On July 3, after prevailing by just one vote in the Senate, Congress passed the massive One Beautiful Bill Act to deliver President Trump’s domestic agenda. The One Big Beautiful Bill Act (or OBBBA) is not just a tongue-twister, but also significantly impacts nearly every corner of American life.
Honestly, when I first began researching the OBBBA, I struggled to get through the massive amount of information while decoding the political jargon that many are unfamiliar with. I found that breaking down into its components and focusing on each made the information more digestible and less overwhelming. So, rather than covering the entire bill in one blog post (I promise, no one wants that), I have decided to focus on just one portion of the OBBBA and its effects at a time.
In this blog post, I will break down the significant impacts of the OBBBA on the healthcare sector.
Overview
Overall, the OBBBA is a sprawling tax and spending law that extends the Trump administration’s 2017 Tax Cuts and Jobs Act and increases government spending on defense, certain forms of energy, and border security. To invest more in these areas, the bill includes tax cuts and other changes that will increase government savings. One of the most notable areas affected is healthcare.
With 71 million people currently enrolled in Medicaid, a federally and state-funded healthcare insurance program, the changes will have a substantial impact on the American healthcare system.
Medicaid Eligibility Requirements
One of the key elements of the OBBBA is the new requirements it includes for Medicaid recipients. The Act now requires Medicaid applicants ages 19 to 64 to report at least 80 hours of work or qualifying activities to be eligible for the program. However, states can require individuals to work for six months or even a year before they qualify for public benefits.
The new requirements are expected to save the government an estimated $280 billion over the next 6 years. The increased savings are due to the large number of people who would lose Medicaid coverage under the new rules.
New State Responsibilities
Due to the new requirements and shifting funding, states are now expected to take on extra responsibilities. They are now tasked with administering the changes and providing additional funding to make up for the reductions.
The changes to Medicaid work requirements are significant and will require states to make extensive modifications to their Medicaid programs. States will now have to adopt new procedures for verifying income, addresses, immigration status, and qualifying work requirements. These new procedures will require establishing new teams dedicated to evaluating and confirming each application. The estimated cost of administering Medicaid work requirement programs will range from millions to hundreds of millions of dollars per state.
The OBBBA also increased states’ responsibility in financing programs like Medicaid. Due to challenging budget deficits, some states have reduced funding or eliminated state-funded coverage programs. For example, Illinois had to end the Health Benefits for Immigrant Adults program, which served people aged 42-64, due to a lack of funding.
Marketplace and ACA Changes
For more than a decade, tens of millions of Americans who lack access to affordable coverage through a government program or their employer have relied on the marketplaces. These individuals purchase health coverage, often with financial assistance from the government to lower their monthly costs. In 2025, over 24 million people used the marketplaces to enroll in coverage, with over 90% of enrollees receiving federal tax credits. The OBBBA includes many changes that will result in about 3 million marketplace enrollees becoming uninsured.
One of the significant changes is the elimination of automatic reenrollment for individuals who receive premium tax credits. In 2025, nearly 11 million individuals enrolled through automatic or passive reenrollment. The OBBBA requires enrollees to submit updated information on an annual basis, resulting in a new administrative burden and significantly higher premiums for those who fail to reenroll. The Act also shortens the yearly open enrollment period from November 1-January 15 to November 1-December 15 for all marketplaces. This change may seem minor, but in 2025, 40% of enrollees enrolled after December 14.
Who will be most impacted?
The changes to Medicaid and the marketplaces will have the most direct impact on the vulnerable communities that rely on them. Medicaid traditionally serves a diverse population of low-income individuals, including people ages 65 and older, pregnant women, children, adults, and individuals with disabilities.
The bill will also put rural hospitals at risk. Rural hospitals have been dependent on Medicaid, as most of their patients rely on it to pay their medical bills. According to Chartis, an organization dedicated to transforming healthcare, approximately 2,086 rural hospitals received $12.2 billion annually in net revenue from Medicaid as of May 2025. The cut in federal funding, combined with the increase in the number of individuals who will be uninsured, could lead to the closure of many rural hospitals.
Conclusion
The One Big Beautiful Bill Act includes many major changes to federal funding in the United States, promising to substantially alter the operation of many financial and political systems. The healthcare industry and millions of Americans have relied on Medicaid for decades, and it remains unclear how this scenario will ultimately unfold. While the bill does increase government savings, it is essential to recognize that millions of people will lose healthcare coverage to pay the cost. The changes in the OBBBA aren’t just abstract policy; they profoundly impact vulnerable communities. The full impact of these reforms will become clearer, especially as states implement the new requirements and the country adjusts to the changes.
This article was written by our summer intern Clara Ricketts. Clara is a rising sophomore at The University of Texas at Austin’s Moody College of Communication and is pursuing a bachelor’s degree in Corporate Communications Studies.