H.R. 1

In This Section

On July 4, 2025, President Trump signed H.R. 1, also known as the One Big Beautiful Bill Act (OBBBA), into law following its narrow passage in both chambers of Congress.

The legislation’s provisions threaten to undermine critical components of the health care safety net—particularly Medicaid. These policy shifts jeopardize ob-gyns and other physicians’ ability to deliver comprehensive, patient-centered care. Many of these provisions specifically target Medicaid Expansion states—see if your state is affected.

The summary below outlines the key health care provisions in H.R. 1, timing of implementation, and their projected effects on ACOG members and the patients they care for. Please contact [email protected] with any questions.

Medicaid

Medicaid is the largest single payer of maternity care in the United States, covering 41% of U.S. births in 2023. H.R. 1 provisions will make long-lasting and sweeping changes to the Medicaid program, especially in its financing and eligibility, resulting in what are projected to be massive coverage losses and exacerbated care shortages.

Eligibility and Financing

What: H.R. 1 imposes mandatory work reporting requirements. Individuals aged 19–64 must participate in “community engagement activities” (work, job training, school, or volunteering) for 80 hours each month to qualify for Medicaid through the ACA Medicaid expansion. The law includes exemptions for pregnant and postpartum people and allows states the option to establish additional exemptions, creating the potential for inconsistent implementation. States will also define frequency of reporting.

When: No later than December 31, 2026; earlier at the state’s discretion

Impact: Exemptions for pregnant and postpartum individuals are undermined by the administrative burden of verifying exemption status, which could lead to delays in care, coverage interruptions, or wrongful disenrollments. Prior state-level implementation of similar policies suggests that millions could lose Medicaid coverage, primarily due to unmet documentation requirements or the inability to navigate complex reporting systems. H.R. 1 will also likely add to the administrative burden on physician practices and hospitals.
What: State Medicaid agencies conduct reviews to ensure beneficiaries meet eligibility requirements for Medicaid services. Currently, states perform eligibility redeterminations every 12 months for those whose eligibility is based on income and for individuals whose eligibility is based on disability or who are age 65 and older. H.R. 1 requires states to redetermine eligibility every six months for those enrolled in Medicaid expansion.

When: January 1, 2027

Impact: As onerous paperwork requirements place more burden on individuals, we can expect lower enrollment numbers and increased numbers of uninsured people. Since this provision targets only those in the Medicaid expansion group, H.R. 1 penalizes states that have adopted this program. The Congressional Budget Office estimates this provision will lead to 700,000 more uninsured people in 2034.
What: Retroactive coverage allows Medicaid enrollees to receive Medicaid benefits for services received prior to the application for coverage date. H.R. 1 shortens this coverage period from the current three months to one month for individuals enrolled through Medicaid expansion and two months for those in traditional Medicaid.

When: January 1, 2027

Impact: This change will disproportionately harm individuals experiencing pregnancy, miscarriage, or childbirth, who often seek care without prior Medicaid enrollment due to timing or life circumstances. A reduced retroactive window means many will face uninsured hospital costs or gaps in postpartum or miscarriage care. The increased financial burdens may deter individuals from seeking necessary medical attention or contribute to significant financial hardship. The retroactive Medicaid coverage provisions in H.R. 1 will have a greater effect on individuals enrolled through Medicaid expansion compared to those in traditional Medicaid, resulting in uneven effects based on state expansion status.
What: “Provider taxes” can be a confusing term. It does not refer to a tax on individual physicians: it refers to levies imposed on health care institutions, such as hospitals, managed care organizations, and nursing homes. These taxes help fund state Medicaid programs and may support base and supplemental payments to health care professionals and coverage expansions, including those under the ACA. Federal law permits these taxes to be counted toward a state’s Medicaid financing obligations only if they remain within a “safe harbor” threshold set at 6% of net patient revenue. H.R. 1 introduces significant changes to provider tax policy:
- For non-expansion states, existing provider taxes may remain in place if they stay under the 6% limit
- For Medicaid expansion states, the safe harbor threshold will gradually decrease to 3.5% by fiscal year 2032, beginning with a 0.5% annual reduction starting in fiscal year 2028. These changes apply to all taxed providers in expansion states except for nursing facilities and intermediate care facilities and will affect state budgets.
For all states, H.R. 1 prohibits the imposition of any new provider taxes beyond those already in effect as of October 1, 2026

