The recently enacted One Big Beautiful Bill Act (OBBBA) includes significant Medicaid provisions that could reshape eligibility, funding, and coverage across the country. While some changes will have minimal immediate impact on home-based care, others could influence funding levels, state Medicaid budgets, and future access to home- and community-based services (HCBS).

Below is a detailed overview of the Medicaid-related provisions, organized by category with key takeaways, courtesy of our partners from the Partnership for Medicaid Home-Based Care.

Delays to Biden-Era Medicaid Regulations

The bill delays, but does not rescind, several finalized Medicaid regulations, pushing implementation to fiscal year (FY) 2035. While no immediate impact is expected for home-based care, these delays reduce near-term coverage expansions and program improvements.

• Medicare Savings Program Eligibility Rule Delay: Delays the Streamlining Medicaid and Medicare Savings Program (MSP) Eligibility Determination and Enrollment rule, potentially reducing participation in MSPs that assist low-income Medicare beneficiaries with premiums and cost-sharing. Estimated savings total $85 billion over 10 years.
• Medicaid Eligibility & Enrollment Rule Delay: Delays implementation of streamlined enrollment and renewal processes for Medicaid, the Children’s Health Insurance Program (CHIP), and Basic Health Program (BHP), allowing states to maintain stricter eligibility processes. Estimated savings total $82 billion over 10 years.
• Long-Term Care Staffing Requirements Delay: Delays minimum staffing standards for long-term care facilities until FY 2035. Estimated savings total $23 billion over 10 years.

The potential impact of these delays slow down improvements in enrollment efficiency and long-term care standards, with potential future impacts on access and care quality for home care clients transitioning between settings.

Medicaid Work Requirements and Cost-Sharing

New work requirements and cost-sharing provisions primarily target adults enrolled through Medicaid expansion and are expected to reduce enrollment substantially.

• Work/Community Engagement Requirements: Requires Medicaid enrollees aged 19-64 to meet work or community engagement conditions starting December 31, 2026. States may seek a “good faith effort” exemption through 2028 if implementation challenges arise. Estimated savings total $326 billion over 10 years, with five million individuals estimated to lose Medicaid coverage as a result.
• Increased Medicaid Cost-Sharing: Increases cost-sharing obligations for expansion adults with incomes over 100% of the federal poverty level (FPL), effective October 1, 2028. Providers may refuse care for non-payment. Estimated savings total $7 billion over 10 years.

While most HCBS users are exempt, some expansion enrollees receiving home-based care, as well as direct care workers relying on Medicaid for their own health insurance, could be affected. Implementation burdens and erroneous application to exempt populations remain concerns for advocacy.

Medicaid Regulatory Reforms

The bill imposes a series of regulatory changes aimed at reducing Medicaid spending, often by increasing eligibility verification burdens.

• Address Verification Requirement: Requires states to establish address verification systems by October 1, 2029. Estimated savings total $17 billion over 10 years.
• Deceased Enrollee and Provider Screening Rules: Modest administrative changes to improve accuracy of enrollments and payments. Estimated savings total <$500,000 each over 10 years.
• Elimination of “Good Faith” Waiver: Removes the Centers for Medicare & Medicaid Services (CMS) authority to waive disallowances due to a state’s good faith compliance efforts, effective FY 2030. Estimated savings total $8 billion over 10 years.
• Limits Eligibility for Certain Immigrants: Restricts Medicaid access for certain immigrant populations beginning October 1, 2026. Estimated savings total $6 billion over 10 years.
• Six-Month Eligibility Redeterminations: Requires semiannual eligibility redeterminations for Medicaid expansion adults starting in 2027. Estimated savings total $63 billion over 10 years.
• Home Equity Limit Revision: Tightens home equity limits for long-term care eligibility. Estimated savings total $195 million over 10 years.
• Retroactive Coverage Reduction: Reduces retroactive Medicaid eligibility for adults and children from three months to one month. Due to advocacy, recipients utilizing HCBS retain two months of retroactive coverage. Estimated savings total $4 billion.
• Reduced Federal Medical Assistance Percentage (FMAP) for Emergency Services: Lowers the federal Medicaid match rate for emergency services provided to undocumented immigrants. Estimated savings total $29 billion over 10 years.

The potential impact of increased redeterminations and verification requirements may disrupt coverage for direct care workers enrolled in Medicaid, while changes to retroactive coverage affect financial protections for individuals entering home-based care services unexpectedly.

Provider Tax and State Directed Payment Reforms

These provisions reduce states’ ability to generate matching funds for Medicaid, threatening state budgets and potentially leading to cuts in provider rates or eligibility.

• Phase-Down of Provider Tax Cap: Reduces the allowable provider tax cap from 6% to 3.5% by 2032 in Medicaid expansion states. Estimated savings total $191 billion over 10 years.
• Revised Limits on State Directed Payments (SDPs): Caps SDPs at Medicare rates in expansion states and 110% of Medicare rates in non-expansion states, phasing in with 10% annual reductions starting in 2028. Estimated savings total $149 billion over 10 years.
• Uniform Tax Waiver Rules: Tightens definitions for “generally redistributive” health care taxes, aligning with previous CMS proposals. Estimated savings total $35 billion over 10 years.
• Ends 5% FMAP Bonus for New Expansion States: Applies prospectively, preserving existing bonuses. Estimated savings total $14 billion over 10 years.
• Budget Neutrality Requirement for Section 1115 Waivers: Requires CMS to certify that new demonstration waivers are budget-neutral starting in 2027. Estimated savings total $3.3 billion over 10 years.

States relying heavily on provider taxes and SDPs to fund Medicaid could face budget shortfalls, threatening payment rates to HCBS providers and limiting program expansions.

HCBS Expansion

The bill introduces a new HCBS waiver authority allowing states to provide “pre-long-term services and supports” to individuals who do not meet nursing facility level of care criteria, effective July 1, 2028.

To support implementation, it allocates $50 million in FY 2026 and $100 million in FY 2027 to help states enhance their delivery systems, with funds distributed based on each state’s eligible population. This provision is estimated to increase federal spending by $6.6 billion over 10 years.

This creates an opportunity for states to expand access to home-based care services, especially where state funds are already used for similar programs. It could increase the number of individuals receiving HCBS, depending on state implementation.

Rural Provider Relief Fund

While focused primarily on hospitals, this fund may indirectly benefit home-based care in states where it stabilizes Medicaid budgets or funds partnerships.

The fund allocates $50 billion from 2026 to 2030, providing $10 billion per year. To be eligible, states must submit CMS-approved rural health transformation plans by December 31, 2025. Funds may be used for expanding provider access, adopting new technology, managing chronic diseases, developing provider partnerships, supporting clinician workforce development, and improving hospital solvency.

As a result, potential opportunities may arise for home-based care agencies to participate in state-led transformation initiatives supported by this funding.

Impact: Potential opportunities may exist for home-based care agencies to partner in state-led transformation initiatives supported by these funds.

Overall Implications for Home-Based Care Providers

The OBBBA’s Medicaid provisions aim to reduce federal spending by over $1 trillion through eligibility restrictions, state funding limitations, and reduced provider payments. While some provisions, such as the new HCBS waiver, present opportunities to expand in-home care, most changes create risks of coverage loss, increased administrative burdens, and funding constraints that could challenge the financial stability of home-based care providers.

Advocacy efforts will be essential to ensure implementation protects vulnerable populations, maintains fair access to care, and avoids unintended disruptions to the home care workforce and clients.