The 2025 Budget Reconciliation Act, commonly referred to as the One Big Beautiful Bill Act (OBBBA), was signed into law this summer, and it has a sweeping impact on Medicaid eligibility. The bill introduces stricter eligibility rules, more frequent coverage redeterminations and greater financial responsibility for states.
Medicaid coverage rules and requirements can seem complicated, so it’s important to break down how these changes will impact the healthcare system as a whole, as well as how they’ll impact individuals.
[READ: What Is Medicare-Medicaid Dual Eligibility?]
What Is the Impact of Medicaid Changes?
In her early twenties, Jillian Berch, 45, lost her health insurance at the same time her life was unraveling. She was struggling with substance use, no longer covered under her parents’ plan and dependent on Medicaid for treatment that ultimately helped save her life.
Looking back now, as new Medicaid work requirements approach, she wonders how she would have survived under the rules states are preparing to implement. With new legislative changes, many Medicaid enrollees will soon have to document at least 80 hours a month of work, school or volunteering to keep their coverage. But for people in active addiction or early recovery, Berch says, survival itself can be a full-time job.
If you need Medicaid to get treatment, go to rehab or stay in recovery, she says, where are you supposed to find those 80 hours? For someone navigating medication-assisted treatment or trying to access therapy, she explains, adding new reporting requirements risks stripping away the very safety net meant to make recovery possible.
Her story has a hopeful arc: Berch eventually transitioned out of the Medicaid system and today works at the University of Virginia in Charlottesville, while earning a Master of Public Health degree at Dartmouth. Her experience shows that with the right support, recovery and growth are possible; but success depends heavily on access to care in critical moments.
The stakes are similarly high for families caring for children or adults with disabilities. Melanie Gainer, whose daughter Kaycee, 22, was diagnosed with severe autism at 2½, says Medicaid has been “paramount” in providing the therapy, medication and support her daughter needed to make progress. Without it, Gainer believes Kaycee would not have reached her current level of independence.
“It’s frightening just because without it, I firmly believe that she wouldn’t be where she is today,” she says. “There would be a regression.”
Both experiences underscore broader concerns raised by advocates and policy experts: Medicaid’s coming changes won’t just reshape eligibility rules on paper — they could determine who gets care, who falls through the cracks and how already-fragile health systems absorb the fallout.
[Read: Medicare vs. Medicaid: Key Differences, Eligibility & Coverage]
How Medicaid Works
Medicaid, the joint federal-state health insurance program for low-income individuals regardless of age, covers just over 70 million people across the United States. While the program operates under broad federal guidelines, states play a central role in shaping Medicaid: They set eligibility rules and determine which services are covered and administer the program day to day. The federal government then reimburses a share of each state’s Medicaid spending.
What exactly does that mean in practice? Medicaid works by reimbursing hospitals, doctors and other providers for care delivered to eligible patients using a combination of federal and state funds.
When certain populations lose Medicaid eligibility, hospitals and providers can no longer bill the program for their care. Hospitals may still treat these patients — particularly for emergency services, as required by law — but those costs either go unpaid or, in some cases, are absorbed through a mix of state and local funding, charity organizations or hospital operating budgets.
[READ: What Is the Medicaid Spend Down? Everything You Need to Know]
Why Medicaid Is Changing Now
When the 2025 Budget Reconciliation Act (One Big Beautiful Bill Act, or OBBBA) was signed into law this summer, the sweeping piece of legislation included several provisions that will significantly reshape Medicaid in the years ahead. The law introduces stricter eligibility rules, more frequent coverage redeterminations and greater financial responsibility for states. While many of the Medicaid provisions don’t take effect until late 2026 or 2027 and beyond, states are already preparing for changes and feeling the effects of the law’s requirements and timelines.
Experts warn the changes are likely to widen coverage gaps, particularly for noncitizens and low-income adults. The Congressional Budget Office estimates that 7.8 million Americans will lose coverage by 2034 as a result of OBBBA’s Medicaid provisions alone; overall, the CBO projects that the total number of uninsured people will rise by 16 million by then.
Here’s what you should know about the most significant Medicaid changes, why their impact extends beyond Medicaid beneficiaries and how families can prepare for what’s ahead.
3 Key Medicaid Eligibility Changes to Know About
1. Medicaid work and reporting requirements
One of the most consequential changes is the return of Medicaid work and reporting requirements, referred to in the law as “community engagement” requirements. Under OBBBA, states must implement these requirements no later than early 2027, though they can opt to adopt them earlier. Affected adults would need to demonstrate each month that they’re spending at least 80 hours per month of work, school or volunteer activity to retain coverage.
Proponents argue the requirements encourage employment and prevent misuse of public benefits. Critics, however, say a major barrier is the administrative burden of reporting hours and navigating complex exemptions.
