Minnesota Medicaid Cuts Under New Law Impact Eligibility and Healthcare Funding

Minnesota's recent legislative changes under the "One Big Beautiful Bill Act," signed in July 2025, introduce phased Medicaid cuts impacting eligibility and administrative requirements through 2032. Governor Tim Walz marked Medicaid's 60th anniversary by emphasizing its critical role in providing healthcare access and highlighting challenges posed by federal policy changes.

State officials detailed that new reporting requirements, framed as work reporting obligations, may complicate enrollment for working families and nursing home residents, many of whom rely heavily on Medicaid. North Shore Health's CEO expressed concerns over increased paperwork burdens and the potential strain on rural and critical access hospitals, despite the establishment of a Rural Health Transformation Fund aimed at mitigating these effects.

The state projects a $1.1 billion loss in healthcare funding, increased out-of-pocket costs for Medicaid enrollees, and anticipates over 62,000 individuals may drop private insurance due to premium hikes. These policy shifts underscore the evolving regulatory landscape and the consequential implications for Medicaid providers, payers, and beneficiaries in Minnesota's healthcare market.