When: October 1, 2026

Impact: In fiscal years 2026 and 2027, all states will retain current provider tax rates. After that, states may need to make up for lost revenue by reducing Medicaid eligibility, benefits, or physician reimbursement rates, potentially increasing out-of-pocket costs for enrollees and limiting access to essential care. States may also need to consider raising other state taxes (eg, sales or income taxes) to offset revenue shortfalls, which would have broader economic implications for residents. The 38 states that currently have at least one provider tax above 5.5% will face these effects more severely.
What: SDPs enable states to require Medicaid managed-care organizations to pay health care professionals and facilities in specific ways, such as setting uniform rates or adopting particular payment models. While federal regulations generally prohibit states from directing managed-care organization payment, SDPs provide a structured exception. A 2024 regulation allowed the use of the average commercial rate as the upper payment limit for certain SDPs rather than the traditionally lower Medicare rate. H.R. 1 revises this policy significantly by …
- Capping inpatient hospital and nursing facility SDPs at 100% of the Medicare rate in Medicaid expansion states and 110% in nonexpansion states
- Requiring SDPs approved before May 1, 2025—including those for rural hospitals—to be reduced by 10% annually starting in 2028 until they meet the applicable cap
- Defaulting to the Medicaid fee-for-service rate as the cap when no Medicare rate is available
When: July 4, 2025

Impact: States often use SDPs to increase payments to rural hospitals and providers of postpartum, family planning, and behavioral health services. Since the average commercial rate is significantly higher than the Medicare rate, hospitals may see their SDPs decrease while the cost of uncompensated care increases. This provision also punishes states that have expanded Medicaid by capping their SDP rate at a lower level than states that have not expanded. Hospitals and providers serving high-need or underinsured populations may face increased financial pressure and physician reimbursement for services may decrease. These changes may affect access to essential health services in both rural and urban areas.
What: States that make erroneous Medicaid payments for ineligible individuals or overpayments for eligible individuals must allow CMS to recoup federal funds if the state’s “error rate” is over 3%. If the state Medicaid agency has taken “good faith” steps to reduce errors, CMS may waive the recoupment payment. H.R. 1 restricts the total number of erroneous payments that can be waived, allows the HHS secretary and states to audit for overpayments, and expands the definition of erroneous payments to include payments where insufficient information is available to confirm eligibility.

When: Beginning fiscal year 2030

Impact: Improper Medicaid payments are most often due to documentation or administrative issues rather than fraud or abuse. This provision adds extra financial and operational burdens on states by reducing federal reimbursement for billing errors.

Access to Care

H.R. 1 will have significant effects on where patients access services, the cost of care for certain populations, and the workforce. These changes will affect the Medicaid expansion population, Planned Parenthood health centers, and rural hospitals. See below for changes impacting immigrant populations.

What: H.R. 1 prohibits Medicaid reimbursement to nonprofit health care organizations that are primarily engaged in family planning or reproductive health services, provide abortion services outside of the Hyde Amendment exceptions (rape, incest, or when the life of the pregnant person is at risk), and received more than $800,000 in Medicaid reimbursements in 2023.

When: Upon the enactment of H.R. 1 and to remain in force for one year. As of July 14, implementation is temporarily blocked due to a legal challenge and the issuance of a temporary restraining order.

Impact: This policy aims to bar Planned Parenthood health centers from participating in Medicaid and removes access to a broad range of health care services they provide in addition to abortion services, including contraception, STI testing and treatment, cancer screenings, and general preventive care. The definition of “primarily engaged in family planning services” remains unclear, raising uncertainty about how other reproductive health care providers may be affected. If upheld, this provision could lead to the closure of multiple health centers, particularly in underserved areas, significantly limiting access to reproductive and preventive health services for Medicaid beneficiaries. Legal proceedings are ongoing, and the full impact will depend on the outcome of current litigation.
What: States have the option to charge premiums and require cost sharing for certain services for Medicaid-enrolled patients. H.R. 1 requires Medicaid expansion states to impose cost sharing of up to $35 per service on ACA Medicaid expansion adults with incomes between 100% and 138% of the federal poverty level (FPL), with limited exceptions, including for primary care, pregnancy care, and services provided by federally qualified health centers.

When: October 1, 2028

Impact: Out-of-pocket costs for certain patients in the Medicaid expansion population with incomes between 100% and 138% of the FPL will increase. Patients may be unable to afford care or not seek care due to increased costs.
What: H.R. 1 establishes a $50 billion rural health fund administered by CMS. To apply for funding, states submit a plan that addresses key priorities, including improving access to health services and enhancing health outcomes for rural residents, instituting new technologies, supporting partnerships, and training and recruiting rural health care workers.

