It’s Your Money: What do Medicaid changes mean for you? OBBBA Part 2

NEWS: The “One Big Beautiful Bill” Act makes the most significant changes to Medicaid in two decades, including the Children’s Health Insurance Program.

WHAT IT MEANS TO YOU: Changes to Medicaid don’t just affect those who are enrolled in it, but have an impact on health care costs in general, as well as state budgets. 

In our continuing look at what the “One Big Beautiful Bill” Act, signed into law by the president on July 4, means to consumers and their wallets, today we’re looking at what the changes to Medicaid and what it means not only to people who depend on the programs, but to everyone else, too.

Last month, we reviewed the so-called “No Tax on Tips,” “No Tax on Overtime,” “No Tax on Social Security,” changes to SNAP and changes to the Affordable Care Act, and a few other eliminated tax credits for working people.

Just to recap: the purpose of the OBBBA was to extend the 2017 Tax Cuts and Jobs Act, which was set to expire at the end of this year. If you wondered why so many really wealthy people backed Trump in the 2024 election, this is the reason. It’s a “tax reconciliation” act, not the federal budget for the upcoming fiscal year, which has yet to be finalized by Congress and will mean even more pain for working Americans.

There’s a lot to OBBBA, and it can be overwhelming and confusing. Today let’s take a look at some of the issues concerning Medicaid changes in the act. 

First, a summary: The changes are aimed at cutting $1 trillion in Medicaid and CHIP spending over the next nine years. Changes include new work requirements, stricter verification requirements, a reduction in what’s provided to states meaning that states have to pick up the slack, reversal of streamlining under the Biden administration, eliminating retroactive coverage window and removing incentives for states to expand coverage. 

One big change is that the Center for Medicare and Medicaid Services, under the Biden administration last year, passed a rule streamlining enrollment for Medicaid, CHIP, and the Basic Health Program that simplifies enrollment and renewal, aims to maintain coverage continuity, reduces administrative burden on states, and establishes new rules for beneficiary protections, including requirements for states to check available data before terminating eligibility. OBBBA puts a 10-year pause on this. 

The Congressional Budget Office estimates that 11.8 million people will lose Medicaid coverage because of the new rules in the next 10 years, many not because they aren’t eligible, but because it’s simply going to be harder to enroll and states will have trouble keeping up. Some 4.8 million are expected to lose benefits because of the work requirements, another 2.3 million pregnant women and children because of new CHIP enrollment rules. Those who don’t lose coverage will have much higher out-of-pocket costs.

QUESTION: What exactly is Medicaid. Is it the same as Medicare?

Medicaid is a program under the U.S. Department of Health and Human Services that provides health coverage to low-income individuals and households, pregnant women, elderly adults, and people with disabilities. It’s administered by the state, and the state also contributes funding. It’s not based on age, but on income. Medicare is health insurance, provided by the federal government, for people 65 and over, and administered solely by the federal government. We all pay into the system through our paychecks over our working lives.

Q: How many people in New Hampshire are enrolled in Medicaid?

More than 182,000 New Hampshire residents, 13.4% of the state’s population, are enrolled in  Medicaid, including 30.1% of the state’s children and 64% of residents living in nursing homes, according to federal statistics. An additional 60,000 are included in the Granite Advantage Medicaid expansion program for residents between 19 and 64 who have a household income at or below 138% of the federal poverty guideline, which would be $21,597 for an individual. That program is in danger of being eliminated with the new cuts [more below].

Q: I’m not enrolled in Medicaid, so how do the changes affect me?

A lot of medical fees and rates are set according to what Medicaid and Medicare charges. If those changes, so do non-CMMS fees and rates. Medicaid also is the biggest customer of a lot of health care systems and nursing homes. If they’re no longer being paid my Medicaid, they go out of business. That means no services for people who don’t pay with Medicaid, either.

