The “One Big Beautiful Bill Act”: Understanding effects on providers and healthcare coverage
After passing the House and Senate along party lines, the reconciliation legislation known as the One Big Beautiful Bill Act (OBBB) (H.R. 1 / P.L. 119-21) was signed into law by President Trump on July 4, 2025. Intended to offset the costs of extensions on expiring tax cuts, the bill made sweeping reductions across the federal government and particularly impacted health care via policy changes to Medicaid and Affordable Care Act (ACA) coverage.
The nonpartisan Congressional Budget Office (CBO) estimates 10 million people will lose insurance coverage as a result of OBBB by 2034, with a further 5.1 million people losing coverage based on other recent policy changes to the ACA. Work requirements, coverage eligibility changes, provider taxes, and coverage limits for certain immigrant statuses are the core provisions expected to impact patients and providers.
States and providers are expected to see an increased administrative burden and higher technology costs for documenting eligibility and for doing so on a more frequent basis. Providers should also anticipate a rise in uncompensated care for newly uninsured patients, particularly through increased reliance on hospital emergency departments and through loss of preventative care interventions.
Retroactive Coverage: Presumed eligibility for low-income populations is reduced to 30 days in Medicaid expansion states and 60 in non-expansion.
Coverage Eliminations: Medicaid eligibility is eliminated for refugees, asylum grantees, immigrants under parole, and certain victims of human trafficking.
Work Requirements: Expansion enrollees must work 80 hours per month or be enrolled in an educational program or community service. There are exceptions for those with substance use disorders or a “disabling mental illness” with that term yet to be defined.
Rural Health Transformation Fund: $50 billion dollars is allocated to improve health access for rural populations and to support rural providers. CCBHCs, OTPs, and CMHCs are eligible for this funding.
Provider Taxes: States cannot establish new or increase provider taxes.
Although OBBB has clear timeline directives for these health care measures, there is an assumption states will seek waivers for delayed implementation given most state health authorities do not currently have adequate personnel for implementing these changes. The current timelines are as follows:
Provider Taxes
Now: Effective upon bill passage and states have three years to transition
Rural Health Transformation Fund
Now: Funding Available for Fiscal Year 2026
Coverage Eliminations on Immigration
October 1, 2026: Medicaid eligibility eliminated for certain “qualified aliens”
Retroactive Coverage
December 31, 2026: Presumed eligibility periods decrease (30 days / 60 days)
Medicaid Fraud Prevention
January 1, 2026: Notice of Proposed Rulemaking (NPRM) issued for work requirements
January 1, 2027: Work requirements go into effect
January 1, 2027: States required to verify enrollee addresses and SSN every 6 mo.
January 1, 2028: States required to start quarterly checks for disenrolling deceased
October 1, 2029: States required to prevent enrollment in multiple state plans