Would you take a $500 payday if it meant millions of children, elderly people, and US residents with disabilities might lose access to health insurance and food assistance benefits? How about if it meant that hundreds of rural hospitals and long-term care facilities for seniors would be forced to close their doors?
On July 4, 2025, HR 1, the One Big Beautiful Bill (OBBB) Act, passed into law, cementing the largest spending cut to social services in US history totaling almost $1trillion. The OBBB Act was passed under the guise of reducing waste and fraud from the long-standing programs of Medicaid and the Supplemental Nutrition Assistance Program (SNAP). It represents one of the largest upward wealth transfers in US history. One estimate from the Joint Committee on Taxation1 shows that around half of the tax cuts, $500 billion of the total $1 trillion, will go to the top 0.1% of earners.1,2 Congressional Budget Office analyses show that an average US family may see only a $500 annual increase in resources, while a family in the top 10% of earners will see more than $12 000 in annual resources.3,4
But how will the OBBB Act fund these trillion-dollar tax cuts? The Congressional Budget Office estimates that 16 million more people will become uninsured in 10 years due to this legislation, saving billions of dollars in the process.5 The act seeks to limit Medicaid in a few ways. First, the OBBB Act directly limits funding for state Medicaid, leaving it up to individual states to find the cash to continue funding these vital programs. The most significant cost-cutting method involves new work eligibility requirements. Under the OBBB Act, enrollees must now provide documentation of 80 hours of work or community service per month to prove qualification status to keep coverage. Proponents argue this strategy encourages efficient use of funds and encourages enrollees to seek gainful employment-based coverage alternatives. However, this method has been shown to be a failed experiment. Work requirements have been implemented in Arkansas and Georgia,6 and were a catastrophic failure. In Arkansas, 17 000 adults or 12% of Medicaid enrollees fell off coverage within only 3 months of work requirements being implemented.7 In both Arkansas and Georgia, increased documentation burdens caused working people to fall off coverage and had no impact on the work status of Medicaid enrollees.7,8 It is easy to imagine scenarios in which enrollees miss documentation deadlines due to full-time work, low literacy, caring for kids or family members, limited access to the internet, or simply being unaware of work documentation requirements.
In fact, most people with Medicaid work a job or are exempt for reasons such as disability, being a full-time caretaker, old age, or being in school. Furthermore, most Medicaid enrollees work in low-paying or gig jobs that do not provide health benefits. The purpose of these work requirements is to cut costs by adding administrative red tape to bump people off coverage. There is cruelty in this structure of cuts because the government relies on people not being able to keep up with needless documentation burdens. This act will strip food and health care resources from the poorest and most vulnerable—most of whom work—while padding the bank accounts of the wealthiest citizens in the form of tax cuts. This act is antithetical to the oaths and values of medical professionals to be healers and advocates for sick and underprivileged people. It will only work to promote hunger, increase chronic disease proliferation, and put further stress on the already overburdened health care system.
Why should you care? As a reader, you may be seeing more money in your pocket as a result of the OBBB Act. However, these cuts to Medicaid are dangerous and will contribute to individual medical and financial hardship while damaging the health care system as a whole. It’s important to understand that we have created a system that is reliant on the flow of Medicaid dollars.
Rural hospitals are especially dependent on Medicaid reimbursement compared with urban counterparts and will have difficulty operating with fewer available Medicaid dollars. The US has already seen a surge in rural hospital closures due to financial stress, with around half of rural hospitals already operating with negative margins.9–11 This Medicaid cut will not decrease the number of sick people, strokes, or heart attacks, instead it will only change the number of patients who do not have insurance, which translates to more financial hardship for both patients and hospitals. It’s not just rural hospitals that will be affected. Seattle Children’s Hospital recently announced major layoffs,12 citing cuts to state Medicaid as a major reason. We shouldn’t be surprised to see more layoffs, increased hospital wait times, facility closures, steeper bills for everyone, and further refusal to care for patients without insurance.
Similarly to rural hospitals, home health care services and long-term care facilities depend on Medicaid and will be forced to reckon with lower reimbursement and decreased total revenue. Medicaid is the largest single payer for long-term services and supports,13 which includes everything from home health care and supplies for children with disabilities, to long-term and nursing home care for adults with Alzheimer disease and dementia. In fact, 63% of the 1.2 million individuals in nursing facilities have their care paid for by Medicaid.14 Home health services also fall under long-term services and supports, and are incredibly important for hospitals to discharge patients safely and efficiently so that hospital resources can be used for the sickest people who need them. Many of my own patients living with disabilities are also dependent on daily home health care services to complete daily tasks such as getting dressed, bathing, or preparing meals. Reducing the funding stream for these services will force layoffs and service reductions, which will only harm the most vulnerable community members.
An insured and healthy population is good for all of society. Offering accessible preventive care and decreasing the burden of chronic disease benefits everyone. Such steps decrease stress on the health care system and allow our neighbors, family, and community members to live productive, dignified, and meaningful lives. I am all for efficiency and practicality, but this haphazard cut to Medicaid clearly does not achieve either of these goals. We should be looking for ways to increase efficiency in the system that actually benefits citizens without requiring millions to be kicked off insurance.
When it comes down to the wire, a tax break that disproportionately helps the wealthiest people is just not worth the devastation that Medicaid and SNAP cuts will bring to US families in the most need. It is unconscionable and unnecessary to sacrifice the health and wellbeing of community members in exchange for a tax cut.
So, would you still take that $500?