Medicaid provides added support for people who are over 65, people with disabilities, and those with low incomes who can’t afford health care. No matter who you are, it’s possible you’ll end up in one of those categories even if you aren’t now.

Q: But won’t elderly people and those with disabilities will still be prioritized?

States decide how their Medicaid money is allocated, and there’s only so much to go around. When states get less federal Medicaid money, the first thing that goes is optional benefits, such as home- and community-based health care. It’s not healthy working people who need that benefit, right? When funding cuts result in layoffs, hospitals and nursing homes closing, and less access to health care, prioritizing the people who need those services the most just isn’t possible.

The act also does away with nursing home minimum staffing rules enacted under the Biden administration, which means more nursing homes may stay open, but the quality of care may be impacted.

Q: OBBBA created a new provision to cover people who need home-based health care, so they’re still being taking care of, right?

Yes and no. Mostly no. While the new HCBS [Home and Community-Based Services] waivers cover people who don’t need in-patient care, and the amount of money it provides seems like a lot  — $50 million in fiscal year 2026, and $100 million in fiscal year 2027 – it actually is only enough to cover those services for about 27 people per state. Analysts also predict that Medicaid cuts mean longer wait times for people who need those services, and some changes to Medicaid law will make others who need them ineligible. Those changes, beginning in 2028, have new eligibility requirements and more complicated enrollment rules.

Q. Wasn’t the aim of OBBBA to make things simpler and eliminate fraud?

Not really, in fact, everything has become more government-heavy and complicated. So, the aim is to make it harder for people to access services, which means the government won’t have to pay as much for them.

One telling fact is that OBBBA puts a 10-year pause on the new rule enacted last year by the Center for Medicare and Medicaid Services, under the Biden administration, that was due to go into effect Oct. 1, that streamlined enrollment for Medicaid, CHIP, and the Basic Health Program. It simplified enrollment and renewal, aiming to maintain coverage continuity. It also reduced the administrative burden on states, and established new rules for beneficiary protections, including requirements for states to check available data before terminating eligibility. 

Q: Is it true that Medicaid enrollees will have to pay for it now?

Medicaid is free to most recipients, but yes, starting Oct. 1, 2028, those who receive Medicaid whose income is between 100% and 138% of the federal poverty guideline will have copays up to $36 per service, capped annually at 5% of their household’s income In New Hampshire, if it were to be implemented this year, which it’s not, that would apply to those with incomes between$15,650 and  $21,597 for an individual, more as the size of the household increases. The copays won’t apply to primary care, mental health, or substance abuse services, or services from Federally Qualified Health Centers, rural health clinics, or certain behavioral health centers. New Hampshire already got the ball rolling on this in its FY 2026-27 budget, with 5% premiums for the same income levels that OBBBA specifies, beginning next July for both Granite Advantage Health Care Program enrollees and people those who get Children’s Health Insurance Program benefits.

The new state budget also increased to the copay for prescription drugs for Medicaid recipients to $4 from the $1 and $2 most recipients paid.

Q. Is Granite State Advantage, New Hampshire’s Medicaid expansion, going away?

It likely will, unless action is taken. Granite State advantage is the state’s Medicaid expansion program, and 60,000 residents are enrolled. New Hampshire has a trigger law that if federal funding for Medicaid drops below 90% of the program’s cost in the state, the Granite Advantage program will be terminated 180 after funding decreases. OBBBA cut federal Medicaid spending by 12%, which would drop how much the state gets below the threshold.

Q: Aren’t work requirements a good idea? It seems like people who can work should have to if they want to get free government money.

The new law requires that people ages 19 to 64 who are covered by Affordable Care Act Medicaid expansion or an 1115 demonstration waiver [state programs under Medicaid and CHIP that promote their objectives but provide minimum essential coverage], must meet work requirements. The reality is that most of the people in these categories do work. Those who can’t usually don’t because of a disability, lack of transportation or child care, or inability to find a job that pays a living wage. The real goal of the work requirements is to increase paperwork for both enrollees and administrators, which usually has the result in knocking people off the rolls through missed deadlines, not understanding what they need to fill out, and administrative errors.

