The consequences of a trillion dollars

Many thoughtful people in the US are concerned about the effects that the 2025 federal budget reconciliation law will have on poor people in many states who are currently enrolled in Medicaid health coverage. KFF has put together a comprehensive analysis of the implications of this omnibus act for Medicaid patients here. I asked Gemini for a summary of the impact this massive change in Medicaid will have, with over $1 trillion reductions in Medicaid spending over the coming ten years(!). Here is the analysis Gemini provided:

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QUERY:  what are the main effects of the 2025 budget bill on Medicaid recipients?

GEMINI RESPONSE 8/21/25

The 2025 budget bill, also known as the One Big Beautiful Bill Act (OBBBA), includes significant changes to the Medicaid program, which is expected to have a considerable impact on recipients. 

Here are the main effects of the 2025 budget bill on Medicaid recipients:

• Significant funding cuts: The bill implements an estimated $1.035 trillion reduction in federal Medicaid spending over ten years. These cuts will necessitate states either increasing their own funding or reducing services, potentially affecting various benefits, according to the Center on Budget and Policy Priorities.
• Work requirements: The bill introduces work reporting requirements, referred to as “community engagement” activities, for most Medicaid expansion enrollees aged 19 to 64. These recipients will need to work, volunteer, or participate in educational activities for at least 80 hours per month to maintain their eligibility.
• Increased paperwork and administrative burdens: The new requirements will place a greater administrative burden on recipients to verify their eligibility and for states to manage the process, potentially leading to some eligible individuals losing coverage due to difficulties navigating the system.
• More frequent eligibility redeterminations: States will be required to conduct eligibility redeterminations for Medicaid expansion adults every six months, rather than annually, starting January 1, 2027. This increased frequency could lead to coverage losses for those unable to complete the renewal process on time or with changes in circumstances.
• Cost-sharing requirements: States are now mandated to impose cost-sharing requirements of up to $35 per service for Medicaid expansion enrollees with incomes above 100% of the federal poverty level, says the Center for American Progress. Out-of-pocket costs will remain capped at 5% of family income.
• Restrictions on immigrant eligibility: Some categories of lawfully present immigrants will lose eligibility for Medicaid and Medicare under the bill, notes the Center for Medicare Advocacy.
• Potential impacts on specific services: Reductions in federal funding might lead states to cut optional benefits, including home- and community-based services (HCBS) that are crucial for individuals with disabilities and older adults.
• Increased risk for certain groups: Older adults, people with disabilities, and individuals in rural areas are particularly vulnerable to losing coverage or facing increased costs due to these changes. 

It’s important to remember that some provisions of the bill may have delayed effective dates, and future policy changes could still occur. 

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So why is this a big deal for lower- and lower-middle income people in the United States? Because it seems likely that millions of people will lose affordable health coverage, and many thousands of them will sicken and die from preventable illnesses. The Center on Budget and Policy Priorities (link) estimates that as many as 36 million people are at risk of losing Medicaid eligibility as a result of new work requirements. The Modern Medicaid Alliance is collecting stories of individual people whose Medicaid benefits have been (or will soon be) cancelled (link). These are short items drawn from various news outlets, and they paint a tragic picture from all over the country of the situations that will confront struggling low-income people, young and old, when these new Medicaid reductions begin to hit.

Let’s recall as well that health disparities in the US are severe by almost any measure. Here are disparities of infant mortality in NE Florida noted by Northeast Florida Healthy Start (link).

Health Disparities by Race

And here is a comparison of urban and rural mortality statistics offered by the Rural Health Information Hub (link).

Does anyone seriously doubt that reductions in Medicaid eligibility to millions of individuals will worsen these disparities? And for what? To reduce taxes on the top 1% of income earners in the US.