As we inch closer to the January 2027 implementation of the Medicaid provisions in H.R.1—the Administration’s “Big Beautiful Bill” law signed in July—we continue to track the anticipated toll on communities across the country. Let’s break down what’s going on, who is hurt by this, and who benefits:
Lay of the land: H.R.1 limits how states can fund their Medicaid programs, which will exacerbate many states’ existing budget deficits. States are preparing for major budget shortfalls as much as $450 million per state this year—and an estimated $664 billion nationwide over the next 10 years. All states will be making decisions about how and where to make cuts to balance their budgets.
H.R. 1 also mandates that Medicaid expansion states add new work reporting requirements to their Medicaid programs and redetermine eligibility at least every 6 months (twice as often as current practice) for their single adult population.
Despite this, some states are hoping to enact stricter provisions than required in the federal law, and others are racing to implement work requirements months before the January 1, 2027 deadline like Nebraska on May 1, Montana and Arkansas on July 1, and Iowa on December 1.
NHCHC Resource:
Where we are now—and where we are going: Over the past decade, one thing has been clear: Medicaid expansion dramatically increased coverage for people experiencing homelessness - dropping the uninsured rate to an average of 20% in expansion states. This has allowed unhoused individuals to access comprehensive health care services (including hospital/specialty care, primary care, behavioral health services, etc.) and manage chronic conditions, which help people regain stability and escape cycles of homelessness.
Now that progress is at risk. We anticipate the new Medicaid policies will reverse nearly all the progress made through Medicaid expansion, with 10 million people expected to roll off Medicaid, likely pushing uninsured rates among unhoused patients back up to pre‑expansion levels. Coverage losses will be made worse due to complicated administrative hurdles, aging Medicaid systems, and staffing shortages in Medicaid call centers.
Who gets hurt? Medicaid cuts risk harming individuals in two ways: the loss of individual health insurance and/or the loss of services due to cuts to the broader health system.
For individuals, more frequent redeterminations and work reporting requirements will create barriers to maintaining coverage – even for people who should qualify for exemptions (see green box below).
Exemptions:
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But the harm extends beyond just an individual’s ability to comply. State Medicaid eligibility systems are not currently equipped to accurately capture the data needed to grant exemptions, meaning eligible populations may lose coverage because of system failures. States will also likely experience budget cuts, forcing them to cut back non-mandatory services that many people depend on. As a result, even those who remain eligible and covered by Medicaid may experience reduced access to care and longer wait times.
The combination of impacts will disproportionately harm populations that already face barriers to care:
- Poor people, especially those experiencing homelessness: Medicaid coverage losses will reduce individual access to health care and support services at the same time additional cuts to HUD rental assistance and more laws criminalizing homelessness are expected to worsen homelessness across the country.
- People with disabilities: While supposedly exempt from the requirements, adults with disabilities already struggle to access care, with waitlists for some services up to seven years long in some states. Cuts to Medicaid’s home and community-based services could worsen these delays as states scale back services.
- People with behavioral health conditions: Also supposedly exempt from the requirements, state budget cuts will threaten critical services, including behavioral health care. Medicaid is the primary payor for most behavioral health care—these cuts will likely trigger relapses as people lose coverage. In Idaho, four people died before the state reversed prior cuts.
- Families: Parents and caregivers, many of whom should be exempt, may lose coverage due to paperwork burdens and system complexities, putting strain on households and children.
- People of color: Due to long-standing economic barriers, people of color are more likely to depend on Medicaid. Hence, these cuts disproportionately impact Black and Brown communities by increasing health disparities and threatening the stability of hospitals that communities of color depend on.
- Immigrants: Many immigrants who previously qualified for Medicaid (asylees, refugees, and parolees) will completely lose coverage beginning on October 1, 2026 due to H.R. 1’s changes to eligibility, although enrollment has already begun dropping due to aggressive immigration enforcement.
- Health care providers: Community health centers across the country are bracing to cut staff and services and hundreds of hospitals, especially in rural areas, are at risk of closing their doors. While Republican lawmakers continue to cite the $50 billion Rural Health Transformation Fund as a solution to the $1 billion in Medicaid cuts, rural health care is expected to suffer and is already bracing for service cuts.
NHCHC Resource:
So, who benefits?
- IT contractors: Contractors like Deloitte, Accenture, and Optum will receive MILLIONS of dollars to help states build new eligibility and compliance systems that will kick people out of care. The money will pay for systems proven to be error-riddled that will make it even harder for people to comply with the new provisions and result in more unnecessary coverage loss.
- Proponents of criminalization and forced hospitalizations: Cuts to Medicaid reduce access to care and destabilize people in ways that make them more vulnerable to arrest (e.g., unsheltered homelessness, relapse from recovery, etc.). Some conservative interest groups will push for punitive approaches to homelessness, shifting away from addressing causes of homelessness—like poor health—towards criminalization and forced treatment.
- Politicians who prioritized budget cuts over coverage: Lawmakers who passed Medicaid cuts into law through H.R. 1 can argue they saved costs, while really shifting cost burdens onto states, hospitals and local communities as they struggle to navigate the increases in uncompensated care.
What’s the solution? The harms are real and we need to face them head on. Our communities need to hear from us, and so do our lawmakers.
- Engage your state lawmakers: There’s still time to influence the details of how states implement these changes! Everyone needs to reach out to their state lawmakers to raise concerns about Medicaid coverage loss.
- Call or email your policymakers: Contact your state representatives, Medicaid directors, and Governor’s office to share our strategies for mitigating harm. Find your lawmakers’ contact information here.
- Explain how patients and your program will be impacted. Share firsthand stories of impact, data, and expertise from health care providers.
- Get involved. Find out if your state has an HR1 working group or task force and if you can attend meetings or get on an email listserv for updates.
- Spread awareness: It’s okay to not have all the answers right now, just start the conversation.
- Among colleagues: Make sure everyone is aware of the cuts that are coming, how it impacts your work, and what it means for patient care. Share our resources and forward this blog to them.
- With clients/patients: Prepare your providers and frontline teams on how to communicate these changes to patients and clients - answering questions where they can and being honest about what’s unknown. Clients and patients may need to take action to stay covered.
- Start planning now: Do not wait until January to determine how these changes will impact your patient population and your program. Develop internal strategies now for how your organization will respond and adapt to these cuts.
- Create an internal team to help plan for various scenarios. Determine how funding losses might impact your budget, staffing, and services. Think through how many of your patients are Medicaid expansion beneficiaries, how much revenue you get from Medicaid, and where funding gaps may have the biggest impact.
- Develop guidance that can be shared with staff and clients. This includes talking points for staff and flyers that can be provided to patients. Post signage around your clinic telling patients to ask for more information.
- Support good policy: Advocate for policies that will expand access to care, including ‘Medicare for All,’ ‘Medicare by Choice’ and ‘Make Billionaires Pay Their Fair Share Act.’
