The deadlines are arriving.
Donald Trump signed the One Big Beautiful Bill Act on July 4, 2025. The House passed it 218 to 214. The Senate passed it 51 to 50. The bill included nearly $880 billion in cuts to Medicaid over the next decade. Congress called it a budget bill. The Congressional Budget Office called it the largest reduction in Medicaid funding in the program’s history. And this year, the provisions start taking effect.
Here is what is actually in it.
The Money
The $880 billion figure comes directly from the CBO. It represents the total reduction in federal Medicaid spending over ten years. States will absorb $665 billion of that shortfall through reduced federal matching funds. Rural communities alone are projected to lose $155 billion in Medicaid investment.
The federal government has long matched state Medicaid spending through what is called the Federal Medical Assistance Percentage. For states that expanded Medicaid under the Affordable Care Act, the federal government covered 90 percent of costs for expansion populations. That arrangement ended January 1, 2026. The match for expansion populations is being phased down to 80 percent by 2030, shifting hundreds of billions in costs to states that either cannot absorb them or will not.
For states that choose not to cover the gap, people lose coverage.
The People
The CBO estimated that 11.8 million people will be removed from Medicaid as a direct result of the law. That is not a projection based on worst-case assumptions. It is the nonpartisan federal agency’s central estimate of what the law, as written, will do.
Two provisions are driving most of that number.
The first is work requirements. Starting in January 2027, adults between 19 and 64 who are not disabled, not pregnant, and not caring for a child under 14 must document at least 80 hours per month of paid work, job training, or community service to remain enrolled in Medicaid. States can begin enforcing the requirement as early as December 2026. Research on earlier state-level work requirement experiments found that most people who lost coverage were already working but could not navigate the paperwork. Coverage dropped. Health outcomes dropped. Employment did not change.
The second is redeterminations. Currently, states verify Medicaid eligibility once per year. Starting December 31, 2026, that becomes every six months. Doubling the frequency of bureaucratic checkpoints doubles the number of opportunities to fall through an administrative gap. A missed letter, a wrong address, a form filed one day late. The Urban Institute found that 3 in 10 young adults covered by Medicaid are now at risk of losing coverage solely because of the more frequent renewal requirements.
The Timeline
The cuts did not all land at once. They are landing across 2026 and into 2027, staggered so the full impact is harder to see as a single event.
January 2026 brought the end of expanded federal matching for ACA expansion states. October 2026 tightens Medicaid eligibility for immigrants, removing coverage from people who have been lawfully present in the United States for years. December 2026 triggers the six-month redetermination requirement. January 2027 activates work requirements.
States are already making decisions about how to respond to the funding reductions. Some are cutting provider reimbursement rates. Some are reducing the services they cover. Some are looking at enrollment caps. None of those options are painless. All of them affect people.
What Congress Did and Did Not Do
The bill that passed did not say that 11.8 million people would lose health insurance. It said federal Medicaid spending would be reduced and that new eligibility conditions would apply. The human consequences of those policy choices are documented in the CBO score, the Urban Institute analysis, the Robert Wood Johnson Foundation research, and the state budget projections published by Stateline.
Republicans argued the bill would reduce government waste and return responsibility to states and individuals. The states are now figuring out what responsibility without funding looks like. The individuals are now navigating systems built to verify, re-verify, and document their way to coverage.
The CBO does not editorialize. It counted. Eleven point eight million people. The deadlines are arriving.