Proposed Medicaid Shifts and Risks Under the Budget Reconciliation Act: Laxmi Patel

Proposed changes to Medicaid could significantly alter eligibility, coverage, and funding for millions of Americans.

In this interview with Laxmi Patel, chief strategy officer at Savista, she outlines key provisions under the “One Big Beautiful Bill” Act, such as new work requirements, shorter retroactive coverage, and stricter documentation rules. Patel also explains which patient populations are most at risk of losing coverage and why state-by-state impacts may vary widely.

This transcript has been lightly edited; captions were auto-generated.

Transcript

Can you summarize the proposed Medicaid changes under HR 1?

The proposed changes under HR 1, the Budget Reconciliation Act, are really set to bring significant shifts to Medicaid. There are some Medicare-specific influences, but Medicaid is the one that has the biggest shift from an impact perspective.

One of the first ones is work requirements for Medicaid eligibility. It mandates that any Medicaid beneficiary completes at least 80 hours per month of work or community engagement to maintain their coverage. It also increases the enrollment redetermination frequency. Right now, Medicaid eligibility is done on an annual basis; now it's going to shift to a biannual cycle, so every 6 months it's going to be a redetermination in coverage.

There's also a reduction in retroactive Medicaid coverage. Currently there's a 3-month retroactive period. If a patient gets enrolled into Medicaid and it's approved, they can [get] retroactive coverage for 3 months to cover their hospital or care that they received within that period. That's going to change to 1 month. It's going to limit hospitals to recover costs for those uninsured patients for a period of time.

There's also stricter eligibility and verification requirements from a documentation standpoint, such as residency and citizenship proof; there's proof of income, there's estate determination that's needed to be put in, and residency.

The last thing is really around funding for Medicaid. It introduces kind of phase reduction in the provider tax allowance and supplemental funding that states can provide for Medicaid reimbursement.

Which patient populations are most at risk of losing Medicaid coverage under the proposed changes, and how might that vary by state?

The proposed reforms really are expected to affect what we classify as that vulnerable population. That includes low-income families, seniors, individuals with disability, and really exacerbating this kind of inequality within the health care ecosystem that we have, because this is a group that really is served by Medicaid.

From a state perspective, it's going to vary state by state from a regulation perspective, so newly expanded states like North Carolina and Missouri, who may not have the infrastructure to manage the retroactive [coverage] and the redetermination from a churn perspective, may see delay in processing time. Providers may lose out on that retroactive coverage because of the shortened time period, or it may take a longer time to determine eligibility.

States with large immigration populations like California, Texas, and Florida—they're going to see a mass disenrollment because the patients aren't going to qualify. Other states providing more of the tax beneficiary, like Pennsylvania and Louisiana, are going to see a reduction in their reimbursement more quickly.