The One Big Beautiful Bill: A federalist Medicaid manifesto?
Thirteen years ago, the federal government launched Obamacare’s first open enrollment. The disastrous rollout of Healthcare.gov’s glitch-ridden website became a metaphor for the Affordable Care Act’s full-blown meltdown. But the One Big Beautiful Bill Act (OBBBA) has the potential to eliminate the ACA’s worst bugs by allowing states to implement commonsense Medicaid reforms that serve the most vulnerable Americans, conserve vital state resources, and improve the health of all enrollees — reforms numerous states have long requested but which the previous administration denied.
Unfortunately, no one can deny the need to reform Medicaid, which the ACA expanded to those earning up to 138% of the federal poverty level. Coupling this with a provision forcing every eligible applicant in the Obamacare exchanges to sign up for Medicaid or the Children’s Health Insurance Plan (CHIP) even if they prefer private coverage gave birth to a bumper crop of government dependents. One out of every three U.S. residents is now enrolled in Medicaid or CHIP — a 43% increase since 2012. As a result, the Medicaid budget posted the largest one-year increase in two decades in 2023. The Centers for Medicare and Medicaid Services (CMS) projects Medicaid spending will surge from $804 billion to more than $1.2 trillion by 2031.
The proponents of single-payer health care soon learned the immutable law of supply and demand: As the number of enrollees rose, the quality of care declined. Medicaid expansion flooded the pool of Medicaid recipients with 20 million people without a change in the number of medical providers. While the ACA lengthened ambulance wait times everywhere, expansion states felt twice the impact. They also saw increased emergency room usage, as well as longer ER waiting times (up 10%) and more patients leaving the ER without seeing a doctor (15%). In traditional doctors’ offices, the New England Journal of Medicine found a “significant increase” in the number of low-income Americans “delaying care because appointments were not available soon enough or because wait times were too long,” apparently due to “additional strain on medical providers to absorb new demand.”
The OBBBA began addressing these problems by empowering states that spent four years petitioning federal regulators for relief in vain.
The president’s signature second-term legislation curtails federal financial incentives for more states to expand Medicaid by ending the Biden administration policy of paying non-expansion states an extra 5% Federal Medical Assistance Percentage (FMAP) reimbursement to change their policy. In fact, nine states had trigger laws ending Medicaid expansion if the FMAP rate drops below 90% (and South Dakota will ask voters to adopt a ballot initiative with the same terms next November). These initiatives show that states will accept federal tax dollars — and federal strings — to enact programs they do not support as long the funds are perceived as coming from somewhere else.
The new law significantly strengthens Medicaid’s health by prioritizing American citizens and mandating that state officials conduct eligibility checks at least once every six months. CMS has identified 2.8 million federal healthcare recipients wrongly enrolled in Medicaid or CHIP; experts estimate ineligible enrollments top 6.4 million. Medicaid’s improper payments totaled $31.1 billion in 2024, or just over 5% of all payments — down from nearly $100 billion in 2021, when Medicaid made more than one in every five expenditures erroneously. In February,a Department of Health and Human Services audit revealed Colorado had spent $7 million, including $3.8 million of federal funds, paying Medicaid claims on behalf of 9,000 dead enrollees. Eliminating the bloat helps stave off insolvency.
The OBBBA requirement that work-capable recipients without dependents spend 80 hours per month in work, education/training, or community service ends the federal government’s overruling of similar state requirements. In all, 22 states sought waivers to enact work requirements during the first Trump administration. The president granted waivers to 13 states — all of which the Biden administration withdrew in accordance with Executive Order 14009 (since rescinded). Only Georgia prevailed after a legal battle that delayed the policy’s implementation by two years. Yet state governments continued signaling their support for this popular measure. South Dakota voters passed a state referendum demanding work requirements in 2024. While the Biden-Harris administration refused to approve an Arkansas waiver extending work requirements, Gov. Sarah Huckabee Sanders submitted a similar request eight days after President Trump’s second inauguration.
Requiring the unemployed to leave a sedentary lifestyle will pare back Medicaid rolls by 5.3 million even as it betters Medicaid recipients’ physical and mental health. “Those who are unemployed report feelings of depression, anxiety, low self-esteem, demoralization, worry, and physical pain. Unemployed individuals tend to suffer more from stress-related illnesses such as high blood pressure, stroke, heart attack, heart disease, and arthritis,” states an HHS document. Connecting work-capable people with employment or training potentially unleashes their untapped potential; encourages physical activity; and makes Medicaid recipients eligible for superior, employer-provided health insurance.
Rather than suppressing promising state policies, the OBBBA implements them by requiring states to charge the Medicaid expansion population $35 per service, beginning in 2028. The Healthy Indiana Plan (HIP) found requiring Medicaid recipients to pay something toward their own healthcare increased levels of preventative care and reduced emergency room usage. It also benefited a facet of well-being that defies quantification: self-respect. A federal report noted, “Several [HIP] enrollees in the focus groups echoed this sentiment of feeling good about making the payment because it reduced the stigma or guilt associated with ‘depending on the government.’” Yet during its first year in office, the Biden administration unilaterally ordered Montana to stop charging monthly Medicaid expansion premiums. “After the Biden administration’s refusal to allow Montana to implement these requirements, my administration committed to swiftly achieving this goal as quickly as possible in partnership with the Trump administration,” wrote Gov. Greg Gianforte this September.
Eliminating the bloat helps stave off insolvency.
President Trump’s willingness to learn from state policy successes indicates he may be open to approving hopeful new proposals. Idaho Gov. Brad Little’s H.B. 345 allows the Medicaid expansion population to purchase an insurance plan through the exchanges, giving them access to a wider body of physicians, increasing the sense of personal agency and responsibility, and potentially saving tens of billions of dollars a year if expanded nationally. Similarly, Arizona has sought a five-year lifetime limit for able-bodied individuals between the ages of 18-55 receiving Medicaid benefits. Paving the way for work-capable individuals to experience better health outcomes through private insurance helps them, just as eliminating unnecessary Medicaid enrollment helps those who need it most.
The ACA inflated costs, worsened outcomes, and stripped away consumer choice. Thirteen years later, medical bills are soaring, insurers and hospitals say they’re broke, and taxpayers are footing the bills of states that expanded government the most. The OBBBA opens a partnership with states to improve physical, financial, and constitutional health.
Let government-expanding federal mandates glitch out on their own.
V. Rev. Benjamin Johnson (@therightswriter) is an Eastern Orthodox priest with more than two decades of experience as a conservative editor, commentator, and radio talk show host. His views are his own.
