How will medicaid cuts In the “Big beautiful Bill” Impact Home Care?

As of July 4th, the Senate reconciliation bill has been signed into law. It represents a sweeping set of changes in national priority, including a set of major cuts to Medicaid which have caused pushback from across the healthcare industry.

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Various organizations including the American Medical Association and the National Rural Health Association have released statements describing ways that the new law will limit care available to vulnerable populations; additionally, various hospital systems and nursing homes, especially in rural areas, have already announced closures due to lack of future funding.

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The New Law’s Risks To Home Care

The question on everyone’s mind: will the law affect home care to the same degree as other healthcare sectors?

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Here’s what we know:

• Large amounts of money are being taken out of Medicaid funding, specifically for those who are on Medicaid as part of Medicaid expansion.
• This is primarily being accomplished through work requirements for people aged 19-64.
• States will be receiving less money from the federal government.
• Medicaid recertifications will happen every six months instead of the current annual system.

Nuance & Considerations

However, there are nuances to consider regarding its impact in home care:

• People 65 or older and under 19 won’t have work requirements.
• There are special provisions for those with certain disabilities that will waive the work requirement.
• States are in charge of administering Medicaid, meaning that the details will likely vary widely from state to state.

Because work requirements are a core mechanism of the budget cuts, some of these points seem to suggest the impact on in-home care providers (whose clients are generally over 65) may be lessened in some respects relative to other healthcare providers.

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The Main Headlines

So, what are the takeaways?

• Many people are going to lose Medicaid coverage either from work requirements, added red tape, or direct budget cuts.
• Providers will need to ensure that they are running proper eligibility checks for Medicaid clients.
• Providers should be prepared for states to potentially pull back on hours and/or for reimbursements to be reduced or stagnate.
• Providers need to stay closely in tune with state Medicaid organizations and increase their focus on compliance.

Further Reading & Resources

• Read the full text of the bill
• National Alliance For Care At Home statement
• American Medical Association statement
• National Rural Health Association statement
• KFF Analysis of the Congressional Budget Office Estimates
• KFF Analysis of Rural Area Impact
• KFF Health Provisions in the 2025 Federal Budget Reconciliation Bill
• Home Health Care News coverage of the bill

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