Medicare & Medicaid

How the One Big Beautiful Bill Affects Medicaid Recipients


Signed into law on July 4, 2025, the One Big Beautiful Bill Act introduces sweeping changes to Medicaid:

  • For the first time, able‑bodied adults aged 19–64 are required to work, volunteer, attend school, or engage in community service for at least 80 hours per month to qualify or maintain eligibility.
  • Exemptions apply to those who are medically frail, pregnant or postpartum, caregivers of children under age 14, veterans with disabilities, and American Indians.
  • States must verify compliance before enrollment and during renewals every six months, while some may implement more frequent “look‑back” intervals.
  • Medicaid expansion enrollees with incomes between 100 %–138 % of the federal poverty level (FPL) face $35 copays per service.
  • Eligibility must now be checked semi‑annually (instead of annually), and retroactive coverage is reduced to one month.
  • Other provisions: limit provider taxes, restrict funding for nonprofits providing abortion care or gender‑affirming services, tighten access for immigrants, and bar pharmacy benefit managers from spread pricing.

What Does “100% FPL” Mean?
The Federal Poverty Level (FPL) is a measure of income set by the federal government to determine eligibility for programs like Medicaid. For example:

  • In 2025, the FPL for a single adult is about $15,060/year.
  • Therefore, 138% of FPL equals about $20,773/year.
  • If a single adult earns between $15,060 and $20,773 per year, they may have to pay up to $35 per service under the new rules.

Requirements Recipients Must Meet (or Be Exempt)
To retain Medicaid benefits, the typical able‑bodied adult must:

  1. Engage in ≥ 80 hours/month of approved activity (work, training, volunteering, or school).
  2. Submit proper documentation before enrollment and during renewals.
  3. Maintain exemption documentation if eligible for exception status.

Missed reporting—even for a single month without exemption—can lead to loss of coverage.

Which States Have Tried Work Requirements—and What Happened?
Arkansas (2018–2019)

  • First state to implement a Medicaid work requirement: adults aged 30–49 had to log 80 hours monthly.
  • Within months, 18,000+ people lost coverage (~25 % of targeted group), largely due to failure to report or confusion—not lack of work or exemptions.
  • No measurable increase in employment; most enrollees already met requirements or were exempt.
  • Program halted by federal court in March 2019.

Georgia (“Pathways” Program) – Since July 2023

  • Applied to adults and childless adults with incomes up to 100 % FPL.
  • Enrollment has been extremely low: only ~7,500–8,100 people of an estimated 240,000 were enrolled as of mid‑2025.
  • Complex online reporting, limited outreach, and technical glitches discouraged participation.
  • State has spent tens of millions on consulting and implementation for very limited impact.

Key takeaway: Both Arkansas and Georgia have shown that work requirements do not increase employment but do result in significant losses in coverage due to administrative barriers.

Pros and Cons: Taxpayer and Recipient Perspectives

Perspective Pros Cons
Taxpayers / policymakers • Potential long‑term savings (~$300–344 billion over a decade)
• Introduces accountability: aligns benefits with labor contribution
• Aims to reduce fraud, streamline eligibility		 • May increase uninsured population, shifting costs to emergency care
• Burdens states with complex implementation costs and bureaucracy
• Not clear that work requirements boost jobs
Medicaid recipients • For some, structured support and potential path to employment
• Exemptions exist for vulnerable groups
• Encourages engagement/community participation		 • Many lose coverage due to reporting glitches
• Increased out‑of‑pocket costs (copays up to $35 per service)
• Administrative complexity may discourage eligible people
• Health risks from interruption of care; increased medical debt

CBO projects that 10–11 million people could lose Medicaid coverage by 2034, with roughly 5 million due directly to work requirements—and overall deficit reduction of ~$2.8–3.4 trillion over a decade.

Is It a Setback or Reform?
Advocates argue the bill is a necessary reform—designed to root out fraud, nudge individuals into productive activity, and reduce welfare dependence.

Critics contend the law reflects a rollback of health access, citing evidence from Arkansas and Georgia that work requirements cause arbitrary disenrollment without improving employment outcomes.

From a taxpayer standpoint, proponents see the One Big Beautiful Bill as a fiscal corrective—an attempt to reduce expenditures, enforce work norms, and target resources more efficiently.

From a recipient viewpoint, the same changes pose a significant threat: coverage disruptions, barriers to retention, financial strain, and poorer health outcomes.

Whether OBBBA becomes a model of fraud reduction or an instrument of exclusion will depend on how states implement it, and whether federal support ensures smooth, inclusive reporting systems.

-Phan Trần Hương-

Sources for Further Reading:

  1. KFF: Medicaid Work Requirement Provisions in the One Big Beautiful Bill
  2. Washington Post: Georgia’s Medicaid Work Requirement Experience
  3. Commonwealth Fund: What Work Requirements Mean for Medicaid Enrollees
  4. Center on Budget and Policy Priorities: Lessons from Arkansas
  5. CBO Report: Budgetary Effects of the One Big Beautiful Bill