Cover of The H.R. 1 Implementation Squeeze Is Here

The H.R. 1 Implementation Squeeze Is Here

The H.R. 1 Implementation Squeeze Is Here

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In this episode of The 80 Million Podcast, Manatt Health Senior Managing Director and 80 Million Editor Patti Boozang speaks with Professor of the Practice at Princeton University’s School of Public and International Affairs and State Health and Value Strategies Director Heather Howard and Manatt Health Partner Allison Orris about what H.R. 1 implementation looks like on the ground as states build against a moving target and work to minimize avoidable coverage losses.Authors: Heather Howard and Allison OrrisEditors: Patti Boozang and Amanda Eisenbergtl;dr* Last year’s reconciliation law made unprecedented cuts to Medicaid that will shape the program and our health care ecosystem for years to come. States are building against a moving target even as their implementation efforts are well underway — such as stripping Medicaid coverage from certain lawfully present immigrants as required by H.R. 1 and operationalizing work reporting requirements, more frequent eligibility redeterminations and limits on retroactive eligibility that take effect in January 2027.* States are adapting their systems and policies to major, late-breaking policy changes in the administration’s work reporting requirements rule. At the same time, they are making critical policy and budget decisions as federal rules governing Section 1115 demonstrations, provider taxes, and state-directed payments continue to evolve ahead of key implementation deadlines.* Coverage losses are a major part of the story. Rising uncompensated care and financing changes made by H.R. 1 will also put pressure on Medicaid agencies, providers and state budgets in ways that will be broadly felt beyond people enrolled in Medicaid.* This next year will generate critical evidence. Hard data could take longer but providers will soon see evidence of rising coverage losses and uncompensated care. Other early indicators — most especially enrollees’ experiences navigating new systems — can help policymakers understand how implementation is working in practice.The 80 Million ImpactH.R. 1’s Medicaid changes are arriving in waves, but states are already feeling the cumulative pressure as they prepare to implement various provisions of the law and consider how they will respond to the fallout from rising uninsurance, uncompensated care and budgetary constraints.The law cut nearly $1 trillion in federal Medicaid funding over the next decade, making major structural changes to significant parts of how the program operates. Although some of its biggest provisions do not take effect until 2027 or later — and federal guidance on some provisions is still pending — states have been working to implement these changes at record speed because of tight timelines and high stakes for their enrollees. Getting ready to implement the new Medicaid work reporting requirement in states that expanded Medicaid has garnered significant attention over the last year.There are other near-term changes that states have also been preparing for by updating eligibility systems, communicating with enrollees and providers, and by forecasting how changes will impact their budgets.Beginning Oct. 1, federal Medicaid funding was eliminated for certain categories of lawfully present immigrants. The effects could extend beyond the individuals who lose eligibility. Confusion about the new rules, coupled with new public charge rules, may discourage eligible family members, including children, from enrolling or staying covered. At the same time, the federal matching rate to help Medicaid expansion states cover the cost of emergency Medicaid services for some immigrants who are not eligible for Medicaid was reduced.More changes will arrive in January. In addition to work reporting requirements, Medicaid expansion adults will move from annual to twice-yearly eligibility redeterminations, creating two opportunities each year for eligible people to lose coverage because of paperwork problems or other administrative issues. Retroactive eligibility will also shrink from up to 90 days before application to 30 days for the expansion population and 60 days for other eligibility groups. Together, these policies could mean more medical debt for consumers and more uncompensated care for providers, who will bear the brunt of Medicaid cuts that will take effect later in 2027 and in 2028.States Are Implementing. The Rules Are Changing.States have taken steps to prepare for provisions in H.R. 1, which became law in July 2025, yet they didn’t receive firm implementation direction on work reporting requirements, for example, until June 2026. The Centers for Medicare & Medicaid Services’ interim final rule, which included a narrower reading of the medical frailty exemption, changed key policy elements states had already been building their systems, workflows and policies around.States pivoted quickly but are still awaiting guidance in other areas that will influence their programmatic plans and budget ...
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