One Big Bill Act has Big Impact on Healthcare

There’s been a lot to take in and digest when it comes to H.R.1, that passed and was signed by President Trump in July. AAFP tirelessly worked on your behalf while this was going through the House and Senate and now that H.R.1 was adopted, they have unpacked what it all means through intense analysis. Read their comprehensive findings here.

Meanwhile, our own state officials have put together a comprehensive summary of the impact this has on Marylanders. The Maryland Department of Health held a Zoom meeting with provider stakeholder entities recently to discuss ramifications from federal H.R.1 for the Medicaid program. Deputy Secretary Ryan Moran made it very clear that the Department continues to review the bill’s provisions and that many questions remain. Federal guidance will be needed for implementation. Here is information from the briefings.

As of June 30^th, Maryland Medicaid covers 1,508,710 individuals, which is 25% of Maryland’s population, of which 330,000 adults qualify for Medicaid as part of the ACA expanded adult population. Maryland Medicaid covers almost half of all children in the state and 40% of all births. According to the Department, the key takeaways in H.R.1 are that 175,000 Marylanders may lose coverage and that up to $2.7 billion in federal funding may be lost annually when all the bill’s provisions are fully implemented over the next several years. In addition, there will be a cost to the State for implementing the systems necessary to meet the bill’s requirement.

Significant changes altering eligibility for Maryland Medicaid include work requirements for ACA expansion adults, more frequent eligibility renewals for those adults, and changes to the types of immigrants who will qualify for coverage. These eligibility changes will impact 175,000 Marylanders who may lose their coverage, equating to $1.43 billion annually in federal funding. Some specific issues that were discussed:

• Provider taxes (effective July 4, 2025): Maryland assesses provider taxes on hospitals, MCOs, and nursing homes. H.R.1 prohibits states from implementing additional provider taxes and makes changes to the allowable threshold levels and how taxes can be distributed across industries. Maryland is awaiting further guidance to determine if its provider taxes meet the bill's requirements, especially provisions regarding distributing taxes. There is approximately $1.17 billion annually at risk if Maryland’s taxes were not to satisfy the bill’s provisions.
• Payments to Entities Providing Family Planning/Abortion Services (effective July 4, 2025): Payments to these entities (i.e., non-profit, community providers who deliver more than $800K in family planning and abortion services) are prohibited. Note: Maryland law requires the Department to pay family planning providers whose federal funding is discontinued. Loss of federal funding is more than $2.7 million.
• Alien Eligibility (Effective October 1, 2026): Only lawful permanent residents, certain Cuban and Haitian immigrants, and individuals living in the US through Compacts of Free Association will be eligible for Medicaid coverage. 60,000 participants may lose benefits. States continue to have options for pregnant women or children, and emergency Medicaid is not impacted.
• Work Requirements (Effective December 31, 2026): States will need to implement work requirements as a condition of coverage for the ACA expanded adult population (ages 19-64). Coverage is contingent on working, participating in training or active in community engagement for 80 hours per month. Exemptions and hardship waivers will be allowed, and states can request an extension until December 31, 2028, if states can demonstrate a good faith efforts in moving forward. Greater guidance is needed from the federal government on how states can meet this requirement.
• Retroactive Coverage (effective December 31, 2026): H.R.1 reduces retroactive coverage from three months to one month prior to application for ACA expansion adults and two months prior to application for all other participants. This provision increases the risk of uncompensated care and could result in a loss of federal funding of $3.1 million annually.
• Redetermination Frequency (Effective January 1, 2027): Renewals will need to be conducted every six months for the ACA expanded adult population rather than annually. This will have a substantial cost on the state for implementation and will affect the 330,000 individuals under the expanded population.
• State Directed Payments (Effective for Maryland January 1, 2027): Eliminates the use of State Directed Payments to establish rates above Medicare rates. Maryland risks losing $52 million annually ($27 million for Primary Care Investment and $25 million for Maryland Quality Improvement Program).
• Cost Sharing (Effective October 1, 2028): States are required to impose cost-sharing requirements on the ACA expanded adult population, with certain services excluded, like preventative and mental health care services. Maryland requires copays for prescriptions. Additional guidance will be needed from the federal government, and it will require substantial State investment to implement.
• Erroneous Excess Payments (Effective October 1, 2029): Expands the authority of the federal government to take back funding, even when the state is operating in good faith.

Resources:

• A Fact Sheet with the Impact Overview can be found online.
• Consumer-facing FAQ is also available.
• This and other information is available on the MDH Medicaid homepage here. 

We will continue to keep you informed as all these things play out at both the Federal and State level.

Meanwhile, help continue the fight and participate in AAFP’s Speak Out campaigns on the issues we’re collectively fighting for. Your voice is important and you play an important role in influencing issues that matter most to Primary Care and your patients. All active Speak Out campaigns can be found here.

Kind regards,

Becky Wimmer

Your Executive Director