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H.R.1

In July 2025, Congress passed the One Big Beautiful Bill Act (OBBBA), also known as H.R. 1, which enacted sweeping healthcare policy changes. Among these changes are Medicaid cuts, which fundamentally change coverage for enrollees and financing mechanisms for states.

This page is dedicated to highlighting the impact of Medicaid changes on rural health and upcoming implementation of these provisions by the Centers for Medicare and Medicaid Services (CMS).

NRHA H.R. 1 Implementation Tracker

H.R. 1 Provision

Summary

Effective Date

Current Guidance

Implementation Details

Coverage and Budgetary Impacts (Source: KFF)

Work requirements (Sec. 71119)

Enrollees aged 19-64 eligible for Medicaid under the expansion group must work, complete community service, or participate in a work program for at least 80 hours per month or be enrolled at least half-time in an educational program. Exemptions exist for certain groups of individuals.

January 1, 2027. However, states may apply for a Section 1115 waiver to begin implementation earlier or apply for a good faith waiver to delay implementation.

Informational bulletin (12/8/2025)

H.R. 1 requires CMS to issue an interim final rule by June 1, 2026.

CBO estimates this provision will reduce federal Medicaid spending by $326 billion over 10 years and will increase the number of people who are uninsured by 5.3 million in 2034.

Eligibility redeterminations (Sec. 71107)

States must conduct eligibility redeterminations every 6 months for Medicaid expansion adults. Currently, this must happen once every 12 months.

January 1, 2027.

State Medicaid Director Letter
(3/6/2026)

CMS must put forth guidance on this provision within 180 days of enactment of H.R. 1.

CBO estimates this provision will reduce federal Medicaid spending by $63 billion over 10 years years and will increase the number of people who are uninsured by 700,000 in 2034.

Retroactive coverage (Sec. 71112)

Limits retroactive coverage for Medicaid expansion population to one month prior to application and two months for the non-expansion population.

January 1, 2027.

None

CBO estimates this provision will reduce federal Medicaid spending by $4 billion over 10 years and will increase the number of people who are uninsured by 100,000 in 2034.

Provider taxes (Sec. 71115)

All new provider taxes are prohibited and any current provider taxes are frozen at current rates. Provider tax limits in Medicaid expansion states are reduced from 6% to 3.5%. Any existing arrangements exceeding 3.5% will be phased down by -0.5% annually.

Upon enactment for new or increased provider taxes. Provider taxes will be phased down in Medicaid expansion states beginning October 1, 2027.

CMS letter (11/14/2025)

CMS indicated that the agency will provide further guidance through rulemaking.

CBO estimates this provision will reduce federal Medicaid spending by $191 billion over 10 years and will increase the number of people who are uninsured by 1.1 million in 2034.

State-directed payments (SDPs)
(Sec. 71116)

Caps the payment rate for inpatient hospital services and nursing facility services at 100% of the Medicare rate in Medicaid expansion states and 110% of the Medicare rate in non-expansion states.
SDPs for rural hospitals that were submitted to CMS before July 4, 2025, may be grandfathered in at above applicable Medicare limits until January 1, 2028.

For any new SDPs, limits apply upon enactment. Phasing down of existing SDPs begins January 1, 2028.

CMS letter
(2/2/2026)

CMS indicated that the agency will provide further guidance through rulemaking.

CBO estimates this provision will reduce federal Medicaid spending by $149 billion over 10 years. This provision is not expected to impact coverage.

Requirements for provider tax uniformity waivers (Sec. 71117)

Generally, provider taxes must be broad-based and uniform and may not hold provider harmless unless states receive a waiver. This provision changes the conditions under which states may receive a waiver of the broad-based or uniform requirements.

Upon enactment. States may have a transition period of up to 3 years.

CMS final rule: Preserving Medicaid Funding for Vulnerable Populations-Closing a Health Care-Related Tax Loophole
(2/2/2026)

CMS published a final rule implementing this provision on 2/2/2026.

CBO estimates this provision will reduce federal Medicaid spending by $35 billion over 10 years and will increase the number of people who are uninsured by 100,000 in 2034.

Cost sharing (Sec. 71120)

States must impose cost sharing up to $35 for Medicaid expansion adults with incomes up to 138% of the federal poverty level. Exemptions are made for primary care and behavioral health services and services provided by federally qualified health centers, behavioral health clinics, and rural health clinics.

October 1, 2028.

None

CBO estimates this provision will reduce federal Medicaid spending by $7 billion over 10 years. This provision is not expected to impact coverage.

Verifying Enrollee Address and Other Information (Sec. 71103)

States must implement systems to update enrollee address information using reliable data sources, such as the National Change of Address Database and managed care entities. CMS must establish a system to share information with states for purposes of preventing individuals from being simultaneously enrolled in two states and requires states to submit monthly enrollee SSNs and other information to the system.

January 1, 2027.
The system for duplicate enrollment must be in place by October 1, 2029.

Informational Bulletin
(11/6/2025)

CBO estimates this provision will reduce federal Medicaid spending by $17 billion over 10 years.

Removing incentive for Medicaid expansion (Sec. 71114)

Under prior law, states that had not expanded Medicaid and chose to would receive a temporary 5% increase to their traditional match rate (FMAP). H.R. 1 removes this financial incentive.

January 1, 2026.

None

CBO estimates this provision will reduce federal Medicaid spending by $14 billion over 10 years and will increase the number of people who are uninsured by 100,000 in 2034.