The Rightsizing Racket: How Bureaucracy Replaces Benefits
by u/MsAgentM
Synopsis
On July 4th, President Trump signed the One Big Beautiful Bill Act (OBBBA), meeting a deadline he had set earlier in the year. This was a significant reconciliation bill that was almost 900 pages long. Instead of focusing on all aspects of the bill, this article will focus specifically on the impact on healthcare and how the media reported on it.
To reduce the country’s budget, Republicans looked to make changes to our entitlement spending, which consumes approximately 60% of the country’s spending. In the past, Trump previously said he would preserve Medicaid benefits. While the OBBBA does not directly reduce individual benefits, it lowers federal contributions to the program in several areas. Let's briefly review the specific changes being made. A very efficient list can be found here.
Rules
- Stops Biden-era rules that set nursing home staffing levels, implement more streamlined processes for enrollment and renewal into CHIP and Medicaid, improve provider transparency, and strengthen oversight of Medicaid and CHIP. Pushing rules back until 2034 to help postpone the cost.
Taxes and State-Directed Payments
- Freezes, then scales down the provider tax to 3.5%. This is a loophole where states used tax revenue from hospitals to make their contributions appear larger and get a bigger federal match.
- Sets payment for state directed payments to 110% of Medicare rates for non-expansion states and 100% for expansion states. State directed payments are extra payments made to providers to get them to accept Medicaid patients since the rates are lower.
Medicaid Expansion Population
- Requires Medicaid recipients to confirm eligibility every 6 months instead of every year.
- Requires all able-bodied adults between the ages of 19-64 to work or perform an equivalent activity for 80 hours a month.
- States must impose cost-sharing for adults that receive healthcare through Medicaid expansion. This rate must be between 0 and $35 and cannot exceed 5% of the family’s income. Exempted services include primary care, prenatal care, pediatric care, emergency room care, mental health, and substance use disorder services.
- Stops the Federal Medical Assistance Percentage (FMAP) incentive for Medicaid expansion after January 1st, 2026. This was a 5% bonus the Biden administration provided to states to encourage Medicaid expansion.
Medicaid Eligibility and Enrollment
- Reduces retroactive Medicaid coverage from 3 months to 2 months for traditional Medicaid recipients and 1 month for Medicaid expansion population.
- Requires quarterly deceased checks and mandatory disenrollment for deceased beneficiaries.
- Implements a system to prevent individuals from being enrolled in Medicaid in multiple states.
- Implements rules that will require states to pay the federal government back payments made in error if the Payment Error Rate Measurement is above 3%.
- Creates a non-waivable ceiling of $1 million home equity values for allowable assets for long term care eligibility.
Medicaid Waivers
- Makes law the practice that all new or renewed 1115 Demonstration applications must be budget neutral. These waivers allow states to test new approaches to Medicaid by covering populations or services not typically allowed under federal rules.
- Allows states to use Medicaid funds for home and community-based services (HCBS) under a new 1915(c) waiver, using state-defined criteria to determine if an individual would otherwise require institutional care.
Marketplace Eligibility and Enrollment Requirements and Procedures
- To qualify for subsidized ACA coverage, applicants will have to provide key eligibility documents up front, unless there is a change in family size.
- Prohibits those that lose Medicaid coverage due to failing to meet work requirements from getting subsidized ACA coverage.
- Prohibits income-based special enrollment periods.
- Prohibits access to subsidized ACA coverage if recipients do not file taxes and report the amount of subsidy used the year prior.
Immigrant Coverage
- Reduces federal match rate from 90% to the standard rate for emergency services provided to undocumented migrants that would otherwise qualify for Medicaid expansion.
- Reiterates that Medicaid, Medicare, and Marketplace eligibility is limited to U.S. citizens, lawful permanent residents, and certain Cuban and Haitian immigrants.
- Prohibits lawful immigrants from getting ACA tax credits for their first 5 years in the US.
Other
- Provides $50 billion to states to support rural providers.
