A Look at OBBBA and What It Means for Our Community as it relates to Medicaid (i.e MassHealth)
Hello friends,
If you’ve been following the headlines lately, you’ve probably heard about the “One Big Beautiful Bill Act” — or, OBBBA. This sweeping federal statute, passed by the 119th United States Congress and signed into law by President Donald Trump on July 4, 2025, is the centerpiece of his second-term agenda.
Although the catchy title didn’t make it into the bill’s official language after the Senate amendment process, for today’s blog post, we will be sticking with “OBBBA” for this conversation. OBBBA is a massive piece of legislation (900 pages!), packed with literal hundreds of provisions. But today, let’s focus on Medicaid, and more specifically, what these changes might mean for folks in Massachusetts.
Medicaid: A Quick Refresher
Medicaid is one of our nation’s most important assistance programs, providing free or low-cost health insurance to millions of low-income individuals. In fiscal year 2024, about 89 million Americans — or 26% of the population — were covered at some point by Medicaid. Here in Massachusetts, we call our Medicaid program “MassHealth,” and the costs are split right down the middle: 50/50 between the state and the federal government.
What’s Changing Under OBBBA?
OBBBA brings with it over 30 different provisions related to Medicaid, and the Congressional Budget Office estimates these changes will decrease federal funding to the states by a staggering $840 billion over the next ten years. Here’s a plain-English look at the biggest changes coming our way:
1. Community Requirements:
In the past, Massachusetts expanded Medicaid to include low-income adults aged 19-64 who didn’t have disabilities or dependent children. OBBBA could shake things up by introducing new requirements, such as work obligations for some individuals. This means that some people who currently qualify for MassHealth could soon be required to work, volunteer, or attend school for at least 80 hours a month to stay eligible. There are some exceptions, but this is a big shift.
2. Restrictions on Provider Taxes:
“Provider Taxes” are health-care related assessments that states levy on providers such as hospitals, nursing homes, etc. to help fund their portion of Medicaid costs. OBBBA limits the ways states can use provider taxes to fund Medicaid. For Massachusetts, this could mean searching for new funding sources or, unfortunately, having to cut back on MassHealth programs. That could translate into reduced coverage or fewer services for some residents — a tough pill to swallow.
3. Pausing the Medicare Savings Program Rule:
Normally, Medicaid funds could help eligible individuals pay for their Medicare premiums, co-pays, and other expenses through special agreements. Massachusetts has this to help low-income individuals pay for their Medicare premiums and other out of pocket expenses through MassHealth – and this was done automatically. Due to OBBBA, people will need to apply for Medicaid and Medicare separately, which may add confusion and paperwork for those who need help the most.
4. New Eligibility and Enrollment Rules:
In addition to the mandatory work requirements for adults 19-64 (with some exceptions), with OBBBA, eligibility redeterminations will now happen every six months instead of once a year, certain immigrants will no longer be included, and some 2024 regulations that made it easier to enroll in Medicaid have been rolled back. This means more frequent checks, stricter requirements, and, for some, loss of coverage.
5. State-Directed Payments (SDPs):
SDPs are extra payments states make to healthcare providers to bridge the gap between Medicaid’s payments and the true cost of care. For the first time, OBBBA sets federal caps on these payments. In Massachusetts, new SDPs can’t exceed 100% of Medicare rates, which is lower than what we’ve been able to pay in some cases. This makes it harder for the state to use supplemental payments to keep providers in business — a crucial factor for maintaining access to care.
All of this sounds unnerving, and you might be wondering when all of this will take effect. Some Medicaid-related provisions in OBBBA took effect as soon as the bill was signed into law on July 4, 2025. Others will be phased in through 2028, so changes will be rolling out over the next few years.
What Does It All Mean?
The experts are sounding the alarm: OBBBA is projected to lead to millions losing Medicaid coverage nationwide. With tighter eligibility rules, more frequent checks, and new restrictions, many who rely on MassHealth may find themselves in a tougher spot. For the state, it means less flexibility, more administrative hurdles, and a significant loss of federal funding. It’s a lot to take in, we know. As always, we will be watching closely and sharing updates as we learn more about how OBBBA will affect our community. For now, if you or your loved ones rely on Medicaid, keep an eye out for letters, notices, or changes to your coverage — and don’t hesitate to ask for help if you need it.