It may be big — there’s nothing beautiful about it

How Washington’s newest mega-bill creates new chaos for ACA and Medicaid-heavy providers and payors

Washington just passed what it’s calling the “One Big Beautiful Bill Act.” It’s big, all right — more than 700 pages spanning everything from tax cuts to military spending. But for payors and healthcare providers, especially those operating in Medicaid-heavy or safety-net markets, there is nothing remotely beautiful about what’s inside.

As millions of people find themselves newly uninsured, the burden for absorbing healthcare costs is squarely on the shoulders of providers. Here are five things every healthcare leader should know.

1. Medicaid work requirements are now law. Millions will lose coverage.

The bill mandates that able-bodied adults under 65 work at least 80 hours per month to keep Medicaid coverage, unless they’re caring for a child under 14. That sounds straightforward. In reality, it’s a recipe for coverage loss on a massive scale.

When Arkansas piloted a similar program in 2018, over 18,000 people lost coverage within months, not because they refused to work, but because they couldn’t navigate the red tape. The Congressional Budget Office projects this new national policy will lead to 3.5 to 4 million people losing Medicaid coverage in the coming decade.

Another coverage issue not addressed in the act is exchange subsidies that are scheduled to expire at the end of 2025. Eligibility for subsidies doesn’t just reduce the premium for the plan, it reduces the amount of out-of-pocket expense for care. Without new legislation, families living at 400% of the poverty level will pay the full premium — an increase of about $1,500 per month on average — and the full cost of care. Families between 100 and 400% of the poverty level will pay increased premiums and have higher out-of-pocket maximums. The Congressional Budget Office confirmed that 2.2 million people will lose coverage in 2026 if Congress doesn’t act.

For providers, that means a surge in uncompensated care. Patients will delay treatment until they’re in crisis, walk into the ED without coverage, and leave providers without a path to reimbursement. The AHA put it plainly: “Hospitals and health systems will be forced to absorb billions in unreimbursed costs just as we face historic labor and supply chain pressures.”

If you operate in an exchange or Medicaid-reliant market, this isn’t just a policy problem. It’s a contract, capacity, and cash flow problem.  Don’t be surprised if more organizations and physician groups walk away from Medicare Advantage, Managed Medicaid, and Exchange plans. 

We recommend planning as soon as possible, thinking through your revenue and marketing strategies to be sure they are aligned, and then making appropriate spends to offset costs in the long term. We also recommend looking into where AI can provide administrative support to avoid having to go through an outsourcing exercise for broken processes.

2. Did your state expand Medicaid under the ACA? You’re about to take a major financial hit.

Tucked inside the bill is a funding rework that guts federal support for states that expanded Medicaid under the ACA. According to updated modeling from Manatt, these cuts fall hardest on expansion states, especially those with large Medicaid populations and broad eligibility criteria.

This is a double hit for providers. First, you’ll see rising uninsured rates in markets that previously had better coverage — and lower uncompensated care burdens. Second, your Medicaid contracts are about to get tighter. As states scramble to patch budget holes, expect slower reimbursement, narrower networks, and tougher negotiations.

The result? Fewer people covered, more red ink on your balance sheet, and harder math for safety-net systems trying to stay afloat. If you’re in a state that expanded Medicaid, you need to revisit your payer strategy now and prepare for downstream impacts across contract terms, service lines, and patient access.

3. Enrollment simplification is frozen. Red tape is about to surge.

One of the most overlooked but damaging provisions in the bill is a decade-long ban on efforts to streamline Medicaid and CHIP eligibility. CMS had been working to simplify and unify enrollment across programs—moves that would have reduced churn, eased patient confusion, and lightened the load on front-line staff. That progress is now blocked until 2035.

For providers, that means more administrative burden: more paperwork, more friction, and more cost. Your revenue cycle teams will see additional increases in denied claims tied to lapsed or inconsistent coverage. Your registration teams will be bogged down with re-verification and eligibility hassles. And your patients will be stuck in the churn, unsure of their eligibility or coverage status leading to cancellations and operating room inefficiencies.

As the American Hospital Association warned, these changes “layer unnecessary administrative burden onto providers already managing resource constraints,” and “create new access barriers for patients who rely on continuity of care.”

This isn’t just bad policy. It’s operational sabotage.

4. The politics are volatile. Providers will pay the price.

This bill passed with zero Democratic support. A KFF poll found that nearly 66% of Americans view the bill unfavorably. That means parts of it are likely to be challenged, repealed, or reinterpreted down the line. For providers, it introduces more volatility into a system already buckling under fragmentation and underfunding.

Let’s be clear: we’re not here to debate ideology. We’re here to help health systems and physicians keep their doors open and their contracts sound, and to ensure their patients continue to receive the care they need. This bill makes all of that harder.

5. You need a coordinated response — and fast.

This bill doesn’t just disrupt operations. It complicates your story. Strategic communications teams need to be in lockstep with government affairs, revenue cycle, and legal because what you say next matters just as much as what you do.

You’ll need:

• Tight talking points aligned across leadership
• A proactive PR strategy to frame how your organization will deliver care under these new constraints
• A full-court press on state-level policy to mitigate the worst funding outcomes and protect patient access

Silence or vagueness will only invite confusion or backlash. If you’re not shaping the narrative now, the payors will. Your job is to make it clear: we didn’t write this bill, but we’re doing everything within our control to protect our patients and preserve access to care.

Final thoughts and next steps

We don’t have the luxury of waiting for Washington to clean up its mess. We need mitigation strategies now — across operations, contracting, revenue cycle, and community relations. We’ll be helping providers navigate those realities in the months ahead. Because this big bill just created a giant hole in a system that’s already struggling to serve any of its constituents.