ROTHKOFF LAW GROUP SYNOPSIS OF KEY MEDICAID AND RELATED PROVISIONS IN ONE BIG BEAUTIFUL BILL ACT
One Big Beautiful Bill Act
- Bill passed by House on May 22
- Senate significantly amended the bill and considered it this past weekend during a multi-day vote-a-rama, and passed by Senate on July 1
- Following Senate passage, bill returns to the House
- House Rules Committee will convene today to set rules for debate
- House vote potentially happening this week
- Many House members pushing to amend Senate bill
- If House amends the bill, it will return to the Senate
- President Trump set unofficial deadline of July 4 for Congress to put bill on his desk for signature
One Big Beautiful Bill Act – Key Medicaid Policies*
- Retroactive coverage: shorten the retroactive coverage period from three months prior to application to one month (for ACA expansion adults) and two months (for all other Medicaid groups)
- Home equity values: Establish a ceiling of $1,000,000 for permissible home equity values for individuals when determining allowable assets for Medicaid beneficiaries, prohibit use of asset disregards from being applied to waive home equity limits
- Biden-era rules: Moratorium implementation or enforcement of Biden-era Eligibility & Enrollment, Medicare Savings Program, and Nursing Home Staffing Final Rules through October 1, 2034 (except certain provisions of those rules that have already been implemented)
- Non-Citizen Medicaid eligibility: Restrict Medicaid coverage to only three groups of non-citizens (1) lawful permanent residents; (2) certain Cuban and Haitian immigrants; and (3) citizens of the Freely Associated States (COFA migrants) residing in states and territories
- New home-and community-based services (HCBS) waiver opportunity: A new provision creating a new Section 1915(c) waiver opportunity to allow states to expand HCBS to individuals who do not have a determination of need of institutional-level of care, appropriates $100 million in FY 2027 to support states
One Big Beautiful Bill Act – Other Medicaid Policies
- Financing and payment changes
- New restrictions on states’ ability to use provider taxes to fund the nonfederal share of Medicaid (greater restrictions for expansion states)
- Limitations on state-directed payments(higher limit for non-expansion states)
- Rural health systems: A new provision allocating $50 billion to the Administrator of CMS over 5 years to be distributed to states to help invest in rural health systems
- Medicaid work requirements: Work requirements for Medicaid beneficiaries aged 19 – 64 who do not meet an exception
- Additional changes targeted at Medicaid expansion adults
- More frequent eligibility redeterminations (at least every six months)
- Cost sharing on most services
One Big Beautiful Bill Act – Tax Policies
- Makes permanent the reduced individual tax rates provided under the Tax Cut and Jobs Act
- Increases standard deduction permanently for individual and joint filers
- Adds a $6,000 “bonus” deduction for individuals 65 and older who do not itemize and earn less than $75,000 (or $150,000 for couples) through 2028 – phase outs for seniors with higher incomes
- New deduction on tips, up to a $25,000 cap, and new deduction on overtime pay, up to a $12,500 cap, through 2028, with some conditions
- Raises the SALT limit to $40,000 through 2029, but with limits for individuals earning more than $250,000 or couples making more than $500,000
- Raises debt ceiling by $5T (vs. $4T in House bill)
One Big Beautiful Bill Act – Tax Policies
- Makes permanent estate and gift tax exemption of $15 million (inflation-adjusted) starting in TY 2026
- Revises ABLE accounts:
- Permanently allows additional contributions to ABLE accounts beyond the gift tax annual exclusion amount (up to the lesser of the federal one-person poverty limit or their compensation) starting in 2027
- Permanently allows an additional year of inflation adjustment for the base amount of the limit
- Permanently allows designated beneficiaries who make qualified contributions to their ABLE account to qualify for the Saver’s Credit
- Permanently allows tax-free rollovers of amounts in Section 529 qualified tuition programs to qualified ABLE programs
- Permanently excludes from taxable income the discharge of student loans due to death or disability
- Expands the 529 “qualified tuition program” — which allows tax-free withdrawals to cover eligible higher education costs such as tuition, books, and room and board — to be used for additional expenses including education-related therapies for students with disabilities, up to a $20,000 withdrawal amount cap.
One Big Beautiful Bill Act – SNAP Policies
- Subjects adults aged 55 to 64 and adults living with children aged 14 or older to work requirements for the first time
- State waivers available under certain conditions
- Beginning in fiscal 2028, requires states to be responsible for funding portion of SNAP benefit costs (up to 15% based on its benefits payment error rate) (lower than 25% House max)
- Waiver for states with higher error rates (designed to benefit Alaska)
- Reduces federal share of administrative costs from 50% to 25% beginning in FY 2027