The House One Big Beautiful Bill Act: Re-running the National and 50-State Impacts

Editors: Kaylee O’Connor and Amanda Eisenberg
Authors: Patti Boozang and Jocelyn Guyer

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tl;dr

• The House budget bill, dubbed the "One Big Beautiful Bill Act," proposes unprecedented Medicaid cuts that the Congressional Budget Office (CBO) estimates will cut federal Medicaid spending over 10 years by $715 billion and result in 7.6 million people losing coverage if implemented as proposed.

• Key provisions include mandatory work requirements for Medicaid expansion adults starting January 2029 (and perhaps as early as 2027), stricter eligibility redeterminations every six months starting October 2027, and new measures include banning new or increased provider taxes and SDPs.

• This is another inflection point in the reconciliation process, requiring all interested parties to double-down on understanding the twist and turns of the reconciliation process given the extraordinary stakes for Medicaid beneficiaries, states, hospitals, other providers.

The 80 Million Impact

The House budget reconciliation process is steadily advancing precedent-setting cuts to the Medicaid program in the package. On Mother’s Day, May 11, the House Energy and Commerce (E&C) Committee released its budget reconciliation legislation, providing the first detail on the proposals designed to cut as much as $880 billion in federal funding from the Medicaid program, and voted the bill out of committee on after a marathon markup that began on May 13 and ran through the night. On Sunday, May 18 at 10 p.m., the House Budget Committee reconvened to combine the E&C and other reconciliation proposals into a single reconciliation bill, called the One Big Beautiful Bill Act, and voted to advance the legislation in a party line vote of 17-16. Four House Freedom Caucus members on the budget committee voted “present,” stating that their votes “signal the need for further negotiations” before members of the caucus will support the bill. While initially missed by many — the bill reported out of the House Budget Committee included several significant modifications to the E&C proposals.

On May 20, the Congressional Budget Office (CBO) released a preliminary estimate of the House Bill, including impacts on federal Medicaid funding. But, aside from a cursory footnote in its comprehensive analysis of the House Bill and various emails and charts shared as part of the E&C Committee’s mark up of Medicaid provision, it has not yet had the opportunity to offer detailed estimates of the impact on Medicaid enrollment.  

Also on May 20, President Trump weighed in with House GOP holdouts who are calling for even deeper Medicaid cuts in the strongest possible (and widely reported) terms: “Don’t #*!@ around with Medicaid!” That’s as clear a warning as any to do no harm to Medicaid. Yet key Medicaid proposals in the House budget bill would do extreme harm to the people enrolled in Medicaid, to federal funding for states and for the health care delivery system that serves Medicaid enrollees.

Manatt’s Medicaid Financial Model Update

With the proposed House Budget Bill now in hand, we are drawing on Manatt updated Health’s 50-State Medicaid Financing Model and updated State Health and Value Strategies toolkit to reflect the parameters of several key House budget bill proposals to cut Medicaid, and explore their impacts nationally and for each of the 50 states and D.C. The full roll-up of House budget bill proposals impacting Medicaid is summarized in the chart found at the end of today’s 80 Million. We modeled the impacts of the following key House budget bill proposals. Specifically, we modeled the standalone impact of the work requirements, as well as the cumulative impact of these proposals, including their interactions:

House Budget Bill Medicaid Provisions Included in Updated Manatt Modeling

Key Takeaways

If you are interested only in how your state might fare under a work requirement and the combination of these five proposals, take a look at the state-by-state tables available here. But, if you are interested in the national implications of these proposed cuts, here are our takeaways from updating the national and state enrollment and funding impacts of the House budget bill.

• The combined impact of these key provisions of the House budget bill results in federal Medicaid funding cuts of $710 billion. We remind our readers that this figure is understated, as it leaves out several major policy changes that would drive coverage losses and reductions in federal Medicaid expenditures.

