By Jane Gould
A BRIEF SUMMARY OF MEDICAID CHANGES UNDER THE REPUBLICAN BIG UGLY BILL
Medicaid has been an important source of health coverage for roughly 2 in 5 children, 1 in 6
non-elderly adults, almost 1 in 6 adults 65 or older, and 2 in 5 non-elderly adults with
disabilities.
As of January 2025, over 70 million low-income people in the U.S. got their health coverage
through Medicaid. Anyone who met its eligibility rules had the right to enroll, and states were
guaranteed federal financial support for partial costs of their Medicaid programs. This will
change under the Republicans’ massive spending and tax bill, also known as the Big Ugly Bill.
How will this new bill effect Medicaid?
According to the Congressional Budget Office this bill will cause roughly 17 million people to
lose health coverage and become uninsured by 2034. These people could lose access to
preventative and primary care, care for life-threatening conditions, and ongoing treatment for
chronic illness.
Outcomes
- 11.8 million people will become uninsured due to cuts in federal spending to Medicaid and Affordable Care Act (ACA) subsidies
- 4.2 million people will not be able to afford coverage because their insurance premium credit will expire, raising their costs.
- Additional marketplace legislation will cause almost 1 million more people to lose their coverage.
- Coverage losses will result in higher out-of-pocket costs and more medical debt. As families struggle to keep up with health costs, they might need to forgo prescriptions and appointments and possibly face evictions.
- Many of the Medicaid cuts could cause rural hospitals to close due to insufficient funding.
What can Medicaid holders expect?
Medicaid’s purpose is to provide health coverage to those who cannot afford it. The deep cuts will lead to loss of benefits, higher costs, and closures to rural hospitals.
- Work requirements: With few exceptions, the new law imposes a work requirement that counteracts the goals of Medicaid, taking coverage away from many of the people who need it most: low-wage workers without job-based coverage, people between jobs, and people who can’t work because of a disability or chronic health problem. It doesnothing to promote employment. Instead, it requires people to submit new paperwork proving their eligibility or employment, causing both enrollees and administrators to get caught up in red tape and paperwork errors.
- Caps on provider taxes: A new cap on Medicaid provider taxes could force states to slash Medicaid payment rates for health care providers—which, in turn, may force some providers to close. One study found more than 300 rural hospitals could cut back on the care they offer or close entirely due to this bill.
- Ending tax credits: Tax credits make it easier for families to afford insurance. Without them, the cost of a health care plan will be higher.
- Increasing out-of-pocket costs: Out-of-pocket costs will increase up to $35 per service for adults with Medicaid coverage if their incomes are between 100 – 138% of the federal poverty level, with narrow exceptions.
- Barring Medicaid payments to Planned Parenthood: This one-year ban could lead to the closure of almost 200 health centers across 24 states, jeopardizing access to care for more than 1.1 million patients: 4-in-10 Medicaid recipients have received care from Planned Parenthood.
- Exclusions of many: The bill excludes refugees, asylees, human trafficking and domestic violence victims, and other non-exempt immigrants from Medicaid, Medicare, the Children’s Health Insurance Program (CHIP), and SNAP.
When will these policies take effect?
Many of the laws in this bill will go into effect either immediately before or after important
elections.
| Ending advanced premium tax credits | December 31, 2025 |
| Ending subsidies from the American Rescue Plan Act (ARPA) and Inflation Reduction Act (IRA) | December 31, 2025 |
| Imposing work-reporting requirements of people with Medicaid coverage | January 1, 2027 (states can seek waiver to begin sooner) After midterms |
| Capping provider taxes that states use to finance Medicaid programs | October 1, 2027 (cap begins lowering) through October 1, 2031 (cap hits 3.5%) After midterms |
| Increasing out-of-pocket costs for adults with Medicaid | October 1, 2028 Shortly before presidential election |
Info from:
https://www.progressivecaucuscenter.org/unrig-the-rules/2025-07-01
https://www.cbpp.org/research/health/introduction-to-medicaid
https://www.americanprogress.org/article/the-truth-about-the-one-big-beautiful-bill-acts-cuts-
to-medicaid-and-medicare/
