The Medicaid work/community engagement requirement included in the “One Big Beautiful Bill” Act could cost hospitals millions of dollars – losses that could translate into potential declines of 11.7-13.3 percent in hospital operating margins, according to a Commonwealth Fund analysis based on Urban Institute data.
Not all current Medicaid participants are subject to the new work and community engagement requirements but between 5.5 million and 6.3 million people are expected to lose their Medicaid benefits as a result of those requirements. Among them, some will be newly unemployed; some will be unable to find work; and some will be employed but unable to navigate the complex requirements of documenting that they meet the work or community engagement requirements.
With this loss of Medicaid coverage and even after reduced utilization among people who no longer have insurance, hospitals could experience a two-fold hit: a Medicaid revenue decline of $12.2 billion to $13.8 billion (−8.7 percent to −9.9 percent) and an increase in uncompensated care of $7 billion to $8 billion.
Learn more about the potential implications of the new Medicaid work requirements for hospitals from the Commonwealth Fund issue brief “The Impact of Proposed Federal Medicaid Work Requirements on Hospital Revenues and Financial Margins.”