President Trump’s July spending law (known as the One Big Beautiful Act) makes significant changes to Medicaid policy. The law’s overall enrollment restrictions and funding cuts will total nearly $1 trillion over the next ten years. Among the changes include limits to state directed payments, more frequent verifications and stringent work requirements. After accounting for the Congressional Budget Office’s (CBO) estimated interactions, the Kaiser Family Foundation estimates that the Act would reduce federal Medicaid spending by $911 billion over ten years. Congressional estimates warn that more than 12 million people could lose their insurance, limiting their access to care. 

Which AHPA states will be most impacted by the upcoming Medicaid cuts?  

Most of the policies impacting Medicaid begin in 2027, with the largest spending reductions happening after 2028. According to an analysis by the Kaiser Family Foundation, the following AHPA states are expected to see the largest federal spending reduction over ten years: Illinois (19%), Oregon (19%), Washington (18%), California (17%), Kentucky (15%), Hawaii (15%), Colorado (14%), Ohio (13%), Maryland (12%) and North Carolina (11%). AHPA’s Medicaid non-expansion states are projected to see lesser financial impacts: Kansas (9%), Texas (8%), Wisconsin (8%), Georgia (6%), Florida (5%).  

Here’s a data visualization created by the Kaiser Family Foundation projecting state budget impacts.

For Medicaid expansion states, one key policy that could lead to greater uninsured individuals, is the new work requirements that apply to many adults, with exemptions for disabilities and some caregivers. Although the policy appears to be designed to target Medicaid expansion states, the law’s language does not say this explicitly, leaving some room for questions.  

AHPA makes up 11 of the 41 states that have expanded Medicaid, with a presence in California, Colorado, Hawaii, Illinois, Kentucky, Maryland, North Carolina, Ohio, Oregon, Washington and Wisconsin. Georgia’s Pathway to Coverage waiver, although a partial expansion, will also be subject to these requirements. The Congressional Budget Office (CBO) estimates that low-wage, hourly tourism and gig economy workers could be uniquely at risk, as these populations work jobs that may not meet the hourly requirements but also often do not offer Employer-Sponsored Insurance. Independent research tanks estimate about 39% of expansion enrollees are at risk of losing coverage nationwide. 

Work requirements have been tried under state demonstration waivers before, with greater flexibility and minimal employment increase. Many states testing work requirements previously made sure older Americans were exempt, allowing them to keep critical coverage as they age. Arkansas has experimented with work requirements under the first Trump Administration, but the state included wider exceptions for parents and adults over 55. After studying the Arkansas example, multiple researchers including the CBO concluded they did not actually improve employment or civic engagement rates. 

By January 1, 2027, states will be required to have adopted these new eligibility requirements, including work requirements and more frequent verifications. States’ Medicaid programs have the option to adopt these restrictions sooner, but they must wait until after the June 2026 federal rule. Some state programs are already warning the Administration that the implementation timeline is quite short, leaving only six months at best. President Trump will allow Secretary Kennedy to offer a grace period for states struggling to comply until no later than December 31, 2028–but only for states found to be making a “good faith” effort.