Trump’s ‘One Big Beautiful Bill Act’ Targets Medicaid, Medicare and Reduces the Affordable Care Act

“ONE BIG BEAUTIFUL BILL ACT” WILL HURT US ALL, Parts 2 – 4

By Joni Halpern

PART 2: WHOM SHOULD WE GO AFTER?

The “One Big Beautiful Bill Act” (OBBBA) derives the biggest budget cuts from two massive public health programs — Medicaid and Medicare. It also makes changes that will reduce enrollment in health insurance plans under the Affordable Care Act (ACA).

Today, more than seven million seniors and 10 million people with disabilities rely on Medicaid. Data show that about 15 million more older adults and people with disabilities and chronic conditions are insured through Medicaid though they do not qualify for it based on age or disability. Almost 70 million people are enrolled in Medicare.3 Almost eight million people will lose Medicaid eligibility because of OBBBA’s changes to the program, 3.1 million will lose other health coverage from OBBBA’s changes affecting ACA Marketplaces, almost one million more will lose coverage from OBBBA’s incorporation of Trump’s proposed ACA rule, and about 4.2 million additional people will lose coverage due to OBBBA’s expiration of ACA premium tax credits.4

Three Big Targets For OBBBA Strategists

Medicaid is a jointly funded state and federal program that helps cover healthcare costs for people with limited income who meet other eligibility requirements. (Medi-Cal is California’s version of Medicaid.). Medicaid is the largest public health insurance program for low-income Americans and the primary payer for long-term services and supports. The Congressional Budget Office estimates that OBBBA will cut federal Medicaid spending by almost $800 billion over 10 years and Medicaid enrollment by 10.3 million.

Medicare is a federal health insurance program for people age 65 or older, as well as for people younger than 65 who have severe health conditions such as permanent kidney failure, Lou Gehrig’s disease, or other qualifying life-threatening illnesses. Medicare is financed by general federal revenues, payroll tax contributions and individual premiums. Most older people do not pay a premium for the  hospitalization part of Medicare insurance. But other parts of Medicare require individuals to pay premiums. Even with Medicare, there are still gaps in coverage that are filled by supplemental plans for those who can afford them. Those who can’t afford such plans must rely solely upon Medicare for basic healthcare coverage, coverage that will be cut back as a result of all the changes proposed under OBBBA.

The ACA, also known as “Obamacare,” is a comprehensive healthcare reform law enacted in 2010. It includes provisions that offer incentives to states to expand Medicaid coverage to previously ineligible persons, create health insurance marketplaces, provide premium tax credits to persons with incomes less than 400% of the federal poverty threshold to help them cover insurance premiums, and set standards for insurance plans. The first Trump Administrations sought unsuccessfully to destroy the ACA, but did manage to cut back some essential provisions that supported its sustainability. OBBBA now seeks to weaken it further.

Who Will Be OBBBA’s Immediate Victims? First, Let’s Go After the Immigrants … Again

Back in 1996, when welfare reform passed, President Bill Clinton and Congress breathed a sigh of relief when they figured out that about half the burden of kicking poor families off welfare rolls, regardless of whether they were still poor, would be borne by lawfully present immigrants who had worked in the U.S., paid taxes, but had not become naturalized citizens and therefore could not vote. (The other half of the burden would fall upon American families who were born here but were poor and failed to vote in great numbers.)

While touting their courageous efforts to balance the federal budget in 1996, Congress and President Clinton created a welfare reform program that left more people in deep poverty than at any time since the government started keeping track of that number in 1975. (“Deep poverty” is defined as living in a household with total cash income below 50% of the federal poverty threshold.)5

Thus, it should be no surprise that a significant portion of OBBBA’s healthcare program cuts will be achieved by excluding lawfully present immigrants who have paid into the system for years. Undocumented immigrants presently are ineligible for anything but emergency treatment necessary to protect life, and even that treatment is denied coverage if they do not meet the nonfinancial and financial eligibility requirements for Medicaid.

Undocumented immigrants are also ineligible for coverage under the Affordable Care Act. Those who can afford private coverage may purchase it themselves, but most cannot afford it. Estimates are that about half to three-fourths of undocumented immigrants lack any health care coverage at all. Under OBBBA, however, even many lawfully present immigrants, who already face eligibility restrictions for federally funded health insurance, will lose coverage despite having worked and paid into the system for years. OBBBA slices off large chunks of this otherwise eligible population.

