The One Big Beautiful Bill Act of 2025 (OBBBA) (PL 119-21) contains major changes to Federal Medicaid financing and the Affordable Care Act (ACA). The law is expected to result in 1.5 million New Yorkers losing health insurance coverage, which will drive up uncompensated care costs for hospitals and other health care providers. It will also significantly reduce Federal support for New York’s Medicaid program and the State’s Essential Plan (EP).
Hospitals and other health care providers will consequently experience a twofold impact: 1) direct revenue reductions/ increases in uncompensated care and 2) Medicaid cuts passed through by the State because of lower Federal financial support. While the OBBBA’s provisions phase in over the next few years, two that damage New York are effective over the next six months: the sunsetting of the State’s recently enacted managed care organization (MCO) tax and changes to the EP.
Attached is a summary of how the OBBBA impacts Medicaid programs, Medicaid beneficiaries, and providers.