OBBB Act + HCBS: What Providers Need to Know about significant policy changes to medicare and medicaid
The One Big Beautiful Bill Act (OBBB) reshapes the HCBS and broader LTSS landscape over the next 24–36 months. Here is a summary of what changes, when they hit, and where to lean in—so you can turn policy turbulence into operational momentum.
Headliners that change your day-to-day
1) New HCBS waiver path—without institutional level of care (LOC).
States get authority (7/1/2028) to approve 1915(c)-style waivers for people who do not meet an institutional LOC. States must show these waivers won’t lengthen wait times for people who do meet LOC, and Congress seeded implementation funds. Expect eligibility aperture to widen and referral volume to rise. KFF
2) “Community engagement” becomes a Medicaid eligibility condition for many adults.
Beginning with redeterminations scheduled on/after 12/31/2026 (state implementation will vary), adults in expansion coverage must document 80 hours/month of work, education, workforce program, or community service, with specified exemptions and hardship pathways. Plan for documentation coaching and churn management. Congress.gov
3) Redeterminations speed up—every six months for expansion adults.
Clock starts for renewals scheduled on/after 12/31/2026. Build cadence for twice-yearly eligibility checks and related outreach. Congress.gov
4) Retroactive coverage shortens.
OBBB narrows “retro” periods beginning 1/1/2027 (generally reducing the historical three-month lookback), increasing bad-debt risk if intake lags. Tighten your benefits navigation at the front door. Congress.gov
5) Cost sharing arrives for some expansion adults.
Starting 10/1/2028, states must impose cost sharing for specified expansion adults, capped at $35 per item/service and 5% of family income (with exclusions for primary care, MH/SUD services, and other protected categories). Providers may require payment at point of service, though case-by-case waivers are allowed. Build compliant small-balance workflows now. Congress.govKFF
6) Program-integrity rails tighten.
States must run a multi-state duplicate-enrollment check (monthly SSN submissions to a new CMS system) and adopt quarterly Death Master File checks (timelines staggered; states and providers have different dates). These controls will surface more “not eligible today” moments—your teams need scripts and SOPs. KFF
7) SNF staffing rule—federal enforcement pause until 1/1/2035.
The CMS nursing-facility minimum staffing final rule is on statutory ice until 2035. That eases near-term competition pressure, but direct-care demand stays hot—use the window to build pipelines that also support HCBS growth. Congress.govGovInfo
Four priority lanes for providers
1) Workforce development: build capacity for 2028+ HCBS growth
Design role ladders aligned to services states may cover under the new waiver (personal care, ADL support, respite, caregiver education), with micro-credentials for dementia and behavioral health. KFF
Stand up earn-while-you-learn pipelines (apprenticeships; CNA-to-HCBS upskilling) and paid practicums with SNF and health-system partners—capitalize on the SNF staffing pause to co-invest in shared talent pools. Congress.gov
Equip schedulers and supervisors with “benefits navigators” training so they can coach clients on community-engagement documentation and avoid avoidable lapses. Congress.gov
2) Compliance adherence: prevent “erroneous excess payments”
Tighten intake/recert SOPs to match twice-yearly redeterminations (tickler systems, text nudges, and supervisor sign-off for high-risk cases). Congress.gov
Pre-service eligibility checkpoints for clients reporting job changes, school enrollment, or hardship events (these directly affect community-engagement status). Document outcomes. Congress.gov
Program-integrity playbook: log quarterly DMF checks; prepare to reconcile CMS duplicate-enrollment flags; record actions and time stamps for audit trails. KFF
Revise financial-assistance policies for the shorter retro window; target a 48-hour Medicaid application submission after referral to reduce exposure. Congress.gov
3) Client support: reduce churn, protect continuity
Client-facing education kits (plain-language, multilingual):
how to document community engagement;
renewal timelines (every 6 months);
when/why cost sharing might apply for expansion adults;
“apply sooner” guidance for retro coverage. Congress.gov+3Congress.gov+3Congress.gov+3
SDoH screening + warm referrals for food, transport, caregiver stress, and dementia supports—stabilize clients at risk of missing new requirements and avoid ED-driven disruptions. (This is also your churn-reduction strategy.) Congress.gov
Small-balance and cap tracking for any required copays (respect the 5% family cap; ensure exemptions for primary care and MH/SUD) and a hardship-waiver protocol. Congress.govKFF
4) Advocacy: shape your state’s HCBS design and guardrails
Meet your Medicaid agency in Baltimore (and immediately after). Ask how they’ll use federal implementation dollars and how providers can participate. Priorities to push: covered services, person-centered planning, caregiver training/respite, quality metrics, and no increase in average wait times for LOC populations. KFF
Urge pragmatic community-engagement policies (clear exemptions, streamlined verification, multilingual notices, strong fair-hearing safeguards) to minimize harmful churn among people with complex conditions or variable work hours. Congress.gov
Press for churn-mitigation investments (data-matching cadence aligned to renewal cycles, proactive outreach/navigation) to keep eligible people covered and services consistent. Congress.gov
Hallway cheat sheet: 10 questions to ask at the ADvancing States Conference in Baltimore
What HCBS service categories is our state eyeing for the new non-LOC waiver—and what evidence or quality metrics will matter most?
How will the state ensure new waivers don’t extend wait times for people who meet LOC? What data will they publish?
What timeline and documentation will the state require to verify community engagement (and what exemptions/hardships)?
How will six-month renewals be operationalized with plans and vendors—what is the outreach calendar?
What is the plan to stand up the duplicate-enrollment system and monthly SSN feeds by 2029? Provider expectations?
What guidance will clarify cost-sharing applicability for expansion adults and provider collection rules starting 10/1/2028?
How will the state measure and publish churn, denials, and fair-hearing outcomes?
Will the state co-fund apprenticeships or paid practicums that grow the direct-care pipeline ahead of 2028?
What consumer education assets (scripts, letters, multilingual templates) will be shared with providers for renewals and community engagement?
How will the state ensure transparency and provider participation in HCBS waiver development and evaluation cycles?
The bottom line
OBBB raises new compliance considerations introducing administrative complexity, narrows retro periods, and introduces cost sharing—and it gives states a new door to expand HCBS access without institutional LOC. Providers that (1) harden eligibility operations, (2) build right-sized copay workflows, and (3) scale a skills-based workforce now will be positioned to serve more people—safely, compliantly, and sustainably—when the 2028 changes land.
References
Congress.gov. (2025). H.R. 1—One Big Beautiful Bill Act (119th Congress): Text and section summaries (esp. Title IV, Subtitle D—Health; Secs. 44108, 44121–44122, 44141–44142). Retrieved from Congress.gov.
Congressional Research Service. (2025, June 13). Health coverage provisions in One Big Beautiful Bill Act (H.R. 1) (CRS Report R48569). Library of Congress. Congress.gov
KFF. (2025). Health Provisions in the 2025 Federal Budget Reconciliation Law—Medicaid (incl. Section 71121 HCBS waiver; redeterminations; cost sharing; program integrity timelines). KFF
Centers for Medicare & Medicaid Services (CMS). (2024, May 10). Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting (Final rule, 89 Fed. Reg. 40876). Federal Register/GovInfo. GovInfo
Note: Effective dates and operational details above reference the cited statutory text and summaries; states will specify implementation mechanics via SPA/waiver processes and guidance.