When: Between the 2026 and 2030 fiscal years

Impact: Other H.R. 1 policy changes, including significant Medicaid funding reductions, restrictions on provider taxes, and new eligibility barriers, may limit this provision’s effects. These changes are expected to increase the number of uninsured individuals and the level of uncompensated care, placing additional strain on already fragile rural health systems. Nearly half of rural hospitals currently operate with negative financial margins, and the cumulative impact of federal funding cuts could lead to service reductions or closures, particularly in Medicaid expansion states. With rural residents disproportionately relying on Medicaid and CHIP, these systemic pressures may undermine the goals of the rural health fund and exacerbate health care disparities in rural communities.
What: Under current law, the ACA allows CMS to oversee the screening of Medicaid providers, including physicians, for compliance. States must terminate a provider’s Medicaid participation if that provider has been terminated from Medicare or from another state’s Medicaid program. H.R. 1 now mandates that states conduct status checks at enrollment, reenrollment, and on a monthly basis to determine whether providers have been terminated from Medicare or any other state Medicaid program.

When: January 1, 2028

Impact: This provision will increase the administrative burden on states and will also result in more frequent screening of physicians.

Medicare

H.R. 1 provides a one-year 2.5% increase to Medicare physician payments beginning January 1, 2026, offering temporary relief, but fails to address the need for long-term payment reform to sustain access to care.

What: H.R. 1 provides a 2.5% increase to the Medicare Physician Fee Schedule conversion factor for services furnished in 2026.

When: January 1, 2026, to December 31, 2026

Impact: The short-term increase provides temporary relief for physicians facing declining Medicare payments but does not address underlying issues in the Medicare payment system. Long-term reforms are needed to ensure financial sustainability and maintain patient access to care.

ACA Marketplace

The Patient Protection and Affordable Care Act, or (ACA), provides affordable health insurance coverage for individuals and families. H.R. 1 made numerous changes to the ACA, affecting access to and cost of coverage. See below for changes impacting immigrant populations.

What: APTCs are federal subsidies that help individuals and families with low to moderate incomes afford health insurance purchased through the ACA Marketplace. Currently, APTCs allow individuals earning above 400% of the FPL to receive subsidies, capping premium costs at 8.5% of income. As a result, millions of people receive affordable coverage through the marketplace. APTCs are set to expire at the end of 2025 and were not extended under H.R. 1.

When: December 31, 2025

Impact: Without renewal, millions will lose eligibility for APTCs and face significantly higher costs of coverage through the ACA Marketplace. Individuals may forgo marketplace coverage or delay needed preventive care and hospitals and health systems may face increased financial stress due to higher rates of uncompensated care.
What: H.R. 1 requires individuals to complete pre-enrollment verification of eligibility for premium tax credits.

When: January 1, 2028

Impact: Added administrative complexity for individuals seeking subsidized coverage, along with delays or difficulties in verification, may lead some individuals to forgo insurance. This could contribute to an increase in uninsured rates and a rise in uncompensated care.
What: H.R. 1 specifies that if a person is denied or disenrolled from Medicaid due to the new work requirements, they are also ineligible for premium tax credits on the ACA Marketplace.

When: January 1, 2027, or earlier at the discretion of states

Impact: This provision reinforces a coverage gap for individuals disenrolled from Medicaid due to work requirements. These individuals would be barred from accessing affordable coverage through the marketplace even if they lack other insurance options. The result may be a higher uninsurance rate, particularly among low-income populations who face administrative barriers to coverage, and increased uncompensated care for physicians who care for those populations.

Student Loans

H.R. 1 caps federal student loans and eliminates Grad PLUS starting July 1, 2026, limiting financing for medical education and reducing repayment options.

What: H.R. 1 eliminates the Grad PLUS loan program, which allows graduate and professional students to borrow up to the full cost of attendance. Graduate students in need of federal tuition assistance will have to take out direct unsubsidized loans. The bill imposes new caps on these loans:
- Professional students (eg, medical, dental, law): $50,000 per year, $200,000 lifetime
- Graduate students (eg, master’s programs): $20,500 per year, $100,000 lifetime
- Parent PLUS loans (for parents of undergraduates): $20,000 per student per year, $65,000 per student lifetime
- Part-time students: subject to lower caps based on enrollment level
When: Beginning July 1, 2026, colleges and universities may set lower loan limits for academic programs if applied uniformly across all enrolled students in that program.

Impact: The loan caps may limit access to funding for students pursuing high-cost degrees such as medicine. Without alternative financial support, students—particularly those from low-income or underrepresented backgrounds—may face barriers to entering professional fields. More students may turn to high-interest private loans, which often offer fewer borrower protections. Institutions may also impose stricter borrowing limits. These changes could have long-term implications for the health workforce pipeline and the affordability of graduate and professional education.
What: H.R. 1 overhauls federal student loan repayment plans for new borrowers, eliminating existing repayment options (eg, SAVE, PAYE, ICR, graduated, extended, alternative) for new borrowers and constricting repayment options to only two possibilities:
- New standard plan: borrowers make fixed payments for 10–25 years, depending on the amount borrowed
- Repayment Assistance Plan: new income-driven plan where payments range from 1–10% of income, with a $10 monthly minimum. Stipulations include a $50 reduction per dependent, waived interest for on-time payments, forgiveness for any remaining balance after 30 years, and qualification toward Public Service Loan Forgiveness (PSLF).
Existing borrowers will be allowed to switch into the new repayment assistance plan or the existing income-based repayment plan.

