The One Big Beautiful Bill Act (OBBBA) isn’t a modest adjustment to healthcare policy. It’s a sweeping realignment of how public programs are funded, accessed and regulated, with direct financial implications for every part of the health system.
At its core, OBBBA aims to reduce federal Medicaid spending by more than $1 trillion over the next decade. However, this significant figure leads to complex local issues for providers, payers and state agencies: coverage disruptions, increased administrative burden, funding constraints and higher financial risks.
As the law's initial provisions begin to roll out over the next two years and beyond, healthcare leaders should look beyond headlines and prepare for the operational and strategic impacts of these changes.
At FinThrive, we’ve developed the OBBBA Timeline to help health systems, payers, and providers understand what key provisions are happening and when. The timeline also assesses each provision's impact and implications to assist organizations in staying ahead.
Coverage Losses Will Impact Revenue and Operations
One of the most notable changes is the shift in Medicaid eligibility policies. Redeterminations will now occur every six months instead of once a year, and states must establish mandatory work requirements for certain Medicaid recipients. Retroactive eligibility will be limited to only 30 days.
While these policies aim to improve program integrity, the financial impact is unavoidable: fewer people will stay enrolled, and coverage churn will rise. According to the Congressional Budget Office, projections show that up to 17 million people could lose coverage because of OBBBA’s reforms and other policy changes. Many of those losses will be procedural as patients who are still eligible but do not meet new administrative or documentation requirements.
The impact on providers is twofold. First, there will be an increase in uncompensated care and self-pay volume, which heightens revenue risk. Second, many coverage lapses will be identified at the point of service, putting pressure on access teams and requiring more advanced eligibility screening and patient financial communication.
RELATED: OBBBA Timeline
Medicaid Funding Channels Are Tightening
OBBBA also alters how states fund their share of Medicaid. The law gradually reduces provider tax thresholds—from a 6% safe harbor to 3.5%—and restricts supplemental payments, including state-directed payment (SDP) programs. Meanwhile, states will lose the enhanced Federal Medical Assistance Percentage (FMAP) expansion bonus and must demonstrate budget neutrality for any new Section 1115 waivers.
In practical terms, this reduces the resources states can dedicate to Medicaid and limits their flexibility in supporting hospital reimbursement models, especially those tied to safety net funding or innovation waivers.
This could create significant challenges for hospitals in maintaining Medicaid rates and supplemental support. The ripple effect is apparent: increased unpredictability in state-level funding, greater vulnerability for high-Medicaid-volume providers and increased pressure on operating margins.
Medicare Eligibility Reforms Will Add to Payer Mix Pressure
Along with Medicaid updates, OBBBA also establishes revised criteria for Medicare eligibility, set to take effect in 2027. Although specific rulemaking is still underway, the trend is clear: reduced access to Medicare will impact near-eligible populations and increase pressure on ACA plans, commercial insurers or self-pay options.
Hospitals must prepare for payer mix volatility as these reforms ripple through the healthcare system, especially for those already managing dual-eligible and aging populations with narrow margins and complex needs.
Administrative Complexity Will Require New RCM Capabilities
What unites all these changes is a rise in administrative complexity. Redeterminations, work requirements, waiver tracking, eligibility verification and financial assistance workflows will occur more often and be more regulated.
Manual processes simply won’t scale. To stay compliant and protect revenue, providers will need to invest in:
- Automated eligibility and coverage verification
- Predictive analytics for financial modeling and payer mix shifts
- Streamlined patient onboarding and charity workflows
- Integrated revenue platforms that consolidate vendor functions and lower the total cost of ownership
At FinThrive, we collaborate with clients to align these capabilities with upcoming regulatory requirements, allowing them to maintain access, minimize disruption and optimize financial performance.
RELATED: Navigate the Future of Healthcare Compliance
FinThrive’s Commitment
Although the full impact of the One Big Beautiful Bill Act will take years to materialize, the initial provisions are happening now, with additional measures rolling out in 2026 and 2027. Leaders cannot afford to adopt wait-and-see positioning. Proactive planning is crucial.
This legislation is more than just about spending cuts; it’s about reshaping the rules for participation in public healthcare programs. Hospitals and health systems that are now preparing by aligning strategy, technology and operations will be in a much stronger position to adapt.
The One Big Beautiful Bill Act is launching a new chapter of healthcare policy focused on fiscal discipline, regulatory oversight and coverage recalibration. Providers need clarity, flexibility and the right technological base to advance as these reforms unfold.
FinThrive is committed to assisting our partners in navigating this transformation by providing insights, tools and expertise to manage risk and lead through change.
The content provided by FinThrive is intended solely for informational purposes, based on details known at this time and should not be construed as legal advice. For specific legal guidance, please consult an attorney.
About the Author
Jonathan G. Wiik, MSHA, MBA, CHFP
Vice President, Health Insights
Jonathan Wiik, VP of Health Insights at FinThrive, has over 25 years of healthcare experience in acute care, health IT and insurance settings. He started his career as a hospital transporter and served in clinical operations, patient access, billing, case management and many other roles at a large not-for-profit acute care hospital and prominent commercial payer before serving as Chief Revenue Officer. Wiik works closely with the market and hospitals on industry best practices for revenue management. He is considered an expert in the industry for healthcare finance, legislation, revenue management and strategic transformation.
