Projected National Impact by 2034
~$1 Trillion
Reduction in Federal Medicaid Spending
>11.8 Million
Increase in Uninsured Americans
Source: Congressional Budget Office (CBO) Estimates
Requirement Explorer
Filter the provisions from H.R. 1 based on their implementation pathway. "Self-Enacting" provisions are effective on a set date without needing new federal rules, while others "Require Federal Action" (e.g., HHS guidance) before states can fully implement them.
Thematic Deep Dives
Pillar 1: Eligibility & Enrollment Burdens
The OBBBA introduces major new hurdles to Medicaid eligibility, centered on community engagement (work) requirements and more frequent renewals. The CBO projects the work requirement provision alone will generate massive federal savings, primarily from eligible individuals losing coverage due to administrative complexity, not from increased employment.
Source: CBO Federal Savings Projections
Pillar 2: State Financing Constraints
The law significantly restricts states' ability to fund their share of Medicaid costs. It freezes the use of provider taxes, a key financing tool for every state but Alaska, and devalues existing taxes in states that have expanded Medicaid. This creates a "fiscal vise," forcing difficult choices between cutting provider payments, reducing benefits, or raising other taxes.
The immediate moratorium on new or increased provider taxes removes a state's most flexible tool for responding to rising health care costs or economic downturns. States with pending provider tax legislation must halt it, and those with sunset provisions in existing tax laws may be unable to renew them, creating a fiscal cliff. This single provision is projected by the CBO to save the federal government $89 billion, highlighting its massive impact on state budgets.
The combination of reduced provider tax revenue and new federal caps on State-Directed Payments (SDPs) will inevitably lead to lower reimbursement rates for hospitals and nursing facilities. This is particularly dangerous for safety-net and rural hospitals, which often rely on supplemental payments to remain financially viable while serving a high proportion of Medicaid patients. The result is a heightened risk of service line reductions and facility closures, potentially creating "health care deserts."
Pillar 3: Benefit & Cost-Sharing Mandates
The OBBBA imposes new national mandates on states, requiring cost-sharing for many expansion enrollees and prohibiting federal funds for specific providers and services. This marks a significant federal intrusion into state health policy, creating new administrative burdens and legal risks for states.
States are now required to impose cost-sharing (up to $35 per service) on ACA expansion enrollees with incomes above 100% FPL. Research shows that even modest out-of-pocket costs create significant barriers to care for low-income populations, often leading to delayed or forgone necessary care. This also creates major administrative complexity for states, which must now build systems to bill, track, and collect these payments while ensuring families do not exceed a 5% household income cap.
Prohibiting federal funds for specific providers (e.g., Planned Parenthood) and services (e.g., gender-affirming care) sets a new precedent. A state may be caught between this federal funding prohibition and a separate state law or court order requiring coverage. In such cases, the state would be forced to cover the full cost with 100% state funds, creating new, un-plannable budget pressures and threatening access to a wide range of preventive health services for millions.
State Preparedness Roadmap
Immediate Actions (First 90 Days)
- ✓Convene leadership to analyze all "Self-Enacting" provisions.
- ✓Halt any state activities now prohibited by the law (e.g., new provider taxes).
- ✓Establish a formal OBBBA implementation task force with executive leads.
Near-Term Actions (3-12 Months)
- ✓Develop a formal strategy for engaging with HHS/CMS on new regulations.
- ✓Scope IT system changes and develop a multi-year budget request.
- ✓Conduct fiscal modeling to project the impact of financing restrictions.
- ✓Initiate formal communications with MCOs, providers, and advocates.
Long-Term Strategy (1-3 Years)
- ✓Begin multi-year project to design, build, and test new IT systems.
- ✓Develop and deploy comprehensive training for eligibility workers.
- ✓Launch a multi-lingual public education campaign for beneficiaries.
- ✓Work with state legislature on long-term budget solutions.