H.R. 1 Medicaid Reforms Target Fiscal Discipline and Rural Healthcare

The One Big Beautiful Bill Act, known as H.R. 1, introduces significant reforms to the Medicaid program without altering Medicare eligibility. While Medicare continues to serve Americans aged 65 and older, Medicaid has expanded over the years to include a broader group of beneficiaries, contributing to a doubling in spending from $420 billion in 2010 to $900 billion by the end of fiscal 2023. These reforms aim to refocus Medicaid on its original purpose—serving the most vulnerable populations and ensuring sustainable fiscal management. Key changes include prohibiting states from extending Medicaid to individuals who entered the U.S. unlawfully, implementing work requirements for able-bodied, working-age adults without young dependents, and increasing eligibility verifications. These measures seek to enforce fiscal discipline and promote personal responsibility while keeping Medicaid accessible to those in genuine need.

In addition to Medicaid reforms, H.R. 1 establishes a $50 billion Rural Health Transformation Fund to support rural hospitals facing financial challenges. These funds are designed to help rural healthcare providers recruit and retain staff, thereby addressing workforce shortages and sustaining critical access to care in remote areas. The bill also preserves Medicaid program flexibility, allowing states to tailor programs to local needs. For example, Nebraska recently secured a $700 million State Directed Payment agreement with the Centers for Medicare and Medicaid Services to enhance funding for its hospitals, benefitting both rural and urban communities.

Overall, H.R. 1’s Medicaid reforms and rural healthcare investment reflect a strategic effort to realign Medicaid’s focus, encourage work, and maintain program integrity amid rising national debt. These changes underscore ongoing legislative attempts to balance federal budget concerns with the healthcare needs of vulnerable populations. As the reforms take effect, stakeholders across states and healthcare sectors will monitor implementation outcomes to assess impacts on access, coverage, and fiscal sustainability.