On July 3, Congress enacted the One Big Beautiful Bill Act (OBBBA), a major new law that will have a tremendous impact on the way health care is delivered and paid for throughout the United States. It was passed all too readily, absent much public debate, and many people are still struggling to comprehend what it means.
Organizations like the Centre for American Progress and The Arc are sounding alarms about the impact of the bill, particularly for those with disabilities, older adults, those in rural communities and low-income families.
Now, Prime Well Med Solutions is the breakdown of what this law does and how it might impact millions of Americans.
Deep Cuts to Medicaid and CHIP Programs
According to an analysis by the Congressional Budget Office (CBO), the new law will reduce Medicaid and the Children’s Health Insurance Program (CHIP) by $1 trillion (selling off more for less by 2034). This is almost certainly going to throw at least 10.5 million people off these crucial programs.
These deep cuts to Medicare and Medicaid would push states into tough choices: Spend more on their own or cut services. Most commonly, states reduce optional services like home and community-based services (HCBS) which help people with disabilities live in the community rather than nursing homes.
You can’t protect one group, such as disabled or older adults, as healthcare systems are linked. If Medicaid is slashed, hospitals could go out of business and health care workers could lose jobs and everyone gets affected.
Home and Community-Based Services Will Suffer
The bill creates a new HCBS option that would enable states to reach more people. They are particularly those who do not require full-time care in an institution.
However, this plan comes with very little funding.
- The new role of federal financing will be to supply only $50 million in 2026 and $100 million in 2027.
- The average annual cost of HCBS for an individual is $36,000.
- That is less than one person per state, so not even accounting for administrative overhead or inflation.
Meanwhile, states will be hemorrhaging Medicaid funding, so they’ll be incapable of properly funding this new program.
The result?
Waiting lists have grown longer and fewer people are able to get services when they need them.
New Medicaid Bill Will Cause People to Lose Coverage
Advocates of the bill say it will prevent people from “not working.” Yet most on Medicaid who can work already do. In reality, the 8 percent of working-age adults not working in 2023 when enrolled in Medicaid were mostly not working because of caregiving responsibilities, illness or retirement.
Under the new policy, people must demonstrate that they are working, studying, volunteering or undergoing job training for at least 80 hours a month. If they can’t meet them, or file the paperwork on time, they may lose their coverage.
This will especially affect:
- Older women working as caregivers to children or aging parents
- Individuals with disabilities who are not eligible for SSI or SSDI
- Remote residents who can’t get to work in reliable transportation, if they can get there at all
Study after study shows that work requirements of this sort do nothing to boost employment, but they do pile on paperwork, mistakes and costs for states and recipients alike.
Risk of Rural Hospital Closures
The bill provides $50 billion over five years to assist rural hospitals. However, how many lives will that save when they have lost the entirety of the $1 trillion in Medicaid funding cuts?
Medicaid is especially important for rural hospitals. As of 2025:
- There are roughly 2,086 rural hospitals.
- The average annual Medicaid payment for each amounts to about $3.9 million.
- Almost 44% of those hospitals were already operating at a loss in 2023.
Without sufficient funding, over 300 rural hospitals are at a tipping point of closing right away. Regardless of what the spread was, if the money were to be split evenly, we would receive a mere $4.5 million for each of the next 5 years, followed by nothing the year after that.
When these hospitals shutter, rural residents, particularly those with disabilities, will lose access to the care they desperately need.
Medicare Will Also Be Affected
The law also makes a bunch of damaging changes to Medicare:
- It pushes back regulations that would have facilitated low- and modest-income seniors and those with disabilities to get help paying for premiums and out-of-pocket costs.
- It takes away Medicare eligibility from law-abiding immigrants who have already contributed to the system.
- The bill could lead to $490 billion in Medicare cuts 2025 from 2027 through 2034, the C.B.O. has said, if Congress does not take more action.
These changes will be particularly punitive to disabled people, who are more likely to depend on Medicare and have fewer financial resources.
Conclusion
Experts assume that as many as 16 million will go without health coverage with the One Big Beautiful Bill Act. The law cuts health care for programs for American citizens larger than any since U.S. healthcare was enacted, all while providing tax cuts to the wealthy.
Those who are disabled or low-income, seniors and rural areas are also set to be hit particularly hard by these decisions. They will face less access to care, more paperwork and less care, particularly when hospitals close or Medicaid no longer covers critical benefits.
In short, the One Big Beautiful Bill Act may have an optimistic name. However, the impact of this legislation could be disastrous for the millions of Americans who access Medicaid, Medicare and community care services to enable them to lead healthy, independent lives.
Do you need help in understanding these changes and optimize your practice’s revenue?
Contact us today!
Related:
cbo.gov/system/files/2025-06/Wyden-Pallone-Neal_Letter_6-4-25.pdf
cms.gov/files/document/health-insurance-exchanges-2025-open-enrollment-report.pdf
cms.gov/files/document/health-insurance-exchanges-2025-open-enrollment-report.pdf
aha.org/system/files/media/file/2025/02/Fact-Sheet-Enhanced-Premium-Tax-Credits-20250207.pdf
cms.gov/files/document/health-insurance-exchanges-2025-open-enrollment-report.pdf
cms.gov/files/document/health-insurance-exchanges-2025-open-enrollment-report.pdf
cbo.gov/system/files/2025-06/Wyden-Pallone-Neal_Letter_6-4-25.pdf