Q: Who is exempt from work requirements?

People younger than 19 and older than 64 are exempt, as well as:

• Foster care youth under the age of 26
• Anyone who is eligible for Indian Health Service
• Caregivers of a depending child under 13 or a disabled person, with the caregiver being a parent, guardian, or other relative.
• Veterans who have a total-rated disability
• Medically frail individuals, which is defined as someone who is blind or disabled; has a substance use disorder; a disabling mental disorder; a physical, intellectual, or developmental disability; or has “a serious or complex medical condition.”
• Those who already meet work requirements under Temporary Assistance for Needy Families [TANF] or the Supplemental Nutrition Assistance Program [SNAP], which now have the same rules.
• Individuals participating in a qualifying substance use disorder treatment program that meets federal requirements and is run by nonprofit organizations or public community mental health centers.
• Incarcerated individuals or those who have left incarceration within three months or less
• Pregnant and postpartum individuals, for 12 months.

Some states [New Hampshire has not pass legislation to be one of them] also allows exemptions for short-term hardship, including admittance to a hospital, nursing facility, psychiatric facility, or other intensive care settings; individuals in a federally declared disaster area; individuals living in counties with unemployment rates higher than 8% or 1.5 times the national unemployment rate; individuals or their dependents who are required to travel outside their home for medical care for an extended time.

Those who are exempt still have to verify it every six months, which means that many will fall through the cracks, and it will increase the workload for state administrators.

Q. What do the work requirements mean in New Hampshire?

The state’s new 2025-27 fiscal year budget, which was signed by Gov. Kelley Ayotte in July, directs the state to seek federal approval to implement work requirements for adults who get Medicaid expansion, and to charge Medicaid premiums to enrollees with incomes at or above the federal poverty guideline. In 2025, that’s $15,650 for an individual, increasing with each household member, to $32,150 for a family of four

Q: Can people who don’t meet the Medicaid work reporting requirements still get insurance under the Affordable Care Act?

Technically, yes. But if they’re unrolled from Medicaid because they don’t meet the work reporting requirements, they won’t be eligible for the tax credit that makes the ACA affordable to more than 90% of the people who get it. For more on how Medicaid changes affect the ACA, read last month’s column.

Q. Besides federal cuts to Medicaid for states, are there other ways New Hampshire will lose money?

Yes, a big one is changes to the Medicaid Provider Tax, which begin Jan. 1, 2027. Medicaid provider taxes are a way for states to increase the state share of Medicaid cost, which helped increase the federal matching share. In New Hampshire, it’s the 5.4% Medicaid Enhancement Tax on hospital revenue. The state projected the tax to generate $348 million in 2025, which would mean an estimated $485 million in federal matching funds when the rest of the state’s portion is added in. The new law freezes existing taxes, prohibits new ones, imposes new caps, requires states to reduce theirs and changes how they can be used to draw down federal matching funds. New Hampshire already planned to reduce its tax to 3.2% by 2028, but it’s not clear yet if other changes will have to be made to meet the new federal requirements.

Q: What else do the Medicaid changes mean on the New Hampshire state level?

States are going to have to do a lot more administrative work, with a lot fewer resources.

New Hampshire will now have to:

• Conduct new and required member outreach between June 30 and Aug., 2026, to get information on work requirements compliance for ever enrollee who must meet the work requirements. Those who are exempt will have to prove they are. That’s a lot of paperwork for someone to deal with. 
• The state must review whether a Medicaid member meet the work requirement in a period of between one and three months before their application and verify current enrollees continue to meet the requirements for at least one month within each six-month eligibility review period.
• States must issue notices of noncompliance by mail and at least one other form of contact to any Medicaid member or applicant whose work, or exemption, they can’t verify.
• Someone who’s notified of noncompliance has 30 days to appeal before they’re disenrolled, so the state has to keep track of that, and disenroll someone or re-verify them if they can show they do comply or are exempt.