First, OBBBA eliminates or delays coverage for lawfully present immigrants. Under the ACA, qualified lawfully present immigrants are entitled to the same premium
tax credits as any American citizen to help pay for health insurance purchased through ACA Marketplaces. This has helped lawfully present immigrants who are very low-income and ineligible for Medicaid, which has more restricted eligibility and requires a five-year waiting period after gaining legal status. Under OBBBA, that access to ACA premium assistance will cease. Lawful permanent residents (green card holders) will not be eligible for either Medicaid or the ACA’s premium tax credits until five years after obtaining legal status. Other groups of lawfully present immigrants would be ineligible permanently or Medicaid, the ACA, or both.

OBBBA will also restrict the categories of lawfully present immigrants who can access coverage under the ACA Marketplace. Effective in 2027, only green card
holders (after the five-year waiting period following the attainment of legal status), certain Cuban immigrants, and people from the Federated States of Micronesia and the Republic of the Marshall Islands will qualify for premium tax credits.

Presently, U.S. citizens and lawfully present immigrants can be eligible for Medicare. Two of eligible groups within that category are: (1) Those who have 40
quarters or 10 years of work history in jobs where they or their spouses paid Medicare taxes, or (2) those who are green card holders, have lived in the U.S. for at least five years, and have “bought into” Medicare.6

OBBA will bar Medicare eligibility for many immigrants who currently qualify based on work experience. 7

Groups who would lose Medicare eligibility, despite having worked with federal authorization and having paid into Medicare, include people with Temporary Protected
Status (TPS), refugees, asylees, trafficking survivors, domestic violence survivors, and others immigrants. The ban would apply retroactively; immigrants who have been receiving Medicare for years would lose coverage one year from the date Congress enacts the law. 8 These folks could apply for enrollment in the Marketplaces under the ACA, but they would be denied premium tax credits at any income level.

DACA (Deferred Action for Childhood Arrivals) recipients, many of whom have been in the U.S. almost all their lives, would be denied access to Medicaid, Medicare,
and to ACA Marketplaces. 9 That is because OBBBA redefines the term “lawfully present” in a way that excludes them.

Let’s Go After Old People and Persons with Disabilities

About 12.5 million people are jointly enrolled in Medicare and Medicaid (also called “dually eligible” people). They get their primary health insurance from Medicare but additional coverage through their state Medicaid program. As Justice in Aging, a nonprofit advocacy group fighting for the rights of older Americans explains it, Medicaid is what makes Medicare accessible and affordable for over 10 million people in this country. 10 It helps pay Medicare premiums for low-income seniors and adults with disabilities. It also covers some out-of-pocket costs and long-term care services.

Just by halting implementation of two newly adopted Biden-era rules that were intended to improve parts of the Medicare Program, the Congressional Budget Office
estimates 1.3 million dually eligible Medicare enrollees will lose Medicaid Coverage. The projected savings of $11 billion will be achieved when these enrollees cannot obtain Medicare services, because Medicaid funds will not cover Medicare premiums or costs for services or long-term care that are not covered by Medicare.
OBBBA will do away with those extravagances.

Let’s Go After States That Use Their Own Funds to Provide Healthcare to Non-Favored People

OBBBA’s provisions also target 15 states that use their own funds to provide some measure of health insurance coverage regardless of immigration status. The
federal portion of Medicaid funding will be cut from 90% to 80% for states that cover undocumented immigrants and some lawfully present immigrants who would not be eligible for federally funded health insurance under OBBBA.11 This penalty would apply to state-funded programs covering undocumented children, people who have received humanitarian parole (such as Afghans who aided American operations in Afghanistan, Ukrainians fleeing the war, etc.), and other immigrants who are in the process of adjusting their status (such as those with pending applications for asylum or people with work or student visas).

Expansion costs are those that extended Medicaid coverage to adults without children and others who once were ineligible for Medicaid. There are other OBBBA
provisions designed to disincentivize expansion of Medicaid in states that have not yet extended Medicaid, while other provisions may trigger an automatic repeal of expansion in 12 states.

