The big, beautiful truth about Medicaid reform
Critics of the "One Big Beautiful Bill Act" (OBBB, H.R. 1) have sounded the alarm, claiming that millions of Americans will lose health insurance, particularly under Medicaid. Many have highlighted
Rather than gutting Medicaid,
The Current Trajectory Was Not Sustainable
During the COVID-19 public health emergency, Medicaid enrollment surged due to a federal requirement that states keep recipients continuously enrolled. From 2020 to 2023, Medicaid/CHIP enrollment grew by 23.3 million, reaching nearly 95 million, primarily due to the continuous enrollment provision. However, many of those same Americans saw their incomes recover or exceed eligibility limits post-pandemic, which means they should no longer be eligible for the programs.
As a result, Medicaid now covers nearly 1 in 4 Americans and is projected to consume more than a third of many state budgets within a decade. The OBBB reduces federal spending by roughly
The "Loss" of Coverage Is Largely Administrative
The CBO projections are based largely on expected reductions in enrollment due to more frequent eligibility checks and the introduction of work requirements. But "losing coverage" under Medicaid doesn't necessarily mean being denied due to income or disability status. In many cases, it reflects failure to file paperwork or maintain enrollment in a timely manner.
For example, when
Candidly, those supporting work requirements would do well to learn from
States may be able to mitigate coverage loss by clarifying reporting requirements and providing administrative support for online portals for those with limited computer skills, better data management, and effective communications. In
Other administrative reforms include stricter documentation standards for applicants and enrollees. The OBBB seeks to reduce duplicate enrollments under Medicaid and CHIP (
Duplicate enrollment in Medicaid and CHIP across multiple states is a recognized challenge that contributes to waste, fraud, and unnecessary spending. Although states are mandated to use the Public Assistance Reporting Information System (
The OBBB attempts to tighten
Work Requirements Are Not New—and Not Unreasonable
The bill requires able-bodied adults aged 19–64 to work, attend school, train, or search for a job, or volunteer for 80 hours a month to retain non-emergency Medicaid benefits. Exemptions include caregivers, students, and those with medical conditions. Other exemptions include pregnant women, individuals who are medically unfit to work (including due to mental illness), institutionalized individuals, and
Most adults on Medicaid already work. By reinforcing that reality, the bill narrows eligibility to those who truly need the subsidy and restores Medicaid's original mission.
Originally designed to serve the poor, disabled, and elderly, Medicaid has, over time, become a default insurance option for millions of able-bodied adults, many of whom could transition to subsidized coverage through the Affordable Care Act or employer-sponsored plans.
Retroactive Coverage Limits Encourage Timely Enrollment
One misunderstood provision in the bill is the provision reducing Medicaid's retroactive coverage window from 90 days to 30 days. This means Medicaid will only reimburse providers for care received up to one month before an applicant is approved.
Critics argue that this leaves patients and hospitals exposed. However, many private insurers already operate without retroactive coverage. States like
Illegal Alien Enrollment
Many have falsely stated that the OBBB "kicks off immigrants" or bans illegal aliens. In truth, illegal aliens have never been eligible for full-scope Medicaid under federal law. Immigrants will continue to be eligible for Emergency Medicaid, as required under existing federal law (42
The OBBB tightens Medicaid eligibility rules for immigrants or reinforces or codifies restrictions already in place. The OBBB governs only federal Medicaid dollars, not state-funded health initiatives.
For example, the OBBB codifies a tighter, uniform definition of who is "lawfully present" for Medicaid, effective
As such, the BBB reaffirms that full Medicaid coverage will only be available to:
*
* Lawful permanent residents (LPRs) (green card holders with a 5-year wait)
* (COFA migrants) under the Pacific Islands Compacts of
* Continuation of carve-out for aliens granted the status of Cuban and Haitian entrant, "as defined in section 501(e) of the Refugee Education Assistance Act of 1980." Cuban and Haitian refugees are also specifically exempted from the 5-year waiting period that applies to most other lawful immigrants.
The bill also mandates stricter immigration status verification and semi-annual eligibility reviews to curb improper enrollment.
Regarding Medicaid provisions, the OBBB is far from reckless. It restores accountability to a program that has ballooned under emergency policies and administrative inefficiency. The bill closes loopholes, promotes personal responsibility, reduces duplication and waste, and seeks to ensure that Medicaid is available long-term to those who truly depend on it.
Image: Pkd2016 via



Gov. Gretchen Whitmer proposed $15M for grant program championed by donor Fay Beydoun
Vontobel Holding Ltd. Makes New Investment in Virtu Financial, Inc. (NASDAQ:VIRT)
Advisor News
- Advisors must lead the policy risk conversation
- Gen X more anxious than baby boomers about retirement
- Taxing trend: How the OBBBA is breaking the standard deduction reliance
- 6 in 10 Americans struggle with financial decisions
- New Trump administration rule seeks to bail out private equity, credit with workers’ 401(k) savings
More Advisor NewsAnnuity News
- ‘I get confused:’ Regulators ponder increasing illustration complexities
- Three ways the Corebridge/Equitable merger could shake up the annuity market
- Corebridge, Equitable merge to create potential new annuity sales king
- LIMRA: Final retail annuity sales total $464.1 billion in 2025
- How annuities can enhance retirement income for post-pension clients
More Annuity NewsHealth/Employee Benefits News
- Findings from Tufts Medical Center Has Provided New Information about Cancer (“Nothing Is as Great a Learning Experience as Getting a $15,000 Bill”A Mixed-Methods Study of Young Adult Cancer Survivors’ Experience With Insurance Coverage): Cancer
- Layin' It on the Line: The long-term care crisis in Utah: Why national plans fail here and how to shield your assets (Part 1)
- Guardian Completes Integration With FINEOS to Expand Digital Capabilities and Deliver a Simplified Leave Experience
- Your health plan may cover more during pregnancy than you think
- Wyoming's BearCare health plan for emergencies dies, for now
More Health/Employee Benefits NewsLife Insurance News
- AM Best Affirms Credit Ratings of MetLife, Inc. and Its Life/Health Subsidiaries
- Guardian Completes Integration With FINEOS to Expand Digital Capabilities and Deliver a Simplified Leave Experience
- From marathons to mountaineering: Ranking which sports and hobbies affect life insurance the most
- AMERICA'S CREDIT UNIONS HIRES VETERAN WASHINGTON ADVOCATE TO LEAD POLICY STRATEGY
- Society of Actuaries announces Clar Rosso as next CEO
More Life Insurance News