When: New plan structure effective July 1, 2026; expanded access for current borrowers begins July 1, 2028

Impact: Eliminating all existing plans in favor of just two options significantly reduces flexibility for borrowers and may be harmful for those with fluctuating incomes or complex financial situations. The removal of multiple repayment options may leave many struggling to manage debt. However, the inclusion of PSLF eligibility under the Repayment Assistance Plan offers continued support for those in public service careers. Years served in medical residency at public and non-profit institutions continue to count towards PSLF.

Changes Affecting Immigrant Populations

H.R. 1 restricts immigrants’ access to Medicaid and ACA coverage, reducing emergency care reimbursements and limiting reproductive health services.

What: Emergency Medicaid reimburses hospitals for the costs of emergency care provided to immigrants who would qualify for Medicaid if not for their immigration status (eg, undocumented individuals and some lawfully residing statuses). H.R. 1 lowers federal matching payments to the state's regular FMAP for emergency Medicaid for these individuals who would otherwise be eligible for expansion coverage. The lower payments may not cover the full cost of providing care.

When: October 1, 2026

Impact: A large portion of emergency Medicaid is spent on labor and delivery costs. Hospitals may see a decline in emergency Medicaid reimbursements for individuals who deliver at their hospitals, which could impact L&D unit revenue and lead to closures.
What: Federal law prohibits undocumented immigrants from receiving federally funded Medicaid. Lawfully present immigrants are only eligible for Medicaid or CHIP if they hold a “qualified” immigration status and have completed a five-year waiting period. H.R. 1 narrows the definition of qualified immigrants eligible for Medicaid and CHIP, restricting coverage to lawful permanent residents; certain Cuban and Haitian entrants; Citizens of the Freely Associated States (COFA migrants) lawfully residing in the United States; and lawfully residing children and pregnant individuals in states that opted into the ICHIA provision, which allows states to provide Medicaid coverage to any lawfully residing children and pregnant women by waiving the five-year waiting period for Medicaid.

When: October 1, 2026

Impact: H.R. 1 eliminates Medicaid and CHIP eligibility for many categories of legal immigrants, including refugees, asylees, parolees, certain abused spouses and children, and victims of trafficking. This rollback in eligibility will affect immigrants by limiting access to contraception, prenatal care, and other essential reproductive health services.
What: Currently, lawfully present immigrants are eligible for subsidized ACA Marketplace coverage. Eligibility also extends to immigrants whose status would otherwise make them ineligible as long as their incomes are under 100% of the FPL. H.R. 1 narrows this eligibility by …
- Limiting subsidized coverage to specific immigration statuses, including lawful permanent residents, Compacts of Free Association (COFA) migrants, and certain Cuban and Haitian entrants
- Eliminating subsidized Marketplace coverage for all lawfully present immigrants with incomes under 100% FPL
When:
- January 1, 2026 (subsidy elimination for those under 100% FPL)
- January 1, 2027 (broader eligibility restriction)
Impact: This provision eliminates ACA Marketplace coverage for many lawfully residing immigrants such as asylees, refugees, people with temporary protected status, and DACA recipients. This may leave some ineligible for either Medicaid or Marketplace coverage.

Supplemental Nutrition Assistance Program (SNAP)

H.R. 1 cuts SNAP funding and tightens eligibility requirements, limiting access to nutrition assistance and potentially reducing WIC participation.

What: Key provisions include …
- Cutting federal contributions to SNAP benefits by up to 25% and the federal share of states’ SNAP administrative costs by 50%
- Expanding work requirements to apply to more adults, including older individuals and parents of children aged 14 and older
- Freezing the cost basis for SNAP benefits outside of standard inflation adjustments
- Restricting SNAP eligibility to U.S. citizens, lawful permanent residents, certain Cuban entrants, and Compacts of Free Association citizens—excluding many currently eligible immigrants
- Increasing paperwork for utility deductions and eliminating internet costs as a deductible expense
When: Various provisions began following enactment of H.R. 1; details may be subject to further regulatory guidance.

Impact: These changes may significantly reduce access to nutrition assistance, especially for low-income families, older adults, and immigrant communities. States will be forced to absorb higher administrative costs or cut benefits, potentially leading to fewer individuals being served or even state-level program withdrawals. Although H.R. 1 does not directly cut WIC, its changes may affect adjunctive eligibility, a streamlined process that allows families to qualify for WIC if they already participate in programs like SNAP or Medicaid.