CSH Analyzes the Far-Reaching Impacts of the “One Big Beautiful Bill” on Health Coverage, Housing Services, and State Budgets
By Marcella Maguire, Ph.D., Director, Health Systems Integration at CSH
A major shift in federal health policy is underway with H.R.1, known as the “One Big Beautiful Bill” Act that the President signed into law on July 4. This law cuts Medicaid funding by approximately one trillion dollars over the next 10 years, introduces new eligibility requirements, and gives states broader discretion over coverage. The law is poised to impact how housing providers connect residents to critical health and supportive services, what services states cover via Medicaid and what populations states allow access to the Medicaid program. To assist the field in preparing for the significant impacts, CSH is analyzing the law’s impact in two ways:
- Prioritizing State Advocacy for Continuous Eligibility for Health Insurance Coverage. As the new rules and funding changes roll out, CSH will help community partners identify and advocate for state-level policies that protect access to health care coverage for those who are eligible for Medicaid and minimize harm.
- Protecting Housing-Related Services in State Budgets – As states begin planning their budgets for 2026 and beyond, they will need to account for major reductions in federal funding from HR1’s changes to Medicaid. As a result, state officials may need to cut programs that could include new services and services not yet implemented. Unfortunately, those cuts could include Housing Related Services, which are vital for supportive housing residents. To protect these programs supportive housing residents rely on, advocates and community partners must act quickly and strategically.
The Congressional Budget Office, a nonpartisan party that analyzes the impact of pending policy, predicts that the funding cuts will end health insurance coverage for 10 million people. We hope this information helps readers understand the discussions happening at the state and federal levels and how and when the bill might impact agencies and our communities. This blog post will summarize eight areas that the new law will impact the affordable and supportive housing sector, and upcoming posts will examine each of these in more detail.
The Anticipated Impact to State Medicaid Programs
Medicaid, managed by the Centers for Medicare & Medicaid Services (CMS), is the largest health insurer in the nation, with approximately 83 million people covered as of May 2025. As a national program with wide reach, policy and resources shifts take time. In fact, the real impact on recipients and providers could take a year or more to materialize. For example, although the Affordable Care Act was signed into law in 2010, Medicaid expansion in participating states did not begin until 2014. In short, Medicaid changes take time.
When the federal government reduces its Medicaid funding, states are left to make difficult decisions about how to save money. With significantly less funding from the federal government, states will be forced to:
- Offer fewer health and housing-related services
- Serve fewer people
- Decrease rates paid to healthcare providers
History tells us that often, states will first cut services for those who are aging and for people with disabilities. In states that have recently created a Medicaid financed Housing Related Services (HRS) benefit, critical resources for supportive housing may be at risk. Any state level Medicaid cuts would be part of the process that state governments use to manage taxpayer funds, and governors and state legislators will decide what cuts to make.
For people struggling to pay for rent, food and medications, suffering a medical crisis without having healthcare coverage could easily push them into homelessness. State level advocacy will be critical as states make difficult choices around state policies, implementation plans, and budget decisions.
CSH anticipates that the H.R.1 Medicaid changes will have the greatest impact on the affordable and supportive housing industry and residents in 8 areas:
1. Work Requirements
Persons who are Medicaid eligible due solely to low income will be required to prove 80 hours of “community engagement activities” at a minimum in the month prior to requesting Medicaid and every 6 months thereafter. What counts as a “community engagement activity” has some options determined, such as work, volunteer activity, or school, and CMS will provide more detail for states to implement this new work requirement prior to implementation at the start of 2027. Each state will determine their process for how someone proves they are compliant with this requirement.
2. Address Verifications
Address verifications are part of the bill’s efforts to ensure that no one is fraudulently enrolled in two state Medicaid programs, despite limited data to suggest that fraudulent activity occurs. States must develop a process and submit that process to CMS by October 1, 2027. CMS must have a process to receive that data two years later. Individuals who are enrolled in two states will likely be disenrolled. CMS will also issue guidance and collaborate with states to implement this portion of the law.
3. More Frequent Re-Determinations
Under the new law, individuals who qualify for Medicaid based solely on low income, will need to reverify their eligibility every six months instead of once a year. Because each state manages its own Medicaid enrollment process, the impact will vary. Some states prioritize enrolling all eligible individuals, while others focus more on strict compliance, sometimes at the expense of keeping eligible people covered. Homebase has an excellent national and California focused toolkit for supporting individuals through the redetermination process for Medicaid coverage.
4. Cost Sharing
Persons who qualify for Medicaid based solely on low income and with income between 100% to 138% of the federal poverty level, will now be required to share costs for coverage. This can mean monthly premiums or copays as services are delivered. States will have significant flexibility in how they implement cost sharing protocols. Studies show that even a co-pay of $1-5 means that people forego needed care.
5. New Limits to Coverage for Lawfully Present Immigrants
The new law makes it harder for states to use federal Medicaid funding to cover immigrants who have a recognized legal immigration status, known as “lawfully present.” Before H.R.1 was passed, most immigrants who had been lawfully present in the U.S. for five years could qualify for Medicaid, and states could receive federal matching funds to support their coverage. Under the new law, this coverage option for states will only be available to a small, select number of immigrant groups including Cubans, Haitians green card holders, and those from nations that are part of the Compact for Free Association.
Now, states must modify their programs to expect only federal matching funds for the limited number of immigrant groups listed above. These changes are expected to reduce access to care for many immigrants.
6. New Limits to Provider Taxes
Before the new law, states helped to pay for Medicaid using “provider taxes,” which were fees collected from hospitals and other healthcare providers. The new law places limits on how much states can rely on provider taxes. As a result, states that currently use high provider tax rates, like Arizona, Colorado, Connecticut, Michigan, Rhode Island, Vermont, and Virginia, may have to cut back on their Medicaid programs sooner than others. This could mean fewer services or reduced coverage for people who rely on Medicaid.
7. New Limits to Retroactive Coverage
Retroactive Medicaid coverage allows the program to pay for medical services received up to 90 days before someone officially enrolls as long as they were eligible during that time. Under the new law, states can only fund retroactive coverage for 30 days rather than the previously allowable 90 days. This means providers who assist those obtaining health insurance can only be paid for efforts 30 days prior to coverage start dates.
8. Home and Community Based Services (HCBS) Expansion
One promising change in the new bill is that it allows states to apply for new HCBS waivers to fund services for people who meet certain needs as defined by the state known as “Needs Based Criteria.” These waivers will fall under a part of Medicaid law called 1915(c), which allows states to offer HBCS. What is different now is that these waivers will not require people receiving services to meet the Nursing Facility Level of Care (NFLOC) criteria for the state. These waivers can be an opportunity to expand coverage of Housing Related Services and support more people.
In Conclusion
State level health advocacy efforts will be critical to how these eight areas will roll out at the state level, and your voice and the voices of the supportive housing industry and supportive housing residents can impact these decisions.
Decades of evidence and history prove that cutting federal funding for Medicaid and Medicare leads to substantial consequences for people’s overall health, healthcare providers, and the overall economy. When fewer people participate in healthcare coverage, costs can rise for everyone. These consequences can be even more catastrophic for people experiencing homelessness and housing instability.
