Medicaid, Healthcare, and Labor

There is hype about the changes in Medicaid and how millions of people will be dropped from its rolls. Such will definitely happen. Millions of US citizens and noncitizens will be dropped from Medicaid. And as this has been said before repeatedly, millions of those noncitizens do the work citizens will not do. Also, the US is short labor which will only worsen over time even if no deportation actions were taken.

“US Labor Shortage Looms: Who Will Do the Work?” SHRM

In 2025, the US is facing a significant labor shortage. A large number of employers struggle to find suitable workers for open positions. The shortage is impacting various sectors, including construction and the service/hospitality industries. While the official unemployment rate is relatively low, the underlying issue is a mismatch between available workers’ skills and the needs of employers.

The following is the detail on Medicaid changes, where Tr__p’s big beautiful bill will impact it, and short labor and citizens.

Head’s up: Over half the MAGA Murder Bill’s healthcare carnage will kick in BEFORE the midterms, ACA Signups

Charles Gaba who I know from Michigan wrote the following piece on the impact of H.R. 1 O.B.B.B. that will screw millions of Americans which includes noncitizens. You know those people who pick up after the privileged who were born here or made honorary citizens.

Ever since the MAGA Murder Bill (officially H.R. 1, the so-called “One Big Beautiful Bill Act”) was passed by Republicans in the U.S. Senate & House and signed into law by Donald Trump a few days ago, I’ve seen a growing conventional wisdom taking hold on social media: People keep claiming that either all, “nearly all”or at least “most of” the budget cuts & other gutting of various programs and departments won’t actually kick in until after the November 2026 midterms.

Now, don’t get me wrong–most of those making these claims are well-intentioned; they’re saying this cynically, to underscore how disingenuous Congressional Republicans are by back-loading the pain until the midterms are safely in their rearview mirrors. And, to be fair, much of the damage won’t being until well after next November.

Over at The New Republic, Greg Sargent has taken this thinking one step further, noting that by delaying so much of the ugliness of the new law until 2027 or beyond . . .

Republicans know how unpopular all this will be. So they’ve structured the bill so the tax cuts land immediately, while many of the Medicaid cuts get going in 2027 and 2028. That’s meant to spare them in the midterms.

But there’s a wrinkle here worth appreciating. Those policies will start hitting right when JD Vance’s bid to succeed Trump is getting underway. For Vance—perhaps the most prominent evangelist for Trumpism’s supposed promise for the working class—to have to defend all of that carnage while running for president could yet prove a form of poetic justice.

Again, this is a fair statement, as far as it goes.

However, while I’m not an expert on any of the non-healthcare provisions, when it comes to the sections related to healthcare policy, a whole lot of the ugly will actually hit well before the midterms.

KFF has an excellent breakout of all of the various healthcare policy changes in both the House and Senate versions of the bill as they relate to Medicaid, Medicare, the ACA and even a few connected to Health Savings Accounts.

Overall, they break it out into 26 about Medicaid, 19 about ACA, 9 about Medicare and 11 about HSAs. However, 2 of the Medicare/Medicaid sections are identical since they impact both programs, and the Senate version (the one actually signed into law) didn’t include a lot of the House-passed provisions, so the grand total is actually:

• Medicaid: 19 total, 2 of which overlap w/Medicare
• Medicare: 5, 2 of which overlap w/Medicaid
• HSAs: 3
• ACA: 5

In addition, however, there’s also half-dozen other significant changes to the ACA via CMS’s recently-finalized “Integrity Rule”, as well as the expiration of the improved ACA subsidies provided under the American Rescue Plan Act & Inflation Reduction Act. Oh, and there’s also the automatic Medicare cuts triggered by PAYGO legislation.

All told, that’s around 40 different major policy changes impacting the U.S. healthcare industry . . . over half of which will either be fully or at least partially implemented before November 3rd, 2026:

NOTE: I’m using a blend of KFF’s language and my own below; please visit their site for more comprehensive descriptions of some of these.

MEDICAID Changes:

• January 1, 2026: Elimination of ARPA financial incentive to get non-expansion states to expand

The American Rescue Plan Act (ARPA) added a financial incentive for states that newly adopt expansion. To date, only two states have taken up this funding (Missouri & Oklahoma). It would provide anywhere between $70 million – $5.0 billion to the remaining 10 states if they expanded Medicaid under the ACA.

