The One Big Beautiful Bill Act was signed into law on July 4, 2025. It cut federal Medicaid funding by more than $900 billion over ten years, the largest reduction in the program’s history. At the time, the Congressional Budget Office projected that roughly 11.8 million people would lose Medicaid coverage in a typical month over the next decade. Those were projections. This is what has happened in the year since. Medicaid enrollment has dropped by 3.8 million people. Two million fewer children are enrolled in Medicaid and the Children’s Health Insurance Program than were enrolled when the cuts were signed. Hospitals across the country have closed maternity wards, shut down infusion clinics, and laid off staff, with administrators citing the federal cuts directly. States are cutting provider reimbursement rates, halting services, and restricting eligibility beyond what federal law requires, because the alternative is running out of money. One-third of all rural hospitals in the United States are now at risk of closing. We covered what the law said when it passed. This is what it is doing.
The Coverage Losses So Far
Between March 2025 and March 2026, Medicaid and CHIP enrollment declined by 3.8 million people, a drop of roughly 6 percent. Two million of those were children. The declines are not uniform across states — they reflect the rollout of new eligibility reviews, work requirement implementation timelines, and the narrowing of who qualifies. The 3.8 million figure does not include people who lost coverage through the Affordable Care Act marketplace after enhanced federal subsidies expired at the end of 2025: roughly 4 million people dropped ACA plans in early 2026 when premiums spiked after the subsidy lapse. Combined across Medicaid and the ACA marketplace, more than 8 million people have lost health coverage in the year since the law was signed. The work requirements in the One Big Beautiful Bill, which require adults between 18 and 64 to document 80 hours per month of employment, education, or community service, are still rolling out. The CBO projects that between 4.9 and 10.1 million additional people could lose Medicaid under the work requirements alone by 2028. The 3.8 million is the beginning of what the CBO projected, not the end.
Hospitals: Maternity Wards, Infusion Clinics, Layoffs
Public Citizen analyzed the financial exposure of hospitals across the country and identified 446 hospitals at high risk of closing or significantly cutting services due to the Medicaid cuts. At least one at-risk hospital exists in 44 states and Washington, D.C. The closures and service cuts are already underway. In Georgia, St. Mary’s Sacred Heart Hospital ended its maternal health services, with administrators citing the congressional Medicaid cuts as a key factor in the decision. In Virginia, Centra Southside Community Hospital closed its labor, delivery, and OB-GYN surgical services. In Indiana, Greene County General Hospital in Linton ended its obstetrics program in January 2026. These are not projections. They are decisions that have already been made, and the services that were cut are not coming back. In Iowa, a healthcare company closed multiple clinics and laid off 67 staff members at a Des Moines hospital, citing a projected $1.5 billion in annual revenue reductions from the federal cuts. Hennepin Healthcare in Minneapolis announced plans to permanently cut about 100 positions and consolidate services, citing a roughly $50 million budget shortfall driven in part by uncompensated care and declining Medicaid revenue. Alameda Health System in California has estimated it will lose more than $100 million annually by 2030. Teton Valley Health Care laid off 26 employees in January 2026 and closed its infusion clinic. In Oklahoma, the INTEGRIS health system projects $130 million in funding losses from the combined Medicaid and Medicare cuts in the law. Nationally, nearly 60 percent of rural hospitals no longer deliver babies. Since 2020, at least 117 rural hospitals have eliminated or announced plans to eliminate their labor and delivery units.
The Rural Hospital Crisis
734 rural hospitals, roughly one-third of all rural hospital facilities in the United States, are currently at risk of closing. More than 40 percent of rural hospitals are already operating at a loss. Rural hospitals are on pace to absorb an estimated $125 billion in cuts over the decade as a direct result of the law. The Big Beautiful Bill included a $50 billion Rural Health Transformation Program, presented as a fund to cushion the blow for rural health care. Independent analysis found that the fund covers approximately 37 percent of the estimated loss in federal Medicaid funding in rural areas. The remaining 63 percent is a gap that rural hospitals are expected to close through service cuts, staff reductions, or closure. The disproportionate share hospital payments — known as DSH payments, which are extra Medicaid funds that go to hospitals serving a high proportion of low-income and uninsured patients — were cut beginning October 1, 2025. Those cuts total $8 billion in fiscal year 2026 alone and $24 billion over the following two years. In Maine, rural hospitals face revenue losses that could exceed their total net income from 2023. In Iowa, Montgomery County Memorial Hospital is projected to lose nearly $960,000 in patient revenue in 2026 and could end the year with negative net income. The pattern is the same in state after state: small rural hospitals that were already operating on thin margins are now facing funding losses that exceed what they can absorb by cutting costs.
What States Are Doing to Absorb the Costs
States have limited options when federal Medicaid funding is cut: they can cut provider reimbursement rates (which reduces what doctors and hospitals are paid for treating Medicaid patients), cut benefits or services, restrict eligibility, or find money elsewhere in the state budget. All of those choices have consequences, and states are using all of them. Colorado faced a $1.5 billion Medicaid-related budget gap in its 2026 legislative session. To close it, state lawmakers cut provider reimbursement rates by 2 percent and capped the compensation that caregivers can receive for providing in-home care to family members with intellectual or developmental disabilities. In Montana, the state health department announced in April 2026 that it would stop reimbursing for doula services under Medicaid, directly citing the federal funding gap from the Big Beautiful Bill. On eligibility, several states have moved to restrict coverage beyond what federal law requires. Louisiana and Wyoming have enacted laws limiting Medicaid applicants to a single opportunity to verify their citizenship, a provision that policy analysts say will result in eligible people losing coverage because of documentation errors rather than ineligibility. North Carolina ended optional Medicaid coverage for lawfully residing children and pregnant immigrants. Four states have eliminated Medicaid coverage for GLP-1 medications used to treat obesity, cutting off coverage for a class of drugs that independent evidence finds reduces hospitalizations and long-term health costs. The states making these cuts are not doing so because of administrative preference. They are doing so because the alternative — running budget deficits or cutting other programs — is not available to them under their state constitutions.
What Comes Next
The coverage losses and hospital cuts documented above reflect the first year of implementation. The largest provisions in the Big Beautiful Bill have not yet fully taken effect. The new work requirements apply to adults between 18 and 64 and require 80 hours per month of documented employment, education, or community service. The implementation timeline varies by state but the requirement is rolling out across the country in 2026. Research on prior state-level work requirement experiments found that most people who lost coverage under work requirements were already working — they lost benefits because they could not navigate the paperwork documentation requirements, not because they were not working. The CBO projects an additional 4.9 to 10.1 million people could lose Medicaid under the work requirements by 2028. Stricter eligibility reviews, shorter retroactive coverage periods, and new documentation requirements are also still coming. What has happened so far — 3.8 million people losing coverage, hospitals closing maternity wards, states cutting provider rates and restricting eligibility — is the result of the law’s early provisions. The larger provisions are still arriving. Rural hospitals that are currently at risk of closing will face those provisions without the operating margin to absorb them. The 37 percent the Rural Health Fund covers will not change. The question for the next two years is how many of the 734 at-risk rural hospitals are still open when the rest of the law lands.