Executive Summary
The so-called “One Big Beautiful Bill Act” (OBBBA) makes changes to complex but crucial Medicaid financing mechanisms that are likely to force states to reduce provider payments and limit benefits. This issue brief provides an overview of state directed payments and provider taxes and explains how they interact; how states use them to support their Medicaid programs; and how the cuts to state directed payments and provider taxes that are mandated by OBBBA could reduce access to a wide variety of health services.
