Medicaid Under the Microscope
H.R. 1 proposes the most significant restructuring of Medicaid in decades, shifting it from an entitlement based on financial need to a conditional benefit. The bill focuses on tightening eligibility, increasing beneficiary costs, and restricting state financing options.
New Eligibility Hurdles
The bill introduces a nationwide "community engagement" requirement for many adults, mandating 80 hours of work or similar activities per month to maintain coverage.
Beneficiary Action
Must work, volunteer, or attend school for 80+ hours/month.
State Verification
States must build costly systems to track and verify compliance.
Consequence of Non-Compliance
Failure to document hours results in loss of health coverage.
Tighter Administrative Rules
H.R. 1 shortens key timeframes, increasing the risk of coverage gaps and uncompensated care for hospitals.
Constraining State Finances
The bill restricts states' ability to fund their share of Medicaid costs by placing a moratorium on new provider taxes.
Reshaping Medicare
The House bill introduces targeted changes to Medicare affecting beneficiary eligibility, provider payments, and prescription drug plan oversight, aiming to curb spending and increase accountability.
Physician Payment Squeeze
The bill proposes updates to physician payments that fall far below the projected rate of medical inflation, potentially straining practices.
PBM Accountability Overhaul
For Medicare Part D, H.R. 1 mandates a transparent, fee-based model for Pharmacy Benefit Managers (PBMs).
- ✓ All drug rebates must be passed through to the plan.
- ✓ PBM income is limited to flat, transparent service fees.
- ✓ Mandatory annual reporting of all costs, fees, and rebates.
- ✓ Prohibits "spread pricing" models.
AI in Program Integrity
$25M
appropriated to use Artificial Intelligence to detect and recoup improper payments.
Commercial Market & The Rise of HSAs
H.R. 1 aims to reshape the commercial insurance landscape by tightening ACA marketplace rules while simultaneously promoting Health Savings Accounts (HSAs) as a primary vehicle for coverage.
Expanding HSA Eligibility
The bill makes HSAs accessible to millions more Americans, including Medicare beneficiaries and those in high-deductible plans.
Boosting HSA Contributions
Contribution limits for Health Savings Accounts would be substantially increased to encourage savings.
Stakeholder Impact Summary
The House bill, if enacted, would create distinct winners and losers across the healthcare landscape, fundamentally altering financial incentives and access to care.
👥
Patients
- -New barriers to Medicaid coverage.
- -Higher cost-sharing for some.
- +Greater HSA flexibility and tax benefits.
🏥
Providers
- -Risk of rising uncompensated care.
- -Lower Medicare physician payment rates.
- +Temporary delay in DSH payment cuts.
🏢
Insurers
- +Opportunity in consumer-directed health plans.
- -Stricter rules for ACA marketplace plans.
- -PBMs face total business model disruption.
🏛️
States
- -High administrative costs for new mandates.
- -Restrictions on financing mechanisms.
- +Potential for lower state Medicaid spending.