HEALTHCARE HUDDLE

Medicaid Cuts Ahead: How the Big Beautiful Bill Impacts Care

A patient with COPD misses a few appointments. She runs out of her inhaler. She ends up in the emergency department—again. Why? She lost her Medicaid coverage because she didn’t report 80 hours of work online.

That kind of story could become a lot more common.

On May 22, Congress approved the “Big Beautiful Bill,” a $1.7 trillion federal spending cut. Nearly half of those cuts target public health insurance—specifically Medicaid and ACA Marketplaces.

In this article, I’ll break down what the bill actually says about insurance, how much it cuts, and what it could mean for patients, physicians, and the hospitals we work in.

The Deets: The Big Beautiful Bill

On May 22, Congress approved the “Big Beautiful Bill” aiming to shave $1.7 trillion off federal spending. Nearly half of that comes from changes to Medicaid and the ACA Marketplaces. According to the CBO, those insurance tweaks alone should save about $793 billion over ten years.

Below are the five biggest money-savers, with a quick rundown of what each actually does:

1. Work Requirements ($344 billion): Adults who got Medicaid through ACA expansion must prove 80 hours of work or community service each month. Miss the paperwork, lose coverage.

2. Tougher Medicaid Paperwork ($167 billion): The bill rolls back recent “simplify Medicaid” rules, so enrollment and renewals get harder and more people slip through the cracks. (I dug into renewal headaches here.)

3. No More New “Provider Taxes” ($89 billion): States can’t add or hike the hospital and nursing-home taxes they use to pull in extra federal match dollars. With that lever gone, Medicaid budgets tighten and provider payments likely shrink.

4. State-Directed Payment Caps ($72 billion): Future boost payments in Medicaid managed care can’t exceed Medicare rates (100 % in expansion states, 110 % elsewhere), cutting off today’s higher add-ons.

5. More Frequent Eligibility Checks ($64 billion): States must verify expansion adults’ eligibility more often, nudging people off the rolls faster when paperwork lapses.

In one sentence: the bill narrows who can get Medicaid, shortens how long they can keep it, and squeezes the dollars states and providers earn for caring for Medicaid patients.

The Potential Impact

The CBO says the bill’s Medicaid and Marketplace changes would leave about 11 million more people uninsured by 2034—7.8 million from Medicaid alone. If Congress also lets the enhanced ACA premium tax credits lapse after 2025, the uninsured tally could swell to roughly 16 million.

Regarding hospital finances, by blocking new provider taxes and capping state-directed payments, the bill removes two of the biggest funding levers safety-net systems lean on. Rural and public hospitals are especially exposed—Medicaid dollars shrink just as uncompensated-care costs rise. Expect many states to freeze or cut Medicaid rates to offset the gap, which usually means tighter provider networks, longer wait times, and another bump in medical debt for low-income patients.

Dashevsky’s Dissection

The so-called “Big Beautiful Bill” savings come from cutting coverage and payment pipelines, not from streamlining care or making the system more efficient. Patients lose insurance, providers lose revenue, and there’s little to no evidence anyone gains stable employment in return.

When patients lose insurance, they lose access to healthcare. Period. The U.S. system is too expensive to navigate without coverage. That means interrupted cancer treatment, unmanaged chronic diseases, and postponed acute care. It’s as if policymakers are treating insurance coverage like a job you can be laid off from—when in reality, it’s the foundation for health.

And where do uninsured patients go for care? The emergency department is where millions will turn to, even though the ED is designed for managing chronic disease. There’s no continuity of care. It’s reactive, not proactive. It’s expensive. And someone has to foot the bill.

Usually, that someone is the hospital—especially nonprofit hospitals with charity care obligations. But with fewer Medicaid reimbursements coming in, how do we expect hospitals to keep up? Many are already scraping by, making just $1 to $5 in profit per $100 spent.

Now, back to the root issue: work requirements. They simply don’t work. Arkansas was the first state to roll out Medicaid work requirements. Within months, nearly 17,000 people lost coverage. Medicaid or ACA marketplace coverage among 30-to-49-year-olds in the state dropped by ~7 percentage points. And did employment go up? No—there was no statistically significant change in employment levels. In fact, almost 97% of those targeted by the policy already met the requirements or should’ve been exempt.

The real problem is bureaucracy. One-third of affected enrollees hadn’t even heard of the policy. Nearly half weren’t sure it applied to them. And many of those kicked off Medicaid were simply confused about how to report their compliance. In the end, the coverage losses were because people got lost in the paperwork.

So, overall, here’s what to expect if you’re a physician:

• You may see more uninsured patients with lapses in care.

• Expect tighter hospital budgets and longer wait times.

• Coverage confusion could spike patient no-shows and medication nonadherence.

In summary, the “Big Beautiful Bill” aims to cut nearly $800 billion from Medicaid and ACA coverage by tightening eligibility, increasing paperwork, and slashing provider payments. The result? Millions may lose insurance, hospitals will face more uncompensated care, and physicians will see the downstream effects—more fragmented care, higher patient acuity, and greater strain on already thin safety nets.

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