President Trump signed the OBBBA, here's what it means for Medicare, Medicaid, and the Affordable Care Act.
In addition to the changes to Social Security and the tax code, the OBBBA includes a number of provisions that will reduce access to medical coverage for Americans under Medicare, Medicaid, and the Affordable Care Act (ACA).
For instance, the Act will reduce access to both Medicaid and ACA coverage through a range of new work rules, paperwork requirements, and tighter eligibility considerations, while the delayed implementation of Medicare enrollment reforms will make it harder for low income Americans to access premium subsidies to support their coverage. Changes to ACA eligibility could likewise impact individuals on employer-provided health plans who are considering retirement before age 65, reducing access to income-based subsidies to offset their out-of-pocket costs for coverage.
According to estimates, the cuts to Medicaid alone in the OBBBA will total between $800 billion and $1.2 trillion over the next 10 years1, putting coverage for as many as 7.8 million Americans at risk2. These cuts will likely have an outsized impact on older Americans, those living in rural areas, and immigrants. That’s because 30% of Medicaid spending supports older recipients who are eligible for both Medicaid and Medicare – including more than 60% of nursing home residents for whom Medicaid is the primary payer.3 Rural areas with limited healthcare access will likely lose even more hospitals and other medical facilities.4 Meanwhile, more immigrants will lose access to care once states lose the ability to use federal funds to cover undocumented immigrants through Medicaid.
Key Changes to Medicare5
Enrollment Streamlining Rules Have Been Suspended Until 2035
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What’s Changing: The OBBBA is delaying previous reforms that would have automatically enrolled low-income seniors into programs like Medicare Savings or Medicaid dual eligible plans. States began implementing the earlier rule in Fall 2024.
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Potential Effect: Many seniors will continue missing out on benefits they’re entitled to, like premium-free Part B or reduced drug costs, due to lack of awareness or administrative burden.
New Limits to Medicare Eligibility
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What’s Changing: Under the new rules, Medicare eligibility is now restricted only to U.S. citizens, green card holders, and certain Cuban-Haitian entrants.
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Potential Effect: Previously, many legal immigrants aged 65 and older—including permanent residents—could access premium-free Medicare Part A if they or their spouse had worked in the U.S. and paid Medicare taxes for at least 40 quarters. Under the new rules, individuals outside the three above-specified categories will no longer be eligible. Current beneficiaries who no longer qualify under these restrictions will see their Medicare coverage terminated within 18 months or less.
These changes could also create ripple effects for older adults who are dual eligible for both Medicare and Medicaid, particularly as broader Medicaid cuts take effect.
Key Changes to Medicaid
New Mandatory Work and Community Engagement Requirements
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What’s Changing: Starting by December 31, 2026, all adults aged 19-64 who are receiving Medicaid benefits must complete and report at least 80 hours of work, volunteering, or education per month, unless they have a disability or are otherwise exempt.
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Potential Effect: Tens of thousands of current Medicaid enrollees – especially part-time workers or caregivers – may lose their coverage if they can’t meet these new reporting or activity requirements. The complexity of the work documentation rules in the OBBBA may confuse or discourage eligible people from reapplying for benefits.
Eligibility Redeterminations are Now Required Every 6 Months
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What’s Changing: Under the OBBBA, Medicaid expansion enrollees must re-verify their eligibility twice a year, not just once, starting after December 2026.
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Potential Effect: The increased red tape associated with this new requirement could lead to eligible individuals being dropped for missing paperwork. In addition, states with outdated technology or language barrier issues among recipients may see a spike in wrongful terminations.
New Cost-Sharing Requirements for Recipients
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What’s Changing: Starting October 1, 2028, Medicaid recipients who have incomes at or above 100% of the federal poverty level will owe up to $35 per doctor visit, capped at 5% of family income.
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Potential Effect: Many low-income Americans on Medicaid may skip care due to these new costs. Chronic care (like diabetes, asthma, or mental health visits) may become unaffordable, leading to worse long-term outcomes.
Enhanced Eligibility Verification Requirements
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What’s Changing: The OBBBA introduces stricter documentation and residency-verification requirements for Medicaid enrollees, particularly those deemed high-risk or likely to move frequently. States must collect up-to-date contact information for all enrollees by January 1, 2027, and have a system in place to prevent enrollment in two states simultaneously by October 1, 2029.
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Potential Effect: These changes could disproportionately impact individuals who frequently change addresses—such as unhoused individuals or older adults transitioning between care settings. Many risk losing coverage simply because of missed mail or paperwork errors, often without realizing they’ve been dropped or that re-verification is required.
Provider Tax and Payment Caps
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What’s Changing: States are currently able to finance their share of Medicaid spending through multiple sources, including state general funds, healthcare related taxes (aka provider taxes), and local government funds. Under the OBBBA, states will no longer be allowed to implement new provider taxes, and existing ones must be capped between 3.5% and 6%. Additionally, the law limits Medicaid provider payments to no more than 100% of Medicare rates, or 110% for states that did not previously expand Medicaid.
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Potential Effect: These limits may reduce provider revenue and discourage participation in Medicaid. As a result, beneficiaries—particularly those in rural or underserved communities—could face fewer available providers and reduced access to care.
Key Changes to the Affordable Care Act
Pre-Enrollment Verification of Eligibility for Premium Tax Credit and Other Cost Savings
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What’s Changing: Beginning after December 31, 2027, new enrollees in ACA healthcare plans will need to verify their eligibility before enrollment to receive any premium tax credits or cost-sharing reductions. The requirements include the verification of income, immigration status, health coverage status, place of residence, family size, and potentially more. This provision effectively ends auto-renewals.
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Potential Effect: As with some of the new Medicaid requirements, the paperwork and complexity related to these new requirements might convince some potential ACA customers not to apply for tax credits or cost savings.
Recapture of Excess Premium Tax Credits
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What’s Changing: Currently, if an ACA customer receives excess premium tax credits because their estimated income was lower than their actual income, they must repay the excess. However, in most cases there is a cap on these repayments that’s based on household income. Under the OBBBA, all premium tax credit recipients must repay the full amount of any excess, no matter what their income is.
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Potential Effect: Again, the risk of having to make payments on excess credits could convince some not to apply for them at all.
Reduced Access to ACA Premium Subsidies for Legal Immigrants
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What’s Changing: Legal immigrants were previously eligible to enroll in ACA Marketplace coverage and receive the same premium subsidies and cost-sharing reductions that American citizens can. In addition, these immigrants could also access ACA Marketplace coverage if their income was under 100% of the federal poverty level and they did not qualify for Medicaid due to their immigration status. The OBBBA is limiting eligibility for subsidized coverage to permanent residents, such as green card holders, and eliminating eligibility for non-qualifying immigrants beginning January 1, 2026.
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Potential Effect: This could limit healthcare availability for legal immigrants and increase what they have to pay for coverage in the open market.
What This All Means for the Future of Medicare, Medicaid and ACA
The changes under the OBBBA mean that individuals will need to stay informed on eligibility rules, pay attention to re-qualification requirements, and be aware of how their doctors networks may change over time. For lower-income Medicare enrollees, understanding your eligibility for premium subsidies will be an important cost-saver until the streamlined rules are implemented in 2035.
