Trump’s historic One Big Beautiful Bill Act’s sweeping federal healthcare overhaul is poised to reshape the financial landscape for clinicians and patients. The 870-page legislation is expected to have a significant impact on patients and clinicians.
Major Changes Coming For Medicaid Eligibility And Verification
The One Big Beautiful Bill Act spurred federal changes to Medicaid eligibility and enrollment. Maintaining health insurance eligibility hinges entirely on compliance with the new mandates put in place by the bill.
One of the most controversial changes in the One Big Beautiful Bill Act will go into effect in January 2027. The update will institute a Medicaid work requirement with new administrative requirements for clinicians. Under the new law, Medicaid recipients between the ages 19 to 64 must document 80 hours per month of work, community service, or approved education and training.
The One Big Beautiful Bill Act also overhauled the eligibility review period. It now requires more frequent check-ins. Patients in Medicaid expansion will now need to verify eligibility every six months under the new provisions of the bill. Prior to the new act, people in the program would have to rectify annually.
While the One Big Beautiful Bill Act marks the first-time work requirements have been codified into federal law, several states have experimented with similar requirements. Proponents of the bill argue stricter eligibility and verification will cut costs and misuse. However, the precedents in Arkansas and Georgia suggest a rocky path ahead.
In Arkansas, researchers found that the policy doubled administrative overhead and resulted in a 4.4% spike in uninsured adults aged 30 to 49, with no measurable increase in employment. In an internal review of Georgia’s pilot program, the U.S. Government Accountability Office revealed that the costs of marketing and management far outweighed cost savings.
Echoing the office researcher’s sentiments, the Center on Budget and Policy Priorities released a statement stating that the increased verifications may delay treatments, increasing procedural errors and loss in coverage.
Advocacy Groups Warn About Potential Impacts To Revenue And Operations
The American Medical Association and Hospital Advocacy groups have pushed against the new potential administrative requirements. The legislation allows for medical exemptions. However, clinicians will need to certify. As a result, doctors may face an increase in administrative tasks related to the disability and “medical frailty” exemptions, according to the American Medical Association.
John Whyte, the CEO and Executive Vice President of the American Medical Association, penned a formal letter to the Centers for Medicare & Medicaid Services. In it, he expressed the association’s concerns.
“As physicians, we have firsthand experience with how extensive paperwork and bureaucratic processes can disrupt coverage and medical care, and believe it is crucial that these requirements be implemented as effectively and efficiently as possible so patients can continue to receive the health care they need,” Whyte wrote.
In the letter, Whyte proposed “automatic exemptions” based on existing diagnostic codes. This would automatically exempt individuals from work requirements if their electronic health records contain specific ICD-10 diagnostic codes associated with medical frailty or chronic disability.
The Centers for Medicare & Medicaid Services has committed to issuing final implementation guidance for the new requirements by June 2026. States will also have discretion in how they review and operationalize the medical frailty exemption.
The Commonwealth Fund forecasted the new requirements will harm hospital revenues. Released reports by the organization estimates that 5.1 million to 5.8 million people will lose Medicaid coverage as a result of the work requirements. This cut to revenue will most impact safety net hospital and community health centers, per the report.
The One Big Beautiful Bill Act gives states the option to delay implementation until 2029.
How Will These Changes Impact Medicaid Payments?
In addition to the administrative requirements, the One Big Beautiful Bill Act introduces a series of payment and tax shifts. Policy experts say will simultaneously fuel clinician bank accounts.
The new law includes total tax exemption on overtime pay for nurses and resident physicians that allows these clinicians to keep the full portion of their earnings from extra shifts. For physicians, the law delivers a temporary 2.5% increase to the Medicare Physician Fee Schedule for 2026.
The One Big Beautiful Bill Act also allocates $50 billion through 2030 for rural health. These funds offer grants for telehealth expansion and facility modernization in underserved rural clinics.
How Will It Impact Long Term Care?
The legislation tightened net worth eligibility rules for seniors on Medicaid. Beginning in 2028, the law sets a $1 million cap on home equity for Medicaid eligibility. This means older Americans with home equity above $1 million will no longer qualify for long-term care coverage, such as nursing home care.
Under this new law, seniors with home equity exceeding the cap will need to sell or borrow against their homes before qualifying for long-term care. This is a shift away from the traditional Medicaid estate recovery system, which generally allowed individuals to keep their homes during their lifetime while states sought repayment following death.
Supporters of the change say it is intended to limit public spending and better target benefits to those in need. Advocates warn that this blanket cap will most affect patients in high cost housing markets like California and New York.
“The $1 million limit fails to account for rising home values,” Justice in Aging shared in an analysis. “A million-dollar house in New York City or San Francisco, for example, may be a simple two- or three-bedroom residence that might cost $200,000 or less if located elsewhere.”
