On July 4th, President Trump signed the so-called “One Big Beautiful Bill Act” (OBBBA) into law, enacting the most sweeping—and harmful—Medicaid cuts in history. The law slashes $990 billion from Medicaid over the next decade, eliminating Medicaid coverage for at least 10 million people and destabilizing the health care infrastructure. An additional 4 million people could lose coverage due to cuts to the Affordable Care Act (ACA) marketplace.
This is the second in a series of NHeLP blogs that will delve into how this new law harms access to sexual and reproductive (SRH) health. This second installment provides an overview of how OBBBA cuts to Medicaid services, eligibility and enrollment, and state financing will harm access to SRH.
Direct Attacks on Sexual and Reproductive Health Services
OBBBA blocks Medicaid funding for one year to any “prohibited entity,” defined as a 501(c)(3) non-profit essential community provider primarily engaged in family planning, offering abortions beyond the narrow Hyde exceptions, and that has received over $800,000 in Medicaid expenditures in Fiscal Year 2023.
To target Planned Parenthood, the law defines “entity” to include “affiliates, subsidiaries, successors, and clinics.” This provision affects all Planned Parenthood clinics, Maine Family Planning, and potentially others.
These clinics provide contraception, cancer screenings, STI testing and treatment, prenatal care, and other preventive care, often in rural and underserved areas. In fact, 76% of Planned Parenthood clinics are in such communities. Withholding Medicaid funds will force hundreds of these vital clinics to close, deepening health care shortages. Nearly half of U.S. women of reproductive age already live in health care shortage areas, and almost half of all counties have no OB/GYN.
Red Tape to Erode Medicaid Eligibility and Enrollment
OBBBA uses bureaucratic tactics to kick eligible people off Medicaid.
One of its most severe changes is instituting work requirements for adults 19–64 who are enrolled in Medicaid expansion. They must verify 80 hours a month of work or qualifying activities; or prove an exemption (exemptions include caregivers of dependent children 13 years of age or younger, and people who are pregnant or receiving postpartum coverage). Individuals must prove compliance at application and renewal every six months. And states must “look back” 1–3 months to confirm compliance.
This is the harshest work requirement policy ever enacted, and its impact will be devastating, particularly for people with disabilities, caregivers, and women. Research shows that work requirements don’t increase employment but instead lead to mass disenrollment of eligible people due to paperwork errors and system failures. Additionally, under OBBBA, individuals who lose Medicaid because they failed to meet the work requirements would also be barred from receiving ACA subsidies, cutting off all access to affordable health coverage.
OBBBA also reduces retroactive eligibility from 3 months to 1 month for expansion enrollees, and to 2 months for all others. Retroactive eligibility shields families from medical debt and ensures providers are paid for services. Retroactive eligibility is especially critical for pregnant people, covering essential prenatal care received before applications are approved and preventing harmful delays in critical care. Cutting retroactive eligibility will increase debt, delay treatment, raise uncompensated care costs, and threaten provider stability.
Controlling State’s Ability to Finance Medicaid
OBBBA seeks to control state budgets and limit how they fund their share of Medicaid. Forty-nine states use provider taxes to help fund their share of Medicaid. OBBBA prohibits all new provider taxes and reduces existing ones in expansion states to 3.5%. Many states use provider taxes to help fund SRH care. For example, California uses money from a tax on managed care organizations to increase reimbursement rates for family planning providers enrolled in Medicaid.
OBBBA also restricts states’ ability to use state-directed payments (SDPs). OBBBA limits expansion states SDP rates to 100% of Medicare rates and non-expansion states to 110%. Traditionally, states use SDPs to require MCOs to increase provider rates for certain types of providers, especially SRH and maternity care providers. For example, Washington uses SDPs to increase reimbursement rates for publicly funded family planning providers in order to help keep family planning clinics financially viable.
These changes could lead states to decrease reimbursement rates and drive providers out of the Medicaid program. Additionally, uncompensated care costs due to millions of newly uninsured individuals will skyrocket, pushing SRH providers to the brink. SRH clinics and maternity wards are already closing at alarming rates, particularly in rural areas. OBBBA will accelerate closures. With fewer resources, states may cut optional benefits (like prescription drugs), eliminate optional eligibility (like family planning expansion programs), and/or and reduce already-low provider reimbursement rates.
Targeting Immigrant Populations and Impacts on SRH
OBBBA cruelly targets immigrants by restricting immigrants eligible for Medicaid to green card holders (after five years), Cuban and Haitian Entrants, and migrants under the Compact of Free Association. Current eligible immigrant women depend on Medicaid for access to critical health care services, such as family planning, cancer screenings, and prenatal care.
The change will exacerbate existing health inequities. Immigrant women are three times more likely than U.S.-born or naturalized citizens to be uninsured due to existing restrictions on Medicaid eligibility. This contributes to the maternal health crisis by limiting access to prenatal and postpartum care.
Further, starting in 2026, states will no longer receive enhanced federal matching funds for emergency services provided to immigrants who would be eligible through Medicaid expansion but for their immigration status. Because hospitals are federally required to provide emergency care, this shifts the burden of uncompensated care to states, further threatening hospital sustainability.
Punishing States that Expanded Medicaid
The law punishes the 41 states (including DC) that expanded Medicaid under the ACA. Certain changes (like work requirements and caps on existing provider taxes) only apply to expansion states while other provisions apply more harshly to expansion states (like greater reduction in retroactive eligibility and lower SDP limits).
Medicaid expansion has been vital to lowering infant and maternal mortality, increasing access to essential care during pre-pregnancy, pregnancy, and postpartum periods. Yet, OBBBA directly undermines expansion. Many states may be forced to scale back or reverse Medicaid expansion, which would cause millions more to become uninsured and undermine the progress made towards addressing health disparities.
OBBBA will result in millions of individuals, particularly those with low incomes or living in underserved areas, unable to access preventive and life-saving SRH care.