“The work requirements don’t go into effect until 2027, but states are already getting prepared because it’s a huge administrative burden to put reporting requirements into place,” says Kim Musheno, senior director of Medicaid policy for The Arc of the United States, a nationwide nonprofit that advocates for people with intellectual and developmental disabilities.
And although some groups are formally exempt — such as people with intellectual disabilities — advocates fear many will still lose coverage in practice.
Musheno warns that, for example, people with chronic illnesses, autism, mild intellectual disabilities, complex needs or multiple types of disabilities that make working difficult can often fall through the cracks. “And frankly, even discrimination against people with disabilities prevents people from getting full-time jobs or jobs that provide health insurance.”
2. More frequent Medicaid eligibility determinations
The law also increases how often states are required to reevaluate Medicaid eligibility for certain groups.
Right now, states must conduct eligibility determinations once every 12 months; under OBBBA, states will need to review determinations every six months for Medicaid expansion adults — which is generally low-income adults without disabilities who qualify for Medicaid under the Affordable Care Act expansion. This kicks in for renewals on or after December 31, 2026.
Proponents say the change strengthens program integrity. Experts, however, warn it is likely to lead to more “churn” — when people lose coverage due to paperwork issues or missed deadlines, and not necessarily because they are no longer eligible.
3. Tightening immigrant eligibility restrictions
The law also will further restrict Medicaid eligibility for some lawfully present immigrant populations, reducing access to coverage for groups that already face barriers to care — a change that might sound narrow but carries broad consequences.
When immigrants lose access to Medicaid, they don’t stop needing care. Instead, they’re more likely to delay treatment, skip preventive care and rely on emergency rooms when health problems become severe. Those visits are far more expensive and are often uncompensated, shifting costs to hospitals, states and, ultimately, other patients.
Berch, who spent more than a decade on Medicaid, recalls being told she didn’t qualify for coverage when she was pregnant in the early 2000s because she wasn’t yet a U.S. citizen. She later learned she could qualify only by proving she had paid into the system through years of work — documentation she didn’t even know she needed.
Experiences like hers highlight how eligibility restrictions and administrative hurdles can delay care at critical moments, even for people who are lawfully present and contributing to the system.
Ultimately, Medicaid doesn’t just determine who has coverage; it shapes how hospitals operate, how states budget and whether entire communities can access care.
How Medicaid Cuts Affect Beneficiaries
Similarly, for many families, Medicaid isn’t just health insurance — it’s the backbone of daily life, especially for people with disabilities, older adults and those managing chronic or behavioral health conditions.
Children with disabilities often receive critical therapies through Medicaid-funded, school-based services and individualized education programs. But those supports frequently disappear after high school.
“That’s why they talk about a ‘cliff’ after a child graduates from high school,” Musheno says. After graduation, “the bus stops coming.”
Families must then apply for adult programs in hopes their family member can access services again. Those adult services often come through home- and community-based services, which are optional Medicaid benefits that allow people who may otherwise require institutional-level care to remain at home. States provide these services through Medicaid waiver programs.
HCBS can include:
— Supported employment
— Behavioral health supports
— Respite care for family caregivers
After Kaycee aged out of school-based services, Medicaid waivers where they live in West Virginia provided adult services tailored to her needs, including therapy visits and support for daily living skills. “Disability doesn’t go away,” Gainer emphasizes. “If cuts and changes are to occur that impact what’s already in place, it’s going to be devastating for all individuals who are being supported through Medicaid programs.”
Families often rely on Medicaid not as temporary assistance, but as a lifelong support system, Musheno notes — making coverage losses particularly destabilizing.
“Now, this whole system is threatened because this is a historic cut — almost a trillion dollars — and any cut of that magnitude is going to have cascading effects,” she explains.
Berch emphasizes another challenge: public perception. People hear the word Medicaid and think, “That’s not me,” she says. But they don’t realize how closely it’s tied to substance use, disability or unstable work — issues that touch almost every family in some way.
For people with substance use disorders, Medicaid can be the difference between access to treatment and medical crisis. Losing coverage doesn’t just interrupt care; it can force people into withdrawal or cut off access to medication-assisted treatment, increasing the risk of relapse and overdose.
Medicaid cuts impact service-sector workers
Berch also points to workers in industries that don’t offer health benefits, like restaurants, retail and other service-sector jobs. These workers may meet work requirements but still rely on Medicaid or marketplace coverage because employer-sponsored insurance isn’t available or affordable. There are people working full time, making decent money and still uninsured, she says. Medicaid fills that gap — and when it’s taken away, people don’t magically have other affordable options.
Advocates warn these changes risk destabilizing care for people who are already navigating disability, aging, recovery or uncertain work, turning Medicaid from a safety net into a moving target when people need it most.
Regional Impacts of Medicaid Cuts
Medicaid services have always varied by state, but advocates say OBBBA will widen those differences even further.
