Last week the House of Representatives, by the narrowest of margins (215-214), passed the One Big Beautiful Bill Act, H.R. 1. The bill includes unprecedented changes to Medicaid summarized here by my colleague Edwin Park. Over the next ten years, these changes will terminate Medicaid coverage for millions of Americans and reduce federal Medicaid payments to states by hundreds of billions of dollars.
That much is clear. What is not yet known—and what was not known by the Members of the House who voted for the bill at the time they voted—is exactly how many millions of Americans will lose their coverage and how many hundreds of billions of dollars the federal government will “save” as a result. That’s because the House Republican leadership rushed the bill through without waiting for final estimates from the nonpartisan Congressional Budget Office (CBO), the official budgetary scorekeeper for Congress.
At the time of the vote, Members had access to preliminary, incomplete CBO estimates of the version of the bill reported by the Energy & Commerce Committee. Those estimates were that the Medicaid changes would result in over 10 million Americans losing Medicaid coverage and federal Medicaid payments to states falling by nearly $800 billion by 2034.
The version of the bill that finally passed the House was not, however, the version reported by the Energy and Commerce Committee. A number of changes were made at the last minute that will have the effect of increasing Medicaid coverage loss and federal funding reductions. The most harmful of these was to accelerate from January 1, 2029 to no later than December 31, 2026 the effective date for the requirement that non-exempt adults in expansion states report work hours.
To be clear, this is not to criticize CBO. Medicaid is complicated, with lots of moving parts. Estimating the coverage and federal spending effects of changes in federal Medicaid policy is particularly challenging because those effects depend in part on state behavior in response to the changes. Given the wide variation among states in program design and policy preferences, modeling those state responses in the aggregate is hardly straightforward (CBO does not produce state-specific estimates). And when a large number of policy changes take effect simultaneously—not just in Medicaid, but in other large federal-state programs like SNAP—there are “interactive” effects that need to be accounted for. Finally, it’s unhelpful to the estimation process when the statutory text under review is constantly changing.
Although the CBO estimates for the version that passed the House are not yet available, the statutory text is. And that text is the starting point for understanding the potential impact of the bill’s Medicaid provisions on each state. Medicaid is the ultimate federal-state program, both in terms of the number of Americans it covers (71.3 million in December 2024) and the amount of federal funds supporting those state-run health insurance programs ($656 billion in FY 2025). The Medicaid cuts in the House-passed bill would fundamentally alter the program over the next decade, and not in a beautiful way.
The bill is now before the Senate, where state-level analysis is particularly relevant. By constitutional design, the Senate operates as a check on potential excesses by the House as well as to protect the interests of individual states. As Senator Mitch McConnell explained in the New York Times, “One of the body’s central purposes is making new laws earn broader support than what is required for a bare majority in the House.” Quoting James Madison in Federalist 62, McConnell observed that the Senate “is designed not to rubber-stamp House bills but to act as an ‘additional impediment’ and ‘complicated check’ on ‘improper acts of legislation.’”
H.R. 1 is a quintessentially improper act of legislation. Among the reasons are its Medicaid provisions (other than those with bipartisan support in sections 44123, 44124, 44302 and 44303). Senators have both the opportunity and responsibility to fix them. To do so, they first need to understand the implications of the House Medicaid policy changes for their state as a whole, not just on the individual Congressional districts that are appropriately the primary focus of attention for Members of the House. Here are just a few of the many questions raised by the House bill that all Senators will want to explore, regardless of whether their state covers Medicaid expansion adults. (Because the House bill takes particular aim at that population, the Senators from those 40 states have no shortage of additional questions to address).
- State budget impact. The bill limits the ability of states to pay for their share of Medicaid costs by prohibiting them from establishing any new provider taxes or increasing the rate or base of existing taxes (section 4132). Each state’s tax structure and revenue needs are different; what are the implications of the House bill’s moratorium for the state’s revenue base? Given inflation in health care prices and the growing need for long-term care services and supports, if the provider tax moratorium is left in place, will the state have revenue sources that will enable it to finance a Medicaid program that meets the needs of its population over the next 5 to 10 years? What are the implications of the moratorium for the state’s credit rating in the short- and long-run?
- Red tape and coverage loss. How many low-income children and adults in the state are likely to lose Medicaid coverage as a result of the work reporting requirements and other red tape provisions in the bill (sections 44101-44103, 44107, 44108, 44110, and 44141)? How many of those will be able to find other affordable coverage in light of the failure of the bill to extend enhanced premium tax credits and provisions in the bill targeted at the Marketplaces? How many will become uninsured? Given the importance of Medicaid in small towns and rural areas, what are the implications of large-scale losses of Medicaid coverage for rural hospitals, clinics, pharmacies, nursing homes, and the communities they now serve?
- Administrative Burden. State Medicaid programs serve an incredibly broad population with dramatically different needs, ranging from pregnant and post-partum women to infants and toddlers 0-3 to children with special health care needs and on and on and on. (Reports explaining Medicaid’s role for different populations are available here). As a result, Medicaid is already challenging to administer, to say the least. The red tape provisions of the bill will impose multiple new administrative requirements on states as they take effect over the next four years, making the program even more complex and burdensome for states to operate. Will the state Medicaid agency realistically have the bandwidth to meet all of the new requirements within the House bill’s timeframes while continuing to manage its current responsibilities? If the agency has to outsource some or all of these new administrative tasks, what will it cost the state, and where will the additional funds come from?
CBO will soon issue final estimates that will give Senators and the public alike a good sense of the scale of the coverage loss and spending cuts that will result from the House Medicaid provisions. Those estimates will not help Senators answer the questions above—or many others—specific to their states. Reliable state-level answers will have to come from state and private sources, including state Medicaid agencies, state budget agencies, and private credit rating agencies, among many others. Now is an excellent time to start asking for them.