Under H.R. 1, that funding is now gone (not that any of the remaining states have been tempted so far anyway).

• October 1, 2026: Limit on ER FMAP payments for immigrants

Undocumented immigrants and some lawfully present immigrants are not eligible for federally funded Medicaid coverage. Emergency Medicaid reimburses hospitals for the costs of emergency care provided to immigrants who would qualify for Medicaid except for their immigration status, which hospitals are required to provide under federal law.

Under H.R. 1, starting next fall, these payments would be limited to the FMAP of each state.

• October 1, 2026: Dramatic reduction in definition of “Qualified Immigrant” for purposes of Medicaid eligibility

In addition to meeting other eligibility requirements, lawfully present immigrants must have a “qualified” immigration status to be eligible for Medicaid or CHIP. Qualified immigrants include:

• Lawful permanent residents (LPRs);
• refugees;
• individuals granted parole for at least one year;
• individuals granted asylum or related relief;
• certain abused spouses and children
• certain victims of trafficking;
• Cuban and Haitian entrants;
• citizens of the Freely Associated States (COFA migrants) residing in states and territories.

Many lawfully present immigrants must wait five years after obtaining qualified status before they may enroll in Medicaid; states may waive the five-year wait for children and pregnant individuals. Some states have state-only funded coverage programs for undocumented immigrants.

Under H.R. 1, starting next fall, the definition of “qualified immigrant” will be restricted to:

• LPRs;
• Certain Cuban and Haitian immigrants;
• Citizens of the Freely Associated States (COFA migrants) lawfully residing in the US;
• Lawfully-residing children and pregnant adults in states that cover them under the ICHIA option.

In other words, refugees, parollees, those granted asylum and even victims of domestic abuse and human trafficking are SOL.

• July 4, 2025 (Expansion States) or January 1, 2028 (Non-Expansion States): Restriction on State-Directed Payments

States may use “state directed payments” (SDPs) to require MCOs to pay providers certain rates, make uniform rate increases, or to use certain payment methods.

A 2024 rule on access to care in Medicaid managed care codified that the upper limit for SDPs is the average commercial rate for hospitals and nursing facilities, which is generally higher than the Medicare payment ceiling used for other Medicaid fee-for-service supplemental payments.

Under H.R. 1, the total payment rate would be capped at Medicare rates for states which have expanded Medicaid under the ACA, and at 110% of Medicare rates for non-expansion states.

States with existing arrangements would have to start reducing their payment rates down 10% per year starting in 2028.

• July 4, 2025: Prohibition of Medicaid payments to Planned Parenthood & other community service providers

Medicaid is prohibited from paying nonprofit providers, essential community providers primarily engaged in family planning services or reproductive services, provide for abortions outside of the Hyde exceptions and received $800,000 or more in payments from Medicaid in 2023.

This basically means Planned Parenthood is screwed, along with other Medicaid essential community providers.

I admit being a bit confused by KFF’s wording–they say the effective date is “Upon enactment for one year” which I assume means payments to PP/etc would only be cut off for a year? If so, this would still be devastating but not as horrible as a permanent ban.

Note: Just hours ago a federal judge has blocked this provision . . . although that could easily change by the time you read this . . .

• IMPORTANT: Even the controversial & much-debated Medicaid work reporting requirements which have sucked up so much political & media attention, which everyone keeps saying “won’t be implemented until after the midterms,” could potentially go into effect before Election Day 2026 after all.

The actual wording of the relevant legislative text is:

” . . . the first day of the first quarter that begins after December 31, 2026, or, at the option of the State under a waiver or demonstration project under section 1115 or the State plan, such earlier date as the State may specify.”

In other words, some states COULD potentially launch them BEFORE the midterms via a waiver if granted by the HHS Dept. This most likely refers to states like Arkansas, Indiana, New Hampshire & Ohio, where waivers were already approved by the first Trump Admin but were shut down by federal judges.

On the other hand, there will be a lot of political pressure from Republican leaders for those states not to implement them before the midterms to avoid the blowback, so they’re still unlikely to do so before December 2026.