of which political party you belong to, we can all agree that losing basic healthcare coverage is not a position anyone should face. Our elected representatives must do better than this.

While we don’t know the exact details of how this will unfold, we will do our best to break down what we know now about the impacts this bill will have on Medicaid beneficiaries and how you can prepare.

What We Know

The bill reduces federal funding for Medicaid by A LOT.

• The bill is projected to reduce Medicaid spending by nearly $1 trillion over the next ten years, according to the nonpartisan Congressional Budget Office (CBO).
• These cuts to federal Medicaid funding will force states to make difficult choices about their Medicaid programs, potentially leading to reduced provider payment rates, cuts to optional Medicaid services, and tightening their enrollment criteria.
• Some analysts predict that states may see federal Medicaid funding reduced by more than 20%. 

The bill includes new work requirements to qualify for Medicaid. 

• The bill has work requirements for specific "able-bodied" Medicaid recipients, requiring them to work or engage in qualifying activities (like job training or volunteering) for at least 80 hours/month.
• These requirements apply to adults aged 19-64 who are enrolled in Medicaid through the Affordable Care Act (ACA) expansion and who don't have young kids.
• The Senate bill expanded these requirements to include parents of children aged 13 and older.
• Exemptions are available for individuals who are medically unfit to work, students, and caregivers.
• However, health researchers suggest these requirements have minimal impact on employment and could lead to eligible individuals losing coverage due to administrative hurdles. 
  
  • For example, Georgia's state experiment with work requirements showed high costs and low enrollment. 

The bill increases cost-sharing for enrollees.

• States that expanded Medicaid under the ACA will be required to charge enrollees with incomes between 100% and 138% of the poverty level a copay of up to $35 for some services.
• This policy excludes primary care, mental health, and substance abuse treatment.
• States may be allowed to enact higher cost-sharing for non-emergency ER care. 

The bill includes more frequent eligibility checks.

• The bill doubles the frequency of eligibility checks for Medicaid recipients to 2x per year.
• This adds an administrative burden to states and could lead to eligible individuals losing coverage due to paperwork issues. 

The bill reduces provider taxes and associated Medicaid funding for hospitals and other key providers.

• What provider taxes are: States often use the federal money generated through the taxes to pay the institutions more than Medicaid would otherwise pay. (Medicaid generally pays the lowest fees for care, compared with Medicare and private insurance.) The taxes must be "broad-based" and "uniform," meaning they must apply equally to all providers within a specific class, such as hospitals or nursing homes.
• What the bill does: The GOP's plan would curtail a practice, known as provider taxes, that nearly every state has used for decades to increase Medicaid payments to hospitals, nursing homes and other providers and to private managed-care companies How Trump's tax bill will affect Medicaid, ACA plans and hospitals: Shots - Health News: NPR. The House's version of the "One Big Beautiful Bill" freezes provider taxes at their current rates and prevents states from increasing the taxes.
• Why it matters: If there's an economic downturn, if the state wants to expand coverage to a different population in the future, or if the state tax base for whatever reason changes, you can no longer use provider taxes to fill gaps in the system. Rural hospitals typically operate on thin profit margins and rely on Medicaid tax payments to sustain them.
• Financial impact: The bill's restrictions on provider taxes and another strategy called state-directed payments would cut spending by a combined $375 billion, according to the CBO report.
• Rural hospital impact: Researchers said the bill would likely push more than 300 rural hospitals — many in Kentucky, Louisiana, California, and Oklahoma — toward service reductions or total closure. The Senate ultimately decided to include $50 billion to support rural hospitals, in an attempt to address some of these concerns.

The bill restricts funding for certain services.

• The bill cuts off Medicaid funding for entities that provide abortions (except in rare situations like rape and incest), fulfilling a long-standing conservative goal to defund Planned Parenthood. Democrats say defunding the organization would make it harder for millions of patients to get cancer screenings, pap tests, and birth control.
• Bottom line: These changes represent significant shifts in how Medicaid is funded. The provider tax restrictions eliminate a key funding mechanism that states have used for decades to increase payments to healthcare providers, particularly affecting rural hospitals that rely on these funds to remain operational. The reproductive health funding restrictions would cut off Medicaid reimbursements to clinics like Planned Parenthood for all services, not just abortion-related care.

Important Callouts:

• The CBO estimates that the sum of these changes will result in 11.8 million more people becoming uninsured by 2034.
• Experts argue that these cuts will hurt the healthcare system, particularly in rural and underserved areas.
• The impact on individual states will vary depending on their current Medicaid program and the response to the reduced federal funding. 

These cuts will severely impact many people, with rural America being hit the hardest. There are 760 hospitals projected to close within 1-2 years of the bill’s passage due to funding cuts, with 6 in Nebraska alone, according to Nebraska Public Media. This means that seeking emergency care becomes impossible for people in those areas, and so many others, resulting in tragic and completely avoidable consequences. In the US in 2025, this scenario seems unfathomable, yet it is entirely accurate.