On July 4th, President Trump signed H.R. 1, the One Big Beautiful Bill Act, into law. The 330-page act contains provisions that will reshape nearly every sector of the American economy and society. The rushed passage and sweeping scope of H.R. 1 have left many wondering:

What’s actually in the bill and how will it affect me?

At Plural, this opacity strikes directly against our mission. From our open data to our AI bill summarizer trained specifically on legislative text, we strongly believe in the power of technology to unlock legislative insights for policy professionals, activists, and citizens alike. With this mission in mind, we are producing a series of One Big Beautiful Bill explainers. Within each explainer, we will dive into the megabill’s impact in a specific subject area with a text-first approach that pulls impacts directly from the bill. This week we take a look at how the new law will impact American healthcare.

Healthcare policy in the United States is a subject of significant division and impact. Healthcare spending accounts for nearly 20% of the country’s economy and the share of Americans with favorable views on US healthcare coverage and quality has steadily decreased over the past fifteen years. 

Since the passage of the Affordable Care Act (ACA) in 2010 federal efforts to radically shift how Americans access and pay for healthcare have stalled. Republicans eventually abandoned serious ACA repeal efforts after the first Trump Administration and debates over Medicare-for-all or a “public option” during the 2020 Presidential campaign never materialized into enacted policy for Democrats. 

In fact, H.R. 1 may arguably be the most impactful legislation related to healthcare coverage passed since the ACA. 

The Congressional Budget Office’s recently released final score of the new law estimated 10 million Americans will lose health insurance due to its provisions. Relatedly, much of the last-minute consternation from opponents of H.R. 1 centered on its potential to impact small, rural hospitals and their communities. 

We expect the law’s healthcare impacts to be central to ongoing conversations as its provisions come closer to going into effect, and as lawmakers debate their efficacy ahead of the 2026 midterms. As such, it’s vitally important to understand just how this law reshapes America’s healthcare landscape, and how lawmakers may still act to change the law in the coming years. 

Below you’ll find an analysis of some of the most impactful healthcare provisions within President Trump’s signature legislative package.

Medicaid Changes

The tax cuts and spending in H.R. 1 are partially offset through an estimated $1 trillion in projected federal health care spending. Much of this is as the result of changes to Medicaid policy that will limit the benefits of the program and also tighten eligibility. 

Amidst all the complexity, these savings generally fall into three categories: 1) reducing the number of beneficiaries on Medicaid, 2) reducing the amount Medicaid pays providers, and 3) reducing the amount the federal government reimburses state Medicaid plans. These changes largely sit within Subtitle B, Chapter 1 of the new law. 

Eligibility Reductions

In addition to requirements to more rigorously enforce existing eligibility requirements (discussed below) the law makes two major changes to eligibility requirements for Medicaid programs. 

First, and most notably, the law would implement requirements that most “able-bodied” adults must work (or participate in other community engagement activities like job training) 80 hours per month to be eligible for Medicaid. This requirement is expected to result in eligibility reductions that would save more than $300 billion over ten years. 

Second, the law will cancel Medicaid eligibility for certain lawfully present immigrants (including asylees and refugees). 

Delay Rulemaking Intended to Streamline Medicaid Enrollment

Sections 71101 and 71102 of the new law place a 9-year moratorium on the implementation of two Biden-era rules that would have made Medicaid enrollment easier (and automatic in certain circumstances) especially for Medicare beneficiaries. 

The law, and its proponents, claim these rules opened the programs to fraud and made it more difficult to remove ineligible enrollees from Medicaid. Opponents argue the rules were intended to streamline the enrollment process by addressing known roadblocks in the current system that prevented individuals from receiving the benefits they were eligible for. 