Still other OBBBA provisions restrict taxes that states can levy on healthcare providers. These taxes help states raise the revenue they need to pay their share of
Medicaid expenses, a required contribution before states can obtain federal funding to reimburse costs of Medicaid programs. The House version of OBBBA prohibits new provider taxes or increases to existing taxes. The Senate version reduces provider taxes from the current 6% to 3.5% for states that have expanded Medicaid to people previously ineligible.12 The 10 states that have not expanded Medicaid would not be able to institute any new provider taxes, although they could tax up to the 6%.

These and other provisions will shift costs to states, which in turn will force states to cut programs. States will also be under budgetary pressure from administering the new work and reporting requirements. This shortfall will be made worse by the $300 billion in food stamp cuts (Supplemental Nutrition Assistance Program, or “SNAP”) OBBBA mandates, with additional food stamp work and reporting requirements increasing administrative costs for states and counties. OBBBA also shifts enormous additional financial burdens on states to pay part of the actual costs of food stamp benefits, previously borne by the federal government.
States will be hard-pressed to find ways to provide even basic health care coverage or services to millions of people who need them.

PART 3: WORK WILL SET YOU FREE – FROM MEDICAID COVERAGE

OBBBA requires every state to impose work requirements for adults ages 19 through 64 who apply for or receive Medicaid. Data show that most adults receiving
Medicaid are working low-wage jobs in small businesses or industries that have low employer-sponsored health insurance or none at all. Among working-age adults
receiving Medicaid who are not disabled, 64% percent were working full or part-time.

Twelve percent were not working but caring for others in the household, 10 percent were disabled but not receiving government-funded disability benefits, and seven
percent were in school.13 OBBBA will require each “able-bodied” Medicaid recipient to work a minimum of 80 hours per month. “Medically frail” persons will not have to work, but applicants for Medicaid will have to show proof of this frailty, and that requires medical documentation they will not be able to get without Medicaid. Furthermore, there is no definition of “medically frail,” so we have no idea of the severity or type of disabilities that will support exemptions.

States will not be allowed to expand work exemptions. But they will be allowed to expand the number of times a person must verify that work requirements are met. At
a minimum, proof of work must be shown one month prior to Medicaid application and prior to eligibility redeterminations every six months. The burden of processing all this paperwork will fall to state and county health and human services staffs that oversee or administer the state version of Medicaid.

As with all compliance obstacles imposed on people seeking help in any venue, whether corporate or governmental, the new work requirement and verification red tape will become effective obstacles to getting health care and keeping it. People who work in low-wage jobs have traditionally been the most vulnerable even to slight changes in the economy. Layoffs, reduced work hours, unmet childcare and transportation needs, illness and dozens of other life circumstances occur often and will interrupt eligibility for Medicaid.

Five million people are estimated to become uninsured under the new work requirements for Medicaid.14 See? OBBBA’s new barriers will work like a charm.

PART 4: OBBA GOALS: BLIND, TOOTHLESS, AND WAITING FOR NURSING HOMES

Home and Community-Based Services (HCBS) presently are included in “optional” services under Medicaid. States have the option to provide a broader range of Medicaid services to support people with disabilities, older adults who need help to remain independent, and others with long-term needs. States are allowed to provide these services under legislation that was passed during Ronald Reagan’s presidency.

The reasoning was that if people disabled by age or medical condition could live at home with proper support instead of being institutionalized, it would cost less and add to their quality of life. Go figure.

HCBS programs that support independent living include, among others: personal care assistance like bathing, cooking, and dressing; respite care, which is short-term
relief for family caregivers; supported employment or job coaching to help disabled persons enter or remain in the workforce; adult day services offering supportive
activities for persons with cognitive or other impairments, and other services. Other optional Medicaid services that OBBBA will place at risk include dental and vision care for adults, prosthetics and durable medical equipment, mental health and substance abuse treatment, prescription drugs, and physical and speech therapy.

For decades, HCBS programs have had bipartisan support, but no longer. Cutting HCBS and other optional services will place incredible financial burdens on
states. When recessions or other economic downturns have occurred in the past, states have had to cut back on optional programs. OBBBA will burden the states way beyond that, forcing them to reduce or terminate optional programs altogether. Don’t think nursing homes will provide the care for all who need it, however. Not only will there likely be a shortage of facilities, but nursing home care is expensive, and the absence of Medicaid as a major payer will help ensure the need cannot be met.