“It really matters where you live,” says Karen Fortuna, an assistant professor at Dartmouth in the Department of Community and Family Medicine and the Dartmouth Institute for Health Policy and Clinical Practice in New Hampshire.
As federal funding declines, states will have more discretion — and more pressure — to decide how quickly and aggressively to implement these changes. Some may move rapidly; others may take a more gradual approach.
“A state like New Hampshire, where it’s ‘live free or die,’ may do a very fast rollout that could impact the lives of individuals,” Fortuna says, adding that other places like Massachusetts or Washington, D.C., may take a more systematic approach.
When federal funding is cut, Fortuna adds, states often rely on outside organizations to fill those gaps.
“You’ve seen this over and over again if you look at health policy or social policy throughout time,” Fortuna says. “You really have the birth of social welfare in the United States as these cuts happen.”
In Mississippi, for example, Fortuna says churches often play a central role in providing social support. National organizations and philanthropic foundations like the Gates Foundation may also step in, but coverage varies widely.
The result? A patchwork system, where health care access depends heavily on geography.
How Medicaid Changes Affect Everyone
The effects of Medicaid cuts don’t stop with beneficiaries. They ripple through state budgets, health care systems, local economies and more.
1. Greater cost burden on states
“This is going to shift so much financial burden to the states,” Fortuna says.
States must balance their budgets. As federal Medicaid funding declines, they may consider options including:
— Raise taxes
— Cut eligibility
— Reduce services or provider payments
Musheno worries that optional services, such as supported employment, respite care and vision and dental care, will be the first to go.
She points to her own family. Her brother-in-law, Bill, who has autism and intellectual and developmental disabilities, lives in a group home in Maryland and receives supported employment through Medicaid.
If states have to make cuts, those supports are at risk, Musheno says. And that affects people’s ability to work, live independently and participate in their communities.
2. Increased strain on hospitals and providers
Many hospitals and providers are likely to feel the impact quickly.
“The greatest impact is going to be on those places that are already financially stressed,” Fortuna says.
That could include:
— Rural areas
— Safety-net hospital systems
— Facilities with a high share of Medicaid patients
When hospitals close departments or shut down entirely, the effects extend beyond Medicaid beneficiaries: Entire patient populations in the region they serve are impacted.
Behavioral health services are often cut first, Fortuna adds. “We’ve seen that consistently over time.”
Consolidation into larger systems can mean longer wait times, longer travel times and fewer local services for everyone.
3. Rising health care costs for everyone
As states and health systems absorb more uncompensated care, costs are likely to rise across the board.
Even people who aren’t on Medicaid are going to feel this, Fortuna says.
States may raise taxes, hospitals facing workforce shortages may increase prices, and because OBBBA didn’t extend ACA premium tax credits, marketplace premiums are also expected to skyrocket.
“The whole system is really interconnected,” Fortuna explains. And when people can’t afford care, they delay it — and that ultimately costs more.
4. Workforce disruptions and new roles
Some changes could create opportunities for more accessible roles, as Fortuna notes that health systems may invest heavily in new types of workers.
“You’re actually going to have opportunities in the workforce for people with high school degrees as their terminal degree to enter this workforce and they’re paid at a reasonable rate,” Fortuna says.
That could include:
— Community health workers
— Peer support specialists
— Doulas
“We’re even seeing AI agents being integrated into this work,” she adds.
This is adding to more investment in “task shifting” — a strategy in health care where tasks usually handled by highly trained clinicians are shifted to other health workers. This is an effort to tackle staffing shortages and improve access to care.
The challenge, Fortuna says, is ensuring quality. “How do you make sure that workforce has the same level of fidelity to delivering an intervention as it should be delivered when you have a high school education, and normally a PhD or an MD is providing that care?”
What Medicaid Enrollees Can Do Now
While many changes to Medicaid won’t take effect until late 2026 or after, preparation matters.
Medicaid enrollees and families can:
— Watch for renewal notices and respond promptly
— Update contact information with your state Medicaid agency
— Document work hours or exemptions if subject to new reporting requirements
— Connect with advocacy organizations for help navigating changes
— Contact state or local Medicaid resources for assistance and questions
For people like Jillian Berch and Melanie Gainer’s daughter Kaycee, Medicaid is much more than insurance. It’s a lifeline and a foundation for quality of life. As policy changes take effect, the stakes are high: Coverage gaps could mean interrupted treatment, delayed care and added stress for millions who rely on the program. Preparing now, and understanding how your state is navigating policy changes, gives Medicaid enrollees the best chance to stay connected to the care and support they need.
More from U.S. News
Hospital Bag Checklist for Mom and Baby: What to Pack for Labor & Delivery
13 Signs and Symptoms of a Medical Emergency
8 Questions to Ask a Geriatrician at Your First Appointment
What?s Changing with Medicaid Eligibility and How It Could Affect Your Care originally appeared on usnews.com