New Requirements for State Medicaid Administrators Aimed at Reducing Enrollment

The new law also creates savings through requirements that state Medicaid plans implement measures to more regularly track and remove ineligible individuals from their rolls. These requirements include:

• Regular checks to remove deceased individuals and providers
• Collaboration with the Department of Health and Human Services to flag individuals enrolled in multiple state Medicaid programs for removal
• More frequent eligibility redeterminations (to determine whether individuals remain eligible based on income changes) 

Changing What Medicaid Will Pay Providers

The law restricts Medicaid payments to providers in a number of specific circumstances:

• Section 71112 changes current policy that allows most Medicaid beneficiaries to receive coverage for medical bills incurred in the three months prior to gaining coverage. Under the new law those who access coverage because of ACA Medicaid expansion will have one month of retroactive coverage and others will have two months. 
• Section 71113 prohibits Medicaid payments to certain large providers of family planning and reproductive services that provide abortions for one year.

Reducing Federal Reimbursement for Certain Medicaid Costs

As part of the ACA, the federal government incentivized state expansion of Medicaid programs by increasing the FMAP (the share of Medicaid costs the federal government will cover) for expansion populations to 90% (most state FMAPs sit around 70% for traditional Medicaid populations). The new law eliminates the incentive for states that have not expanded Medicaid from doing so. Additionally, H.R.1 will reduce a similarly expanded FMAP in place to support Medicaid coverage for individuals that would be eligible for coverage if not for their immigration status. 

Taken together, these provisions disincentivize state actions to expand their Medicaid programs and leave states that have expanded coverage to immigrants with less federal support. 

Provider Tax

Provider taxes, also known as provider assessments, are fees that states collect from healthcare providers to help fund their share of Medicaid costs. Providers generally support these taxes as they receive some of the money back through increased reimbursement rates.

Under H.R. 1, provider taxes will be frozen at their current levels, disallowing a tool that states and providers use to generate revenue. Further, in Medicaid expansion states “hold harmless” thresholds that currently allow states to avoid restrictions on provider taxation will be lowered from 6% to 3.5%. This restriction on a commonly used tool to fund the state share of Medicaid expansion costs will require expansion states to make hard choices in the coming years to determine how to, or whether to, fund their expansion programs. 

Support for Rural Hospitals

Policymakers have been raising alarms about the financial viability of rural hospitals for quite a while now. The changes described above are expected to disproportionately impact rural hospitals, partly due to their patient populations generally relying more on Medicaid and Medicare. In response to these concerns, the authors of H.R. 1 added $50 billion in funding over five years to support “rural health transformation plans”. 

Medicare Changes

Relative to the scale of changes made to the Medicaid program, there are relatively few major changes to Medicare within H.R. 1. Those that made it into the final bill include:

• Section 71201 places a restriction on Medicare eligibility based on citizenship status. Medicare eligibility was eliminated for individuals with temporary protected status, refugees, and asylees. 
• Section 71202 makes a temporary payment increase under the Medicare physician fee schedule. 
• Section 71203 amends exclusions within the Medicare drug price negotiation program to further exclude “orphan drugs”. 

ACA Marketplace Changes

The bill makes a number of changes to the individual insurance marketplace set up by the ACA. These changes generally tighten accessibility within the marketplace and reduce the use of the premium tax credit, an income-based tax credit that helps individuals afford coverage.

• Similar to changes made to Medicaid and Medicare, the law limits access to the premium tax credit based on citizenship status thereby removing a valuable ACA tool for certain families. 
• Sections 71303 through 71305 limit the use of the premium tax credit by expanding eligibility verification requirements before enrollment. 

Conclusion

Over the next five to ten years, as the provisions described above come into effect, a significant portion of the American healthcare landscape will be impacted. 

The changes to coverage enrollments, reimbursements, and financing options will force healthcare providers and policymakers to find new ways to ensure care is available and affordable. 

These impacts could require providers to demand more from private insurers, which will increase rates for individuals not on government plans. In this way, the impact of 10 million individuals losing health care coverage could produce changes throughout the healthcare ecosystem. 

With many of these changes due to take effect in the coming years, debates over their impact will not go away. In fact, we should expect to see earnest efforts to reverse these changes as soon as 2027 if the makeup of the House and Senate shifts following the midterm elections. Plural will be closely following these debates as they happen and we encourage you to follow along in Plural as well!