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 Orris
Editors: Patti Boozang and Amanda Eisenberg
tl;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 Impact
H.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 outlooks. For example, states are preparing for new standards governing Section 1115 waivers beginning in 2027 while awaiting final federal policy. Once finalized in 2027, rules governing provider taxes and state-directed payments will further reshape the financing and reimbursement tools states use to support Medicaid, likely constraining state budgets in ways that will force hard choices in years to come.
For state agencies, waiting for perfect clarity is not an option. Systems must be built, notices tested, budgets written and staff trained. That creates a difficult balance: implement quickly enough to meet federal deadlines while minimizing avoidable coverage losses among people who remain eligible.
The Bottom Line
Early evidence will be crucial as certain H.R. 1 provisions take effect on Jan. 1, 2027. States should be watching not only how many people lose Medicaid coverage, but also why they lose it, who successfully receives exemptions from work reporting requirements, where providers begin reporting increases in uncompensated care and how they weather those changes.
That data — and the experiences of Medicaid enrollees themselves — can help identify avoidable losses caused by administrative friction. With implementation already underway, policymakers will not have the luxury of waiting years to understand the consequences.
And those consequences are likely to spill beyond the people who are most directly impacted by the headline-grabbing Medicaid eligibility changes. Chaos and confusion about new requirements that impact only some enrollees will could affect the entire Medicaid population as call centers and eligibility workers respond to enrollee and applicant needs. Similarly, rising uncompensated care will likely lead to crowded emergency rooms and financially strapped providers, potentially weakening the health care systems that all of us rely on in our communities.
Listen to the full conversation of The 80 Million Podcast on Spotify, Apple Podcasts or wherever you get your podcasts to hear how states are preparing for H.R. 1 amid evolving federal guidance, how the law’s effects could extend beyond those directly subject to its eligibility requirements and what early evidence will reveal about implementation in practice.
And don’t forget to subscribe to The 80 Million Podcast.
The 80 Million Editor Patti Boozang will moderate a Manatt Health webinar on Monday, Oct. 26 examining how the midterm elections could shape health care policies and priorities. To register or for more information, click here.
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