The major tax cut bill passed by Congress this month, dubbed by President Donald Trump the “One Big, Beautiful Bill,” includes significant changes to Medicaid. The longstanding federal health insurance coverage program will see a $1 trillion reduction in projected spending over the next decade.
The changes could have major impacts on some of the 3 million Medicaid users in Pennsylvania, with some nonpartisan analysts predicting many will lose insurance coverage.
Here’s what you need to know about the new law.
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What is Medicaid?
Medicaid is a federal health insurance program established in 1965, paying medical providers directly for patient care just as a private insurer would. The program was established to primarily cover children, seniors and parents below a certain income level, and people with disabilities. Many states, including Pennsylvania, have expanded eligibility to include anyone under a certain income level.
The program is mostly funded by the federal government but is administered by the states. Pennsylvania’s Medicaid program is also known as Medical Assistance.
Almost a quarter million Allegheny County residents use Medicaid, and according to a state-run website, the program covers 39% of Pennsylvania children and 59% of nursing home residents.
What is being changed?
The new law, signed by Trump July 4, cuts back on Medicaid spending in several ways. The largest is by creating a work requirement.
The law requires the roughly 20 million people covered under the Affordable Care Act’s Medicaid expansion — mostly adults without dependents — to record 80 hours per month of work, education or community service.
The law calls for exceptions to the work requirement for people who are “medically frail” and gives states the option to grant exemptions for people who end up in an inpatient hospital.
It’s not yet clear how Pennsylvania officials, tasked with administering the new rules, will apply the requirement. The law dictates that the state must reverify whether each recipient meets the requirement at least once every six months.
Who will lose coverage?
The nonpartisan Congressional Budget Office estimated that the law would result in 11 million people losing health coverage in the next 10 years. Pennsylvania’s Department of Human Services estimated that 310,000 would lose coverage in the commonwealth, a figure that includes 25,800 in Allegheny County.
Republicans, who almost unanimously supported the law’s passage, have said they are seeking to eliminate wasteful Medicaid spending and to take coverage away from people who don’t need it. Sen. Dave McCormick, a Republican from Pittsburgh, said the cuts are aimed at “working-age men who aren’t working.”
But a KFF analysis found that among adult Medicaid recipients who are below retirement age and not on Social Security disability programs, 92% were working full- or part-time or preoccupied by caregiving, illness or disability, or school.
Opponents of the new law predict that many people who meet the work requirement will lose coverage due to a failure to navigate the needed paperwork.
“You can imagine that some people would be disproportionately impacted,” said Marian Jarlenski, a professor at the University of Pittsburgh’s School of Public Health. “It could be people who lack high speed internet service, people in rural communities where they don’t have broadband internet access.”
State Rep. Mandy Steele, D-Fox Chapel, suggested at a press conference last week that work requirements are “designed to make things intentionally difficult for Medicaid recipients who are already struggling.”
The law also prohibits federal funding for Medicaid coverage for people without legal immigration status.
When do changes take effect?
The Medicaid work requirements go into effect at the start of 2027.
Some people could see health care costs rise sooner, though, because of something left out of the bill.
Subsidies for people paying for insurance plans through the Affordable Care Act are set to expire at the end of 2025, and Congress has made no moves to extend them so far. If they are not extended, enrollees would face premium payments on average 75% higher starting next year, according to a KFF analysis.
Charlie Wolfson is Pittsburgh Public Source’s local government reporter. He can be reached at charlie@publicsource.org.
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