The OBBB Act: What HCBS & LTSS Providers Should Brace For—and How to Lead Through It
The One Big Beautiful Bill Act (H.R. 1, 119th Congress; Public Law 119-21) is now law, as of July 1, 2025. It’s a sprawling reconciliation package that reaches deep into Medicaid, Medicare, and the ACA—and its ripple effects will hit home- and community-based services (HCBS) and the broader long-term services and supports (LTSS) ecosystem first. Here I candidly explore the repercussions of the act—and a playbook to stay ahead of it.
1) Coverage churn will rise—especially among adults 19–64
The law adds community engagement (work) requirements for the ACA expansion group starting as early as Q1 2027, mandates six-month redeterminations for that group, shortens retroactive eligibility windows, and stands up multi-state duplicate-enrollment checks with Death Master File sweeps. Translation: more paperwork, more verification, and more people falling out of coverage even when eligible. Congress.gov
Work requirement: at least 80 hours/month of work, community service, workforce program participation, or qualifying income; verification at application and renewal (states may check more often). CMS and states receive implementation funds, but the timelines are tight. Congress.gov
Six-month redeterminations for expansion adults begin the first quarter after December 31, 2026. Congress.gov
Retroactive eligibility shrinks to 1 month for expansion adults and 2 months for others beginning Q1 2027 (CHIP to 2 months). Congress.gov
Program-integrity rails (duplicate enrollment system, DMF checks, and error-payment classifications) increase the frequency and consequences of file changes. Congress.gov
Why this matters: Coverage churn disrupts authorizations, care continuity, billing, and staffing. Independent analyses expect millions more uninsured by 2034, with the Congressional Budget Office (CBO) identifying work requirements as the single largest source of Medicaid savings—and coverage loss—in the law. KFF
Provider moves now
Bake eligibility status checks into scheduling and start-of-care; set grace-period holds and rapid re-verification SOPs with your MCOs.
Launch client navigation around redetermination windows and documentation (scripts, checklists, multilingual notices).
Tighten denial prevention at intake to protect revenue as retro windows narrow. Congress.gov
2) Cost-sharing arrives for part of the expansion population (from FY2029)
States must impose cost sharing (capped at $35 per item/service and 5% of family income) for certain Medicaid expansion adults over the poverty level, with important exclusions (e.g., primary care, MH/SUD, and services at FQHCs/CCBHCs/RHCs). States may let providers require payment at the point of service. HCBS isn’t categorically exempt—verify eligibility category before assessing any copay. Congress.gov
Provider moves now
Add real-time copay adjudication and 5% cap tracking to your billing; establish hardship waiver workflows consistent with state policy.
Train teams on clear, respectful communication that protects dignity and autonomy while explaining new cost-sharing rules.
3) A new HCBS pathway—without institutional level-of-care—begins July 1, 2028
States can adopt an additional §1915(c)-style HCBS waiver that does not require an institutional level-of-care determination; they must set alternative, needs-based criteria and report on performance. Federal dollars support CMS setup and state HCBS programs in FY2026–FY2027. This is a genuine access opportunity—if states use it ambitiously. Congress.gov
Provider moves now
Engage your Medicaid agency on eligibility tiers, service menus, rates, and quality measures that center person-first, dignity-preserving supports.
Prepare to scale for lighter-acuity populations: role design, competency-based training, and career ladders that grow the direct care workforce sustainably.
4) The nursing-facility minimum staffing rule is paused through FY2034
Federal implementation and enforcement of CMS’s 3.48 HPRD nursing home staffing rule and 24/7 RN requirement are delayed until FY2035. The pause also delays Medicaid institutional payment transparency reporting. While this is a SNF-facing rule, it changes the regional labor calculus—and could modestly ease near-term competition for nurse aides. Congress.govCenters for Medicare & Medicaid ServicesGovInfo
Provider moves now
Revisit your wage models and pipeline partnerships (CNA → personal care → advanced dementia competencies).
Advocate to rechannel cross-continuum workforce investments into HCBS pipelines that elevate skills and retention.
