ROTHKOFF LAW GROUP SYNOPSIS OF KEY MEDICAID AND RELATED PROVISIONS IN ONE BIG BEAUTIFUL BILL ACT

 

One Big Beautiful Bill Act

  • Bill passed by House on May 22
  • Senate significantly amended the bill and considered it this past weekend during multi-day vote-a-rama, and passed by Senate on July 1
  • Following Senate passage, bill returns to the House
  • House Rules Committee will convene today to set rules for debate
  • House vote potentially happening this week
  • Many House members pushing to amend Senate bill
  • If House amends the bill, it will return to the Senate
  • President Trump set unofficial deadline of July 4 for Congress to put bill on his desk for signature

 

One Big Beautiful Bill Act – Key Medicaid Policies*

  • Retroactive coverage: shorten the retroactive coverage period from three months prior to application to one month (for ACA expansion adults) and two months (for all other Medicaid groups)
  • Home equity values: Establish a ceiling of $1,000,000 for permissible home equity values for individuals when determining allowable assets for Medicaid beneficiaries prohibit use of asset disregards from being applied to waive home equity limits
  • Biden-era rules: Moratorium implementation or enforcement of Biden-era Eligibility & Enrollment, Medicare Savings Program, and Nursing Home Staffing Final Rules through October 1, 2034 (except certain provisions of those rules that have already beenimplemented)
  • Non-Citizen Medicaid eligibility: Restrict Medicaid coverage to only three groups of non-citizens (1) lawful permanent residents; (2) certain Cuban and Haitianimmigrants; and (3) citizens of the Freely Associated States (COFA migrants) residing in states and territories
  • Newhome-and community-based services (HCBS) waiver opportunity: A new provision creating a new Section 1915(c) waiver opportunity to allow states to expand HCBS to individuals who do not have a determination of need of institutional-level of care, appropriates $100 million in FY 2027 to support states

 

One Big Beautiful Bill Act – Other Medicaid Policies

 

  • Financing and payment changes
  • New restrictions on states’ ability to use provider taxes to fund the nonfederal share of Medicaid (greater restrictions for expansion states)
  • Limitations on state-directed payments(higher limit for non-expansion states)
  • Rural health systems: A new provision allocating $50 billion to the Administrator of CMS over 5 years to be distributed to states to help invest in rural health systems
  • Medicaid work requirements: Work requirements for Medicaid beneficiaries age 19 – 64 who do not meet an exception
  • Additional changes targeted at Medicaid expansion adults
  • More frequent eligibility redeterminations (at least every six months)
  • Cost sharing on most services

 

One Big Beautiful Bill Act – Tax Policies

  • Makes permanent the reduced individual tax rates provided under the Tax Cut and Jobs Act
  • Increases standard deduction permanently for individual and joint filers
  • Adds a $6,000 “bonus” deduction for individuals 65 and older who do not itemize and earn less than $75,000 (or $150,000 for couples) through 2028 – phase outs for seniors with higher incomes
  • New deduction on tips, up to a $25,000 cap, and new deduction on overtime pay, up to a $12,500 cap, through 2028, with some conditions
  • Raises the SALT limit to $40,000 through 2029, but with limits for individuals earning more than $250,000 or couples making more than $500,000
  • Raises debt ceiling by $5T (vs. $4T in House bill)

One Big Beautiful Bill Act – Tax Policies

  • Makes permanent estate and gift tax exemption of $15 million (inflation-adjusted) starting in TY 2026
  • Revises ABLE accounts:
  • Permanently allows additional contributions to ABLE accounts beyond the gift tax annual exclusion amount (up to the lesser of the federal one-person poverty limit or their compensation) starting in 2027
  • Permanently allows an additional year of inflation adjustment for the base amount of the limit
  • Permanently allows designated beneficiaries who make qualified contributions to their ABLE account to qualify for the Saver’s Credit
  • Permanently allows tax-free rollovers of amounts in Section 529 qualified tuition programs to qualified ABLE programs
  • Permanently excludes from taxable income the discharge of student loans due to death or disability
  • Expands the 529 “qualified tuition program” — which allows tax-free withdrawals to cover eligible higher education costs such as tuition, books, and room and board — to be used for additional expenses including education-related therapies for students with disabilities, up to a $20,000 withdrawal amount cap.

 

One Big Beautiful Bill Act – SNAP Policies

  • Subjects adults aged 55 to 64 and adults living with children aged14 or older to work requirements for the first time
  • State waivers available under certain conditions
  • Beginning in fiscal 2028, requires states to be responsible for funding portion of SNAP benefit costs (up to 15% based on its benefits payment error rate) (lower than 25% House max)
  • Waiver for states with higher error rates (designed to benefit Alaska)
  • Reduces federal share of administrative costs from 50% to 25% beginning in FY 2027