---
type: source
title: "One Big Beautiful Bill Act: CBO Estimates 11.8M Americans Losing Medicaid Coverage by 2034, $911B Federal Spending Cut"
author: "KFF / CBO / CBPP / American Medical Association"
url: https://www.kff.org/medicaid/medicaid-what-to-watch-in-2026/
date: 2025-01-01
domain: health
secondary_domains: []
format: policy-analysis
status: processed
processed_by: vida
processed_date: 2026-05-10
priority: high
tags: [Medicaid, coverage-loss, One-Big-Beautiful-Bill, work-requirements, CBO, health-access, VBC, uninsured, policy, DOGE]
intake_tier: research-task
extraction_model: "anthropic/claude-sonnet-4.5"
---

## Content

**One Big Beautiful Bill Act (Budget Reconciliation Legislation, enacted 2025)**

**Coverage impact (Congressional Budget Office estimates):**
- Total Medicaid coverage loss by 2034: **11.8 million people** losing Medicaid directly
- Additional 3.1 million losing coverage through marketplace plan changes
- **Total: ~15 million Americans losing health insurance coverage**
- Federal Medicaid spending reduction: **$911 billion over 10 years**
- New uninsured: CBO estimates 10-11.8M increase in uninsured Americans

**Key provisions:**

**1. Medicaid work requirements:**
- Adults 19-64 without children, disabilities, or exemptions must document 80+ hours/month of work, school, or community service
- CBO estimate from work requirements alone: **5.2 million Medicaid coverage reduction by 2034**; 4.8 million new uninsured
- CBPP estimates: 9.9-14.9 million at risk of losing Medicaid from work requirements in 2034
- Research context: prior state work requirement experiments led enrollees to take on more medical debt, delay care, delay medications

**2. Enhanced FMAP sunset (January 1, 2026):**
- Federal Medical Assistance Percentage (FMAP) enhancement that incentivized states to expand Medicaid under ACA sunsets
- States that expanded Medicaid may face revenue gaps

**3. Accelerated eligibility redeterminations (starting 2026):**
- States required to conduct Medicaid eligibility redeterminations at least once every **6 months** (was annual)
- Administrative burden expected to push off-rolls even eligible enrollees ("red tape churning")

**4. Narrow eligibility for non-US citizens (effective October 1, 2026):**
- Medicaid eligibility narrowed for certain non-citizen populations

**5. Disproportionate Share Hospital (DSH) payment cuts:**
- Safety-net hospitals (serving high Medicaid/uninsured share) face DSH payment reductions
- Urban safety-net hospitals identified as hardest hit

**Healthcare system impact (Fierce Healthcare, 2026 outlook):**
- State decisions to restrict provider reimbursement rates in response to federal cuts will limit access even for remaining enrollees
- Safety-net hospitals face financial pressure that may force consolidation or closure
- "Domino effect" through the healthcare delivery system

**AMA summary (4 changes reshaping care in 2026):**
- Work requirements, DSH cuts, FMAP changes, redetermination acceleration all effective 2026

## Agent Notes

**Why this matters:** This is the largest single reversal of health coverage expansion in decades. 11.8M losing Medicaid coverage by 2034 means:
1. The uninsured rate climbs sharply, reversing post-ACA progress
2. The VBC transition thesis is complicated: fewer insured people = fewer potential members in value-based contracts = shrinking addressable market for purpose-built payvidor models
3. Safety-net hospitals face financial pressure that accelerates consolidation — concentrating power in systems that are LESS aligned with VBC
4. Social determinant of health interventions lose their patient population (if patients lose coverage, SDOH-integrated care models have no payer)

**What surprised me:** The magnitude (11.8M) and the mechanism diversity. Work requirements alone account for 5.2M — but the combination of enhanced FMAP sunset, 6-month redeterminations, and DSH cuts creates multiple simultaneous shocks to the coverage infrastructure.

**What I expected but didn't find:** State-level analysis of which states will be hardest hit and what their response strategies are. The coverage loss will be concentrated in states with large Medicaid expansion populations (California, New York, Illinois, Texas, Florida) but I don't have state-specific projections here.

**KB connections:**
- [[value-based care transitions stall at the payment boundary because 60 percent of payments touch value metrics but only 14 percent bear full risk]] — coverage loss further stalls VBC: fewer insured = fewer risk contracts
- [[Devoted is the fastest-growing MA plan at 121 percent growth because purpose-built technology outperforms acquisition-based vertical integration during CMS tightening]] — Medicaid is NOT Medicare Advantage; Devoted focuses on MA (65+). But coverage loss in the 19-64 Medicaid population affects the pipeline into Medicare
- [[SDOH interventions show strong ROI but adoption stalls because Z-code documentation remains below 3 percent and no operational infrastructure connects screening to action]] — if Medicaid populations lose coverage, SDOH screening and intervention becomes moot for them
- [[the epidemiological transition marks the shift from material scarcity to social disadvantage as the primary driver of health outcomes in developed nations]] — coverage loss reverses the transition's logic: material access (coverage) is re-becoming a primary driver

**Extraction hints:**
- New claim: "The One Big Beautiful Bill Act's Medicaid provisions will create the largest single US health coverage reversal since pre-ACA — eliminating coverage for 11.8 million Americans by 2034 through work requirements, enhanced redeterminations, and DSH cuts, inverting the structural prerequisite for value-based care transition"
- Cross-domain flag for Leo: this is a civilizational infrastructure claim — systematically withdrawing health coverage from 15M people is the opposite of the healthspan-as-infrastructure argument
- Cross-domain flag for Rio: this affects the investment thesis for health companies targeting Medicaid populations; also affects Living Capital health investment calculus

**Context:** Multiple authoritative sources: CBO (official Congressional cost estimator), KFF (nonpartisan health policy analysis), CBPP (Center on Budget and Policy Priorities), AMA (physician organization). The CBO estimates are the official baseline; CBPP estimates are higher and reflect different assumptions about administrative churning effects.

## Curator Notes (structured handoff for extractor)
PRIMARY CONNECTION: [[value-based care transitions stall at the payment boundary because 60 percent of payments touch value metrics but only 14 percent bear full risk]] — coverage loss further complicates VBC transition
WHY ARCHIVED: Represents the largest structural reversal in US health access since ACA. This changes the landscape for the KB's attractor state analysis — the path to prevention-first care is harder if 15M people lose coverage.
EXTRACTION HINT: The key claim is structural: work requirements don't work (people who lose coverage aren't employed — they face barriers like disability, caregiving, lack of documentation), so the coverage loss is primarily administrative churning, not behavioral response. Cite the prior state experiment evidence (medical debt increase, care delays). Flag as cross-domain for Leo (civilizational health infrastructure reversal) and Rio (investment implications).
