Impact of Trump's "Big Beautiful Bill" on Medicaid

President Trump’s “Big Beautiful Bill” includes the most significant cuts to Medicaid since the program’s inception in the 1960s, with far-reaching consequences for millions of Americans, including Californians .

The Senate-passed version of the bill would cut approximately $1 trillion from Medicaid over the next decade, potentially leaving 11.8-17 million Americans uninsured by 2034 according to Congressional Budget Office estimates . These cuts come through several key provisions that will fundamentally alter Medicaid eligibility, administration, and funding.

Key Medicaid Cuts in the Bill

1. Work Requirements and Increased Eligibility Verification

New national work mandate: Able-bodied adults aged 19-64 must work, volunteer, or attend school/training for at least 80 hours/month to maintain coverage, applying to both childless adults and parents of children over 14 (House version applied only to childless adults) .
More frequent eligibility checks: States must verify eligibility twice annually instead of once per year, beginning in 2027 .
Exemptions: Available for pregnant women, disabled individuals, and parents of children under 14, but exempt individuals must still submit paperwork proving their exemption status .

2. Provider Tax Limitations

The bill caps and gradually reduces the provider taxes states can levy on hospitals and health plans (from 6% to 3.5% by 2032 in expansion states), which are currently used to draw down federal Medicaid matching funds .
This change would reduce federal Medicaid spending by $375 billion over a decade .

3. Reduced Benefits and Increased Costs for Enrollees

New copays: Expansion enrollees (100-138% of poverty level) could be charged up to $35 for certain medical services (excluding primary care, mental health, and substance abuse treatment) .
Limited retroactive coverage: Reduced from 3 months to 1 month .
Home equity limits: Applicants with home equity over $1 million (not adjusted for inflation) would be ineligible .

4. Planned Parenthood and Gender Transition Care Restrictions

Both House and Senate versions would strip Planned Parenthood of Medicaid reimbursements (1-year ban in Senate version, 10-year in House) .
House version prohibits Medicaid coverage for gender transition care for all ages; Senate version removed this provision .

National Impacts

Coverage Losses

The CBO estimates 11.8 million would lose Medicaid coverage by 2034, with 17 million potentially uninsured when combined with other policy changes .
Older adults (50-64) are particularly vulnerable due to age discrimination, health issues, and caregiving responsibilities that may prevent meeting work requirements .

Health System Strain

Rural hospitals at risk: Over half of rural hospitals could face funding cuts exceeding 20%, potentially leading to closures .
Nursing homes: Medicaid covers 63% of nursing home residents; cuts could force facilities to reduce beds or close .
Increased uncompensated care: Hospitals may see $63 billion in additional costs from uninsured patients .

Administrative Burden

States must create new systems to verify work hours and exemptions, with estimated administrative costs of $25-50 billion nationwide .

FOR EXAMPLE – California-Specific Impacts

Coverage Threats

California expanded Medicaid under the ACA (Medi-Cal), covering over 15 million residents—about 40% of the state’s population .
The California Medical Association warns cuts would “result in millions of Californians losing their health care coverage” with “devastating consequences for patients” .
State budget documents indicate California would need to absorb billions in additional costs to maintain current coverage levels .

Safety Net at Risk

Governor Newsom’s signed budget aims to “preserve vital safety net programs” including Medi-Cal, but acknowledges “significant fiscal pressures” from federal cuts .
Planned Parenthood serves over 800,000 Californians annually; loss of Medicaid funding could reduce access to reproductive and preventive care .

Rural Health Challenges

36 California counties have critical access hospitals that rely heavily on Medicaid .
The $25 billion national rural hospital fund (increased to $50 billion in final Senate version) would be insufficient to offset losses, potentially forcing closures in the Central Valley and Northern California .

State Budget Pressures

California would lose billions in federal Medicaid matching funds, forcing tough choices between cutting benefits, reducing provider rates, or finding new state revenue .
The state is proactively expanding CalRx (state drug manufacturing) and protecting reproductive care access in anticipation of federal cuts .
This is just one state. Many red states are going to be worse off.

Implementation Timeline

Most provisions would phase in starting in 2027, though some states could implement work requirements earlier through waivers . The House is scheduled to vote on the Senate-passed bill on July 2, with President Trump expected to sign it before July 4 if passed .

These Medicaid cuts represent the largest rollback of health coverage in U.S. history, with disproportionate impacts on low-income families, older adults, rural communities, and states like California that expanded Medicaid .

While proponents argue the changes promote work and reduce waste, health experts warn they will lead to avoidable deaths, increased medical debt, and systemic strain on the health care system .