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H.R.1

In July 2025, Congress passed the H.R. 1, or the One Big Beautiful Bill Act (OBBBA), which enacted sweeping healthcare policy changes. Among these are significant changes to the Medicaid program, which fundamentally modify 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 / Community Engagement (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. Requirement for States to establish Medicaid community engagement requirements for certain individuals. 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)
Interim final rule with comment period
(6/3/2026)

CMS released an interim final rule with comment period, "Community Engagement Requirement for Certain Individuals" on June 3, 2026. Comments are due July 31, 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, outpatient hospital services, nursing facility services, or qualified practitioner services at an academic medical center 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)
Proposed rule (5/20/2026)

CMS released a proposed rule, "Medicaid Managed Care State Directed Payments and Medicaid Fee-for-Service Targeted Medicaid Practitioner Payments" on May 20, 2026. Comments are due July 21, 2026.

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.

Budget neutrality for Sec. 1115 Medicaid demonstration waivers (Sec. 71118)

The CMS Chief Actuary must certify that a Sec. 1115 project is not expected to result in an increase in the amount of federal Medicaid expenditures compared to the amount that such expenditures would otherwise be in the absence of such project. HHS secretary can take state savings into account when renewing Medicaid demonstration projects.

January 1, 2027

State Medicaid Director Letter
(6/11/2026)

CMS intends to release a proposed rule to facilitate the Chief Actuary’s certification of budget neutrality.

Moratorium on implementation of rule relating to eligibility and enrollment in Medicare Savings Programs (Sec. 71101)

Prohibits the Secretary from implementing, administering, or enforcing certain provisions in a September 2023 final rule that have not yet taken effect until October 1, 2034.

Upon enactment.

CBO estimates this provision will reduce federal Medicaid spending by $66 billion over 10 years. This provision is not expected to impact the number of people who are uninsured.

Moratorium on implementation of rule relating to eligibility and enrollment for Medicaid, CHIP and the Basic Health Program (Sec. 71102)

Prohibits the Secretary from implementing, administering, or enforcing certain provisions that have not yet taken effect in an April 2024 CMS final rule until October 1, 2034.

Upon enactment.

CBO estimates this provision will reduce federal Medicaid spending by $56 billion over 10 years and will increase the number of people who are uninsured by 400,000 in 2034.

Ensuring deceased individuals do not remain enrolled (Sec. 71104)

Requires states to review the Master Death File at least quarterly to determine if any enrolled individuals are deceased.

January 1, 2027

CBO estimates this provision will not affect federal Medicaid spending over 10 years. This provision is not expected to impact the number of people who are uninsured.

Ensuring deceased providers or suppliers do not remain enrolled (Sec. 71105)

Requires states to conduct checks at provider enrollment or reenrollment and on a quarterly basis of the Social Security Administration’s Death Master File to determine whether providers enrolled in Medicaid are deceased.

January 1, 2028

CBO estimates this provision will not affect federal Medicaid spending over 10 years. This provision is not expected to impact coverage.

Payment reduction related to certain erroneous excess payments under Medicaid (Sec. 71106)

Requires HHS to reduce federal financial participation to states for identified improper payment errors related to payments made for ineligible individuals and overpayments made for eligible individuals.

Expands the definition of improper payments to include payments where insufficient information is available to confirm eligibility.

October 1, 2029

CBO estimates this provision will reduce federal Medicaid spending by $8 billion over 10 years and will increase the number of people who are uninsured by 100,000 in 2034.

Revising home equity limit for determining eligibility for long-term care services under the Medicaid program (Sec. 71108)

Reduces the maximum home equity limits to $1,000,000 regardless of inflation.

Allows states to apply different requirements for homes that are located on farms.

January 1, 2028

CBO estimates this provision will reduce federal Medicaid spending by $195 million over 10 years. This provision is not expected to impact the number of people who are uninsured.

Restricting Immigrant Eligibility for Medicaid and CHIP (Sec. 71109)

Restricts the definition of qualified immigrants for purposes of Medicaid or CHIP eligibility to Lawful Permanent Residents (“green card” holders), certain Cuban and Haitian immigrants, citizens of the Freely Associated States (COFA migrants) lawfully residing in the US, and lawfully residing children and pregnant adults in states that cover them under the ICHIA option.

Provides $15 million in implementation funding for FY 2026.

October 1, 2026

CBO estimates this provision will reduce federal Medicaid spending by $6 billion over 10 years and will increase the number of people who are uninsured by 100,000 in 2034.

Expansion FMAP for emergency Medicaid (Sec. 71110)

Limits federal matching payments for Emergency Medicaid for individuals who would otherwise be eligible for expansion coverage except for their immigration status to the state’s regular FMAP.

Provides $1 million in implementation funding for FY 2026.

October 1, 2026

CBO estimates this provision will reduce federal Medicaid spending by $28 billion over 10 years. This provision is not expected to impact coverage.

Moratorium on implementation of rule relating to staffing standards for long-term care facilities under the Medicare and Medicaid programs (Sec. 71111)

Prohibits the Secretary of Health and Human Services from implementing, administering, or enforcing the minimum staffing levels required by the final rule until October 1, 2034.

Upon enactment.

CBO estimates this provision will reduce federal Medicaid spending by $23 billion over 10 years. This provision is not expected to impact coverage.

Federal payments to prohibited entities (Sec. 71113)

Prohibits federal Medicaid funds to be paid to providers that meet the following criteria on October 1, 2025: are nonprofit organizations, essential community providers primarily engaged in family planning services or reproductive services, provide for abortions outside of the Hyde exceptions and received $800,000 or more in payments from Medicaid in 2023; this would affect Planned Parenthood and other Medicaid essential community providers.

Provides $1 million in implementation funding for FY 2026.

Upon enactment for 1 year; implementation is currently blocked for some providers due to ongoing litigation.

CBO estimates this provision will increase federal spending by $53 million over 10 years. This provision is not expected to impact coverage.

Requirement for States to establish Medicaid community engagement requirements for certain individuals (Sec. 71119)