5) Enrollment streamlining is effectively on ice until FY2035
The law delays CMS’s 2024 Medicaid/CHIP/BHP streamlining rule—which aimed to reduce paperwork and coverage gaps—until FY2035. Expect higher administrative burden and sustained churn risk for older adults and people with disabilities who depend on stable coverage to remain at home and in the community. Congress.gov Centers for Medicare & Medicaid Services
6) State financing tools tighten—pressure will show up in rates and “optional” services
The law limits provider taxes (ratcheting down in expansion states to 3.5% by FY2032, with carve-outs) and caps certain Medicaid managed-care directed payments to 100% of Medicare in expansion states (110% in non-expansion states). States that used these levers to enhance LTSS may have less room for supplemental uplifts. Congress.gov
Provider moves now
Model your 2028+ exposure to directed-payment caps and provider-tax changes.
Press for state plan/waiver rate re-bases for HCBS where Medicare benchmarks don’t exist.
7) Distributional and fiscal backdrop: headwinds for safety-net care
CBO’s distributional analysis finds resources decrease for households at the bottom of the income distribution and increase in the middle and upper ranges, implying greater stress on safety-net providers and caregivers that support older adults and people with disabilities. CBO also projects higher debt-service costs over 2025–2034—pressure that often boomerangs onto Medicaid policy choices. Congressional Budget Office
What this means in everyday operations
Referrals get choppier. Expect more eligibility swings, especially among working-age adults. Build weekly roster reconciliation with your plans; set “fast-appeal” lanes when terminations are erroneous. Congress.gov
Revenue cycle hardening is non-negotiable. Tighten intake verification, start-of-care controls, and point-of-service options to offset shorter retro coverage and future cost-sharing. Congress.gov
Workforce development is strategy, not support. Use the HCBS waiver window to champion career pathways, adult-learning-aligned training, and retention programs rooted in person-centered care and autonomy.
Advocacy is operations. Your voice can shape state implementation details (verification cadence, hardship exemptions, waiver service arrays) that either reduce churn or amplify it. KFF’s synthesis of CBO estimates underscores how state choices will ultimately set the human impact. KFF
Provider checklist (start this quarter)
Meet with Medicaid & MCO partners to map 2026–2029 milestones (work rules, 6-month redeterminations, cost sharing) and define data feeds for real-time eligibility + cost-share. Congress.gov
Stand up client education that is clear, multilingual, and dignity-first: work-rule documentation, redetermination reminders, and how copays work for expansion adults. KFF
Quantify rate risk from directed-payment caps and provider-tax limits; prepare a state plan/waiver rate proposal anchored in cost and quality. Congress.gov
Engage early on the new HCBS waiver. Advocate for needs-based criteria that expand access without waitlist growth; propose quality metrics that reflect independence, safety, and caregiver support. Congress.gov
Sources & further reading
Congress.gov. (2025). H.R.1—One Big Beautiful Bill Act (Public Law No. 119–21): Summary and health titles. Retrieved August 18, 2025, from the Library of Congress website. Congress.gov
Centers for Medicare & Medicaid Services. (2024, Mar. 27). Streamlining the Medicaid, Children’s Health Insurance Program, and Basic Health Program Application… (Fact sheet). Centers for Medicare & Medicaid Services
Centers for Medicare & Medicaid Services. (2024, Apr. 22). Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities (Fact sheet). Centers for Medicare & Medicaid Services
Federal Register. (2024, May 10). Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities (89 FR 40876). GovInfo
Congressional Budget Office. (2025, Aug. 11). Distributional Effects of Public Law 119-21 (report & interactive). Congressional Budget Office
Congressional Budget Office. (2025, Aug. 4). Effects on Deficits and the Debt of Public Law 119-21. Congressional Budget Office
KFF. (2025, Aug. 4). Health Provisions in the 2025 Federal Budget Reconciliation Law; and (2025, Jul. 30) A Closer Look at the Work Requirement Provisions… (synthesizing CBO estimates and implementation timelines).