And That’s Not All…

There are many more provisions in OBBBA that will drastically reduce federal investment in our communities. Along with healthcare cuts, for example, food stamps (Supplemental Nutrition Assistance Program, or “SNAP”) will undergo a drastic reduction of $300 billion in funding that will leave very low-income children and adults hungry. In 2024, 42 million low-income individuals and families qualified for food stamps.

In addition, OBBBA will place enormous financial and administrative burdens on states to bear even more food stamp program administrative costs. OBBBA will also
require states to pay a percentage of actual food stamp benefits, a cost that has historically been borne by the federal government. States and counties will also bear the costs of processing increased paperwork related to additional work requirements that force single parents of youngsters under seven years old and up, and adults ages 19-64 years old, to work 80 hours a month and provide regular verification of work hours.

Cuts and changes to food stamps and Medicaid are not the only provisions that will harm hardworking Americans. These programs are staffed in large part by social
workers, supervisors, auditors, agency officials, fraud investigators, and others. In schools, lunch programs are staffed or supervised by school personnel. Hospitals
provide jobs for doctors, nurses, many other professionals, as well as food service workers, housekeepers, and others. Grocery stores employ clerks, stockers,
merchandisers and buyers, and host of other workers. Rural hospitals rely on federal funding to care for patients and keep hospital doors open. Urban hospitals will be
overwhelmed by patients who cannot pay but desperately need care. Schools will lose funding when student attendance subsides due to illnesses that spread when preventive care is not available and nutrition is inadequate. Those are only some of the costs never mentioned in the sales pitch for OBBBA.

If You Care, Now’s the Time to Make Yourself Heard

It is said by some commentators that many of the Senators and Congress members know little or nothing of what is contained in OBBBA. For Americans who know something about OBBBA’s deadly provisions, it might be time to share what you know with your federal legislators. OBBBA is landmark legislation. It can affect our lives in ways that harm.

Footnotes

1 “Protecting Medicaid from Cuts in Congress: Updates for Aging Advocates,” Justice in Aging Webinar, June 17 2025, Transcript. https://justiceinaging.org/protecting-medicaid-from-cuts-in-congress-updates-for-aging-advocates/
2 “Protecting Medicaid from Cuts in Congress: Updates for Aging Advocates,” Justice in Aging Webinar, June 17 2025, Transcript. https://justiceinaging.org/protecting-medicaid-from-cuts-in-congress-updates-for-aging-advocates/
3 Manatt Health, “The Proposed One Big Beautiful Act Would Mean Dramatic Change for Immigrant Health Coverage,” State Health & Value Strategies, Princeton University; June 6, 2025. https://shvs.org/the-proposed-one-big-beautiful-bill-act-would-mean-dramatic-change-for-immigrant-health-coverage/
4 Jared Ortiz, Matt McGough, et al., “How Will the One Big Beautiful Bill Act Affect the ACA, Medicaid, and the Uninsured Rate?”, Kaiser Family Foundation, June 18, 2025. https://www.kff.org/policy-watch/how-will-the-2025-budget-reconciliation-affect-the-aca-medicaid-and-the-uninsured-rate/
5 For a family of three living in the 48 contiguous states and the District of Columbia, half the federal poverty threshold would be about $13, 325 a year.
6 “’Big Beautiful Bill’” Would Strip Medicare from Some Lawfully Present Immigrants, Threatening Health and Economic Security,” Center for Medicare Advocacy, June 18, 2025. https://medicareadvocacy.org/bill-would-take-medicare-from-some-who-have-paid-in-for-decades/
7 Id.
8 Id.
9 Id.
10 “Protecting Medicaid from Cuts in Congress: Updates for Aging Advocates,” supra, endnote 1.
11 H.R. 1; Title IV, Section 44111
12 “Protecting Medicaid from Cuts in Congress: Updates for Aging Advocates,” supra, endnote 1.
13 Jennifer Tolbert, Sammy Cervantes, et al., “Understanding the Intersection of Medicaid and Work: An Update,” Kaiser Family Foundation, May 30, 2025. https://www.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work-an-update/
14 “Protecting Medicaid from Cuts in Congress: Updates for Aging Advocates,” supra, endnote 1.