One Big Beautiful Bill Act – What’s in it for health?

Chapter 1 - Medicaid

Subchapter A - Reducing fraud and improving enrollment processes

• Sec. 71101–71102: Pauses implementation of two federal rules promulgated during President Biden's term related to eligibility and enrollment in Medicaid, the Children's Health Insurance Program (CHIP), and Medicare Savings Programs, to reassess operational impact, state burden, and program integrity concerns.
• Sec. 71103: Requires states to implement measures to reduce duplicate enrollments across Medicaid and CHIP by cross-checking with other state and federal data systems.
• Sec. 71104–71105: Mandates states to routinely verify death records and remove deceased individuals and providers from enrollment rolls. The bill requires enhanced data matching with the Social Security Administration (SSA) and other databases.
• Sec. 71106: Authorizes payment reductions from future Medicaid disbursements to states if overpayments are identified and not corrected promptly, beginning in 2030.
• Sec. 71107: Tightens eligibility redetermination rules for Medicaid recipients, requiring automated eligibility determinations every 6 months, beginning in 2027. Children meeting TANF-related eligibility criteria are excluded from the 6-month redetermination cycle, provided they are under age 19.
• Sec. 71108: Increases the home equity limit for determining long-term care eligibility, giving states greater flexibility in asset testing.
• Sec. 71109–71110: Restricts Medicaid eligibility for certain non-citizens and non-lawful permanent residents beginning in October 1, 2026.  Expands Federal Medical Assistance Percentage (FMAP) for emergency services to help offset uncompensated care.

Subchapter B - Preventing wasteful spending

• Sec. 71111: Delays the Centers for Medicare & Medicaid Services (CMS) rule on nursing home staffing mandates to 2034.
• Sec. 71112: Directs states to reduce Medicaid spending growth, with new tools for states to curb expansion-related costs.
• Sec. 71113: Prohibits federal payments to non-profits and essential community providers that perform abortions.

Subchapter C - Stopping abusive financing pactices

• Sec. 71114: Sunsets increased FMAP incentives previously offered to encourage expansion under the ACA.
• Sec. 71115–71116: Adds limitations for provider taxes and state-directed payments that can manipulate federal matching funds.

Specifically, Sec. 71115 would prohibit non-expansion states from increasing the rate of current provider taxes or increasing the base of the tax to a class or items of services that the tax did not previously apply.  Beginning in 2028, the current 6 percent threshold would be reduced by 0.5 percent annually until the maximum threshold reaches 3.5 percent in 2031.

On state-directed payments, Sec. 71116 would cap Medicaid payments at 100 percent of the Medicare payment for expansion stated and 110 percent of the Medicare payment for non-expansion states, with an annual phase down for certain grandfathered payments (i.e. payment for rural hospital services or payments approved or submitted before May 1, 2025).

• Sec. 71117–71118: Requires waiver requests under Section 1115 to demonstrate budget neutrality, preventing states from using waivers to draw down extra federal dollars.

Subchapter D - Increasing personal accountability

• Sec. 71119: Requires states to implement community engagement (work) requirements for able-bodied Medicaid expansion enrollees, similar to prior waiver approvals under Section 1115.
• Sec. 71120: Permits states to modify cost-sharing requirements (copays) for expansion populations to increase enrollees' “skin in the game.”

Subchapter E - Expanding access to care

• Sec. 71121: Provides states with tools to adjust Medicaid coverage for Home and Community-Based Services (HCBS), improving access and reducing reliance on institutional care.

Chapter 2 - Medicare

Subchapter A - Strengthening eligibility requirements

• Sec. 71201: Tightens eligibility for Medicare to prevent coverage for individuals who do not meet lawful presence and residency requirements, in alignment with Medicaid eligibility rules.

Subchapter B - Improving services for seniors

• Sec. 71202: Authorizes a 2.5 percent adjustment to the Medicare Physician Fee Schedule payment rate for 2026 to mitigate disruptions due to inflation and pandemic-era underfunding.
• Sec. 71203: Clarifies that certain orphan drugs used for rare diseases are excluded from the Drug Price Negotiation Program to maintain innovation incentives.

Chapter 3 - Health tax provisions (Affordable Care Act)

Subchapter A - Improving eligibility criteria

• Sec. 71301: Limits the Premium Tax Credit (PTC) only to lawfully present individuals with clear eligibility under ACA rules.
• Sec. 71302: Disallows PTCs during any month where a person is Medicaid-ineligible due to immigration status, closing a gap in subsidy eligibility.

Subchapter B - Preventing waste, fraud, and abuse

• Sec. 71303–71304: Strengthens verification requirements and prevents subsidy abuse during Special Enrollment Periods, where fraud risk is higher.
• Sec. 71305: Removes the cap on the IRS's ability to recapture improper advance PTC payments during tax reconciliation.

Subchapter C - Enhancing choice for patients

• Sec. 71306: Makes the COVID-era CARES Act telehealth safe harbor permanent for Health Savings Accounts (HSA)-eligible plans, allowing telehealth without a deductible.
• Sec. 71307: Allows individuals to use HSAs with bronze or catastrophic plans, expanding options for young and healthy enrollees.
• Sec. 71308: Permits HSA eligibility for those using Direct Primary Care (DPC) arrangements.

Chapter 4 - Protecting rural hospitals and providers

• Sec. 71401: Establishes a new Rural Health Transformation Program ($50B over 5 years) to support rural hospitals and health systems through infrastructure modernization, care coordination grants, and payment model reforms aimed at sustainability.

Authored by Cybil Roehrenbeck, Ches Garrison, and Shelley Castle.