The federal domestic policy bill that passed this week, and which is expected to be signed into law Friday, makes a lot of big changes to health care coverage, especially Medicaid (known as HUSKY in Connecticut).
As with any law, many of the changes will take effect over time, and a lot of things still need to be determined. Some changes will require state leaders to make decisions. The federal government will need to set rules on how to implement some of the changes. It’s also possible that lawsuits could delay some of the implementation.
Based on what we know so far, here are the major Medicaid-related provisions, listed in order of when they take effect. Much of this information comes from KFF, a great source of information on all things health policy.
Taking effect in 2025
Limits on provider taxes
What changes:
- Right now, states can tax hospitals, nursing homes, and other types of health care providers, then return some or all of the money to the providers. Doing so generates matching funds from the federal government.
- The new law prohibits states from increasing provider taxes, and will begin scaling back the level of taxes allowed starting in 2028.
- This will reduce Connecticut’s ability to raise money from the federal government to help pay for Medicaid.
Who’s affected:
- The state budget. This limits one major way the state generates federal funding to help pay for Medicaid.
- This could lead to challenges paying the state’s share of Medicaid costs or expanding payment rates to providers or benefits to members.
Takes effect:
- The restriction on new provider taxes takes effect immediately.
- The cuts to provider tax rates begin in 2028 and will be phased in over time.
Taking effect in 2026
No federal Medicaid funding for Planned Parenthood
What changes:
- Planned Parenthood is a major provider of reproductive health services as well as primary care.
- The new law essentially prohibits Planned Parenthood from receiving any federal funding from Medicaid.
What else to know:
- Medicaid is funded by both the state and federal government, so it’s possible that states could make up some or all of the lost funding.
Who’s affected:
- Patients who get care from Planned Parenthood.
- Demand for other providers would likely increase, making it more difficult for patients to access reproductive health care.
Takes effect: July 2026
Work requirements for adults with Medicaid
What changes:
- Under the new law, states must require adults under age 65 to spend at least 80 hours per month working or participating in other community activities – and they must report those hours to maintain coverage.
- Some people will be exempt from the work requirements, including people with disabilities and parents of children 13 and under. But it’s not clear what kind of paperwork will be required to prove a person is exempt.
Who’s affected:
- This applies to adults covered by HUSKY D (adults under 65 without minor children) and other adults whose children are older than 13.
- The state will have to spend money developing and running systems for people to report their work hours.
What else to know:
- There is a big risk that many people will lose coverage. In states that have imposed Medicaid work requirements, many people have lost coverage even though they were eligible because of challenges reporting their hours or system glitches.
- There’s a lot we don’t know yet about how this will roll out. The federal government will need to provide guidance to states, and our state will need to determine how to implement this requirement.
- Read our fact sheet on Medicaid work requirements.
Takes effect: By Dec. 31, 2026
More frequent eligibility redeterminations
What changes:
- Right now, people with Medicaid coverage must have their eligibility checked (called “redetermined”) every 12 months.
- The new law requires states to redetermine eligibility every 6 months for people covered by HUSKY D (adults under 65 without minor children).
- Every time someone’s eligibility has to be redetermined, there’s a risk they will lose coverage because of administrative issues, even if they still qualify for coverage.
Who’s affected:
- People covered by HUSKY D (adults under 65 without minor children)
- The state will have to complete redeterminations twice as often for more than 300,000 people
Takes effect: Dec. 31, 2026
Taking effect in 2027
Limits on retroactive coverage
What changes:
- Right now, Medicaid coverage is retroactive for 90 days. If you’re eligible for Medicaid but didn’t have coverage, Medicaid will cover your medical bills retroactively.
- The new law shortens the retroactive period to 30 days for people eligible for HUSKY D (adults under 65 without minor children) and to 60 days for everyone else.
Who’s affected:
- Anyone who is eligible for Medicaid and incurs medical bills (gets in an accident, gets diagnosed with a major illness) while not covered.
What else to know:
- Other parts of this law make it more likely that people will lose Medicaid coverage without realizing it, making retroactive coverage even more important.
- Medical debt will likely increase.
Takes effect: Jan. 1, 2027
Taking effect in 2028
cost sharing for some medicaid clients
What changes:
- Right now, people covered by HUSKY do not have to pay when they get health care. That’s because they have low incomes and research shows that cost sharing (such as co-pays) makes low-income people much less likely to get needed care.
- Under the new law, states will be required to impose cost sharing of up to $35 per service on some people covered by Medicaid. (The amount can be set by the state and can be lower than $35.) Out-of-pocket costs will be capped at 5% of a family’s income.
- Cost sharing would not be required for some services, including primary care, mental health, substance use disorder services, and services from federally qualified health centers and rural health clinics.
Who’s affected:
- This applies to people covered by HUSKY D (adults without minor children) whose incomes are above the federal poverty level.
- This will likely be a challenge for health care providers, who will need to choose between taking less payment, trying to collect payments from patients who might not be able to pay, or turning away patients.
Takes effect: Oct. 1, 2028