HR1 Medicaid Cuts: What Happened and What’s Next

/in /by Sarah

HR1 Medicaid Cuts: What Happened and What’s Next

On July 4, the President signed into law HR1—“The Big Beautiful Bill Act,” a sweeping budget reconciliation package that makes historic cuts to healthcare, nutrition, and disability services. These revisions represent some of the most impactful and harmful changes to Medicaid and SNAP (food assistance) in recent history. They deeply affect people with disabilities, families, and communities nationwide, jeopardizing decades of progress and advocacy in disability rights.

What Does HR1 Do?

Massive Cuts to Healthcare and Nutrition

  • 17 million people are projected to lose their healthcare coverage by 2034
  • Cuts Medicaid funding to states by 20%
  • Largest cut to SNAP in U.S. history—a 20% reduction in state funding
  • Enacts work requirements for individuals age 19-64, who must work, or volunteer 80 hours a month
  • Requires more frequent eligibility verification- every 6 months rather than every 12 for adults
  • It limits how states can raise money to match their Medicaid responsibilities.

These cuts target core programs that support health, independence, and basic needs for millions of Americans—including people with intellectual and developmental disabilities (IDD).

It Costs Shifts to the States

States will now be responsible for administering these changes without funding to implement them.  They will then be forced to make difficult decisions about where cuts are made.

What Does It Mean for People with Disabilities?

While some work requirement exemptions exist:

  • Individuals on SSI or Medicaid waivers are exempt from work requirements
  • But 35% of Medicaid expansion enrollees have disabilities and do not receive SSI—they may still be subject to work rules

Even more troubling:

  • Medicaid waiver services (such as supported living, employment supports, and personal care) are considered “optional”, making them especially vulnerable under budget pressure.
  • State Legislators could respond by:
    • Narrowing eligibility for services
    • Lowering provider rates
    • Not funding new Waiver slots, which would create waitlists for services
    • Cutting services like Dental, Physical, Occupational, and Speech-language services

 Our Advocacy will be essential during the upcoming legislative session.  Our legislators need to hear from you NOW about protecting DD services!

 

 When Do These Changes Begin?

These changes are consequential, but we will not feel them all at once.  Many of the provisions in HR1 will take effect after the 2026 midterm elections. This means there is still time to raise our voices and advocate for changes before implementation begins.

Change Implementation Date
Federal guidance on HR1 Dec 31, 2025
End of ACA premium tax credits Dec 31, 2025
State compliance deadline Dec 31, 2026
Work requirements for Medicaid Dec 31, 2026
Frequent eligibility checks Dec 31, 2026
Cap on provider taxes Oct 1, 2027
End of retroactive coverage Jan 1, 2027
Reduction in State Directed Payments              2028

SNAP-related changes:

  • Work requirements (age 18–65): Start June 1, 2026
  • Child-dependent restrictions: Effective immediately (child is no longer considered a dependent at age 14 rather than age 18)
  • State cost-sharing & immigration restrictions: Begin after guidance is issued in late 2025

Reconciliation vs. Appropriations: Why This Moment Matters

You may be wondering: What’s the difference between the bill that passed (HR1) and what comes next?

HR1 passed through a special process called budget reconciliation:

  • It required only a simple majority in the Senate (51 votes)
  • It could not be filibustered, so it passed quickly with limited debate
  • It can only make cuts to mandatory services, including  Medicaid and SNAP

We are now entering the Federal Appropriations process for the fiscal year beginning Oct 1, 2025. This is a very different process:

  • Appropriations bills can be filibustered, meaning 60 votes are needed in the Senate
  • It focuses on discretionary services, not mandatory
  • This gives advocates and the public more time and power to influence what gets included—or left out
  • Lawmakers are under pressure to find bipartisan agreement

The President’s “Skinny budget proposed drastic cuts to discretionary services, including essential programs and infrastructure for the developmental disability services. But there is good news! The first drafts coming out of the Senate Appropriations Committees are mostly “flat,” and although there is a need for increases, they do not include big cuts.  Which means our continued advocacy is working—and it’s more important than ever.  The budget process still needs to move through the full Senate, and then the House will need to take up the budget bill.  Your advocacy will be essential every step of the way.

These are the discretionary budget programs we are closely tracking in the 2025–2026 Appropriations process.

 Potential Cuts to:

  • Protection & Advocacy systems (e.g., Disability Rights Washington)
  • Developmental Disabilities Councils (funds advocacy work at The Arc and Advocacy Days)
  • Centers for Independent Living
  • University Centers for Excellence in Developmental Disabilities (UCEDDs)
  • Projects of National Significance
  • Housing & Urban Development: 44% cut and conversion to block grants

Threats to IDEA (Special Education):

Funding Streams would be consolidated into a block grant that could lead to:

  • Reduced preschool programs for children with disabilities
  • Cuts to special education staff, including therapists, counselors, and paraprofessionals
  • Fewer training opportunities for school personnel

Thank You for Making a Difference

We want to extend a heartfelt thank you to every advocate who took action during the HR1 process. Your calls, emails, personal stories, and unwavering advocacy did make a difference. Because of your efforts, harmful provisions were delayed, changed, or softened. Your voice helped protect millions—and it’s needed now more than ever as we enter the appropriations phase.

What Can You Do Now?

Your voice matters. Here’s how to stay involved:

  •  Sign up for Action Alerts from The Arc of Washington and The Arc of the US
  •  Call or email or schedule a visit with your Congressional Delegation -they’re home now!
  •  Schedule a visit with your State Legislators
  •  Write a Letter to the Editor
  •  Tell your story—how has Medicaid helped you or someone you love?
  • Share updates on social media
  • Watch for our Legislative Session overviews starting in December
  • Join us for Advocacy Days starting in January

View the recording of our Medicaid Matters Update here.

The Fight Continues

This moment demands urgent, unified advocacy. The Big Beautiful Bill is a wake-up call: critical services for people with disabilities are on the line. We cannot allow these cuts to quietly reshape the future of healthcare, food access, and disability rights in America.

Stay informed. Speak out. Stand with us.