Q. Aside from work requirements, what other new red tape for Medicaid is significant?

Those enrolled in all Medicaid programs will have to verify their eligibility every six months, as opposed to once a year. This will be more work for enrollees, as well as double the work for the people who do the work on the state level.

Q: What is the Medicare Savings Program and how was it affected by OBBBA changes?

The Medicare Savings Program is administered by Medicaid and allows low-income individuals to save money before taxes to help pay Medicare Part B premiums. Medicare Part B is for necessary medical treatment that’s not covered by standard Medicare, and people who get it must pay a premium, just like with private insurance. To qualify for MSP, an individual must be have income between 100% and 120% of the federal poverty guideline. Under the Biden administration, the Centers for Medicare & Medicaid Services finalized a rule to make MSPs more accessible and easier to enroll in. The OBBBA paused that change until Oct. 1, 2034.

Q: What exactly is CHIP and what does it have to do with any of this?

The Children’s Health Insurance Program provides low-cost health coverage to children and pregnant women in households that earn to much to be eligible for Medicaid, but don’t make enough to afford private insurance. CHIP is considered Medicaid expansion, so the new law has the same impact on CHIP recipients as far as eligibility and administrative tasks go. CHIP had been retroactive three months, but that’s been cut back to two.

It also cuts funding for CHIP programs. Since states administer the program, they’ll have to decide how they’ll allocate funding.

Q: How do Medicaid cuts affect women’s health care?

Women make up 55% of Medicaid recipients, and children XX%, so the cuts will affect them disproportionately.

The law also cuts funding for reproductive health clinics that provide abortion services. It doesn’t just cut funding for abortions, but for any health care at all, including cancer screenings, STI testing, and prenatal care. Millions of women rely on Planned Parenthood and other women’s health clinics for their primary care, particularly in rural areas where there aren’t many other options.

Q. Are immigrants still eligible for Medicaid under the new law?

Immigrants who were lawfully in the U.S. were previously eligible for Medicaid, some had to be in the country for five years, others didn’t, including refugees, asylees, Cuban-Haitian entrants, and Compact of Free Association immigrants from the Marshall Islands, Micronesia, and Palau. Under the new law, almost all lawful immigrants who are not U.S. citizens are prohibited from receiving Medicaid, except those from Cuba and Haiti and COFA immigrants.

Those changes apply to CHIP as well as to Medicare.

Q: When do all these Medicaid changes take effect?

Some have already taken effect, others will in the next couple of years. The timeline for OBBBA Medicaid changes is:

• Already implemented: 10-year pause on streamlining Medicare Savings Program eligibility and enrollment.
• 10-year pause on streamlining enrollment for Medicaid, CHIP, and the Basic Health Program.
• Elimination, for one year, of Medicaid payments to health clinics that provide abortion services.
• Sept. 30, 2026: Deadline to notify Medicaid enrollees on work reporting requirements
• Oct. 1, 2026: Medicaid eligibility for most lawfully present immigrant groups ends.
• Dec. 31, 2026: Deadline for states to implement work requirements, though they can start earlier.
• Dec. 31, 2026: Six-month Medicaid eligibility determination begins
• Jan. 1, 2027: Medicaid verification shifts to every six months instead of once a year.
• Jan. 1, 2027: Individuals denied Medicaid because they don’t meet work reporting requirements no longer qualify for premium tax credit under Affordable Care Act.
• Jan. 1, 2027: Medicaid and CHIP retroactive coverage period are shortened.
• Oct. 1, 2027: Changes to Medicaid provider taxes implemented.
• July 1, 2028: New requirements and application process for home- and community-based services with complex requirements begins.
• Oct. 1, 2028: Cost-sharing requirements for Medicaid enrollees begins.

You can reach Maureen Milliken at mmilliken@manchesterinklink.com.