• While Congress and the CBO focus on the impact on federal Medicaid expenditures, the total loss of funds (including federal and state funds) is $907 billion for the limited set of proposals we modeled in this analysis.

• All states face significant funding losses under the House budget bill, though some more than others.

• The 10 states that have not expanded Medicaid see a 6% reduction in their total Medicaid funding in these limited modeling results, largely reflecting the impact of freezing existing provider taxes and SDPs at current levels.

• The 41 expansion states and Wisconsin¹ see a funding reduction of up to 9% because they face these same cuts, but also additional reductions in expenditures for expansion adults attributable to mandatory work requirements and six-month renewal requirements for this population.

• Work requirements alone would result in approximately 5 million fewer people enrolled in Medicaid each year and $372 billion in reduced federal funds for the 41 expansion states and Wisconsin, assuming they are implemented on Jan. 1, 2029. When taking state and federal funding impacts into account the Medicaid funding loss would reach $409 billion for work requirements alone (assuming a midpoint estimate of coverage losses.

• If Congress moves up the date of implementation to Jan. 1, 2027, the size of the cut in federal Medicaid funding for FFY 2025 to FFY 2034 will increase to $487 billion, an impact that reaches $537 billion when accounting for both state and federal funding losses.

• Coverage losses due to work requirements could be significantly higher (7 million) or lower (3 million) depending on state implementation choices and the efficiency of states’ eligibility and data matching systems.

We emphasize (again) that many of the changes that Manatt has not modeled in its analysis due to data limitations would have major implications for states and Medicaid enrollees outside of the expansion group.

•  According to CBO estimates, repeal of two eligibility and enrollment rules is expected to cause some 2.3 million fewer seniors, people with disabilities, children, and others to receive Medicaid coverage.

• New mandatory cost-sharing on certain adults in Medicaid of up to $35 can be expected to significantly affect their access to care.

• Revoking already-approved “uniform” provider taxes will cost states like California, Illinois, Michigan, New York, Ohio and West Virginia billions of dollars. Additionally, these modeling results do not fully capture the impact of closing off states’ ability to adopt new provider taxes, increase current taxes or enact limitations on provider taxes other than hospital taxes.

The Bottom Line

Reactions in the press and others to the release of the House Medicaid proposals have included “coulda’ been worse” — and we get that as it seems that for the moment at least the House has dropped from consideration the proposals that would fundamentally restructure Medicaid funding for most states, stripping billions out in the process. But we hope these estimated House bill impacts disabuse 80 Million readers and others of that notion. It’s hard to imagine “worse” than the impacts of these cuts in terms of people becoming uninsured due to the Medicaid changes, which CBO estimates close to 8 million people — and total state and federal Medicaid funding losses over 10 years which could approach $1 trillion over the next ten years.

What happens next? We are at another inflection point in the reconciliation process that requires attention to and amplification of these potentially devasting cuts to Medicaid. The House Rules Committee reconvened at 1 a.m. on May 21 and, as of this writing, that meeting is still in progress. Despite the President’s warning to the House on deeper Medicaid cuts, we expect further modifications in the legislation reported out of the rules committee to the full House for consideration including, perhaps, accelerating the implementation dates for the mandatory work reporting requirements (in Section 44141 of the E&C bill) from 2029 to 2028, or even 2027, in order to reap additional federal savings. It remains to be seen whether there will be a full CBO analysis of the comprehensive legislation prior to rules. Once the legislation is advanced from the House Rules Committee, House GOP leadership has indicated that it will move expeditiously to hold the full House vote before House Speaker Mike Johnson’s (R-La.) self-imposed Memorial Day deadline.

House One Big Beautiful Bill Act Provisions Impacting Medicaid

[1] Wisconsin utilizes section 1115 authority to provide Medicaid coverage to adults above mandatory eligibility levels, and under the E&C proposal would be required to comply with the new requirements. For purposes of the work requirements and six-month redetermination requirement, hereafter we include Wisconsin in references to expansion states.

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