50-State Medicaid Coverage and Expenditure Impacts of the Senate Version of the One Big Beautiful Bill Act

Authors: Jocelyn Guyer, Patti Boozang, Avi Herring and Michelle Savuto
Editor: Amanda Eisenberg

Click here to subscribe to receive more content like this!
Help shape The 80 Million: What should we write about next?

tl;dr

• The Senate continues to advance its version of the One Big Beautiful Bill Act (OBBBA), engaging in floor debate tonight to take a final vote on Monday, June 30^th.

• New, updated state-by-state modeling of key Medicaid provisions in the House and Senate bills prepared by Manatt Health shows that the Senate bill increases the size of the already-astronomical Medicaid cuts in the House bill to more than $1.2 trillion over the next 10 years among the 50 states (including the District of Columbia (D.C.) but excluding Tennessee due to data limitations). 

• For expansion states overall, the Senate bill increases the size of their cuts by 10% over the already large cuts in H.R.1. Ten expansion states would see the size of their Medicaid expenditure reductions jump by 20% or more in the Senate bill as compared to H.R.1.

• While non-expansion states will still face unprecedented cuts, the 9 non-expansion states included in Manatt’s model would see the size of their cuts drop by 6% under the Senate bill.

• Medicaid coverage losses are estimated at 8.7 million fewer people enrolled in Medicaid under the House and Senate Medicaid provisions of OBBBA that Manatt has modeled.

The 80 Million Impact

On June 27th, the Senate Budget Committee (SBC) released its version of the One Big Beautiful Bill Act (OBBBA) and on Saturday, June 28^th, the Senate approved a motion to proceed on debate over the Senate bill language. The Senate version of OBBBA, which may still undergo further revisions through the amendment process, is expected to come up for a final vote in the Senate as early as Monday, June 30th. Like H.R.1, the House version of OBBBA, the state-by-state estimates of the Senate bill indicate that states would experience substantial Medicaid cuts and coverage losses over the next 10 years (see our June 23 and June 9 blog posts for more information on previous versions of the bill).

Using its Medicaid Financing model, Manatt Health (Manatt) has prepared new 50-state estimates (including D.C. but excluding Tennessee due to data limitations) on the impact of the Medicaid provisions included in the Senate version of the OBBBA. Based on these estimates:

• Total Medicaid expenditure cuts – considering federal and state funds – will reach over $1.2 trillion over the ten–year period from federal fiscal year (FFY) 2025 through FFY 2034.

• The Senate cuts Medicaid by $100 billion more than H.R.1 reflecting new restrictions on the use of provider taxes in expansion states and on state directed payments (SDPs).

• The Senate imposes steeper cuts on the 41 expansion states (including D.C.) than H.R.1 while offering some modest relief to non-expansion states.

  • Among expansion states, the Senate bill increases the size of cuts by 10% largely due to the provision that reduces the size of their allowable provider taxes from 6% of net patient revenue to 3.5% over time.

  • In contrast, the nine states that have not expanded Medicaid included in Manatt’s model would see the size of their cuts drop by 6%. While the non-expansion states still face unprecedented cuts under the Senate version of OBBBA, they fare slightly better than in H.R.1 because they retain flexibility to allow their existing provider taxes to increase over time with healthcare costs.

• The differential treatment of expansion and non-expansion states in the Senate version of OBBBA results in dramatic swings in the size of cuts faced by a number of individual states.

  • Ten states experience an increase of 20% or more in the size of their cuts under Senate bill language as compared to H.R.1, including Rhode Island (21%), Michigan (22%), Hawaii (24%), Oregon (25%), Missouri (27%), Kentucky (28%), Massachusetts (30%), Virginia (37%), New Hampshire (66%), and Vermont (102%).

  • In contrast, several states would see the size of their cuts drop by 10% or more, such as South Carolina (44%), Maine (17%), Wisconsin (17%), and Mississippi (15%).

• Major losses in coverage. Medicaid coverage losses are estimated at 8.7 million fewer people being enrolled in Medicaid under the House and Senate Medicaid provisions of OBBBA. That translates into one in ten current enrollees in the Medicaid program nationwide.

  • Because the bill disproportionately targets the 41 states including D.C. that have expanded Medicaid under the Affordable Care Act (ACA), the coverage losses are expected to disproportionately impact expansion states (8 million or 12% of total baseline enrollment in expansion states) versus non-expansion states (655,000 or 4% of total baseline enrollment in non-expansion states).

  • In some states such as Nevada, Louisiana, and Oregon, enrollment reductions would reach 15% or more.

Table 1, available for download here includes state-level enrollment and expenditure impacts for the House and Senate versions of the OBBBA.

The Bottom Line

As we have covered extensively in recent weeks, H.R.1 lays down a web of structural changes to Medicaid that would drive deep cuts to program funding and coverage over the next 10 years, unprecedented in the program’s history. The Senate version of the bill cuts deeper, as confirmed by Manatt’s modeling and CBO’s preliminary estimates. In short, the House bill is bad for Medicaid; the Senate bill is even worse.

Notes on OBBBA Provisions Modeled by Manatt

As in prior estimates, Manatt’s Medicaid Financing model estimates shown in Table 1 reflect most of the key Medicaid provisions included in budget reconciliation language, including the impact of work requirements, six-month renewals, new restrictions on provider taxes and state-directed payments (SDPs) for hospitals, and repeal of certain Medicaid eligibility simplifications. Notably, Manatt’s estimates only reflect the impact of changes to provider taxes and SDPs for hospitals (not other providers, which will also be impacted). Additionally, our model does not address changes to standards designed to ensure that provider taxes are “generally redistributive.” In the past, Manatt has shown the expected impact of the modeled provisions as a range, based on potential variation in how work requirements are implemented. For the Senate bill language estimates reflected in Table 1, Manatt has assumed the mid-point of this range.

Help shape The 80 Million: What should we write about next?