- Prohibits federal funding for certain family planning and abortion service providers.
- High-deductible health plans (HDHPs) can now cover telehealth and remote care with no deductible and still qualify as HDHP’s for Health Savings Accounts (HSA) Purposes.
A crowd of people holding signs at the "Welcome Back Congress" rally hosted by the group Families Over Billionaires on March 26, 2025 outside the U.S. Capitol in Washington, DC. One sign says "No Breaks for Billionaires" and another says "Medicaid Es For All!". Wikimedia Commons
The Media Reporting
These are the barebone provisions in OBBBA regarding healthcare, but what did the media report?
Left-Wing Media | Right-Wing Media |
|---|---|
Framing Bias | |
Most left wing articles focus on the reduction in funding, but don't state that the reduction is limited to able bodied adults who receive Medicaid through the Medicaid expansion, and that this population was receiving 90% Federal reimbursement while the standard is closer to 60-70%. This is likely to impact rural hospitals more because these are lower income areas, with fewer employers that offer insurance, hence a higher eligible population. | Right leaning outlets primarily focus on tax cuts and when covering health provisions, emphasize work requirements and fraud prevention. They claim that the Obama and Biden admins made changes that allowed able-bodied people or immigrants access, and saying their changes were to reduce fraud and abuse of the program. |
Selection Bias | |
Left wing media highlights cuts to states, but leaves out those cuts are only for Medicaid expansion programs that do not start phasing in until 2027. They also focus on the administrative burdens that will result and cause people to lose coverage while not gaining any benefit from improving services. | Some right wing sources claimed or implied blue states were changing their policies to allow undocumented immigrants access to Medicaid, often ignoring that these are programs covered by state funds and not paid for by federal funds. |
Omission Bias | |
Left wing sources don’t mention the limited scope of the cuts, the delayed scheduled for implementation, or the ways states would game the system to boost federal contributions they received. | Right wing largely focus on other parts of the OBBBA but when discussing the healthcare components, they don’t address the past experience that shows the administrative changes will cause many to lose coverage and cost states. |
Proponents of the bill state the goal was to “right-size” Medicaid by ensuring the right groups are accessing it. Proponents argue that work requirements foster greater independence and, in some cases, provide structure or purpose for younger beneficiaries. They also view an able-bodied person not working and collecting Medicaid as a type of fraud itself. Lastly, this bill included or emphasizes accountability, by re-iterating the laws that exclude undocumented migrants from accessing these services, imposing more checks for deceased beneficiaries, and renewals, and shifting more of the financial responsibility to the states.
Critics of the bill state that most able-bodied people that receive Medicaid already work and imposing work requirements only add more administrative burdens that result in less access and only increase cost and paperwork. The same concerns are expressed for the requirements to renew every six months instead of every year since there are already issues with interrupted Medicaid service with annual renewal. Critics also note that the added administrative processes could increase costs for states tasked with implementation. These policies are compounded by delaing laws to streamline enrollment and renewal processes enacted during Biden’s term.
My very biased take:
The Republicans are trying to claim the moral high ground, but they are the ones throwing up needless administrative hurdles to access entitlements that people have a legal right to. While some of these laws do address loopholes that need closing, most seem aimed at solving problems that don’t actually exist, meant to soothe fake ideological afflictions. More checks to see if Medicaid recipients have died certainly sounds good on its face, but dead people don’t go to the doctor, so what fraud are they stopping here really? And what sort of administrative processes do states have to undergo to meet this mandate? And how many false positives will come from it?
Most people that get Medicaid already work. So the next question is, why does it matter if they have to confirm they do? Any sort of user input is a potential point of error and is associated with some cost, so it is really important to ensure each input is necessary. When Arkansas tried to implement the same rule, over 13,000 enrollees lost coverage for not meeting work requirements, but when a review showed somewhere between 70-90% were exempt from the requirement and filled the paperwork out wrong. What does a system look like for people to have to show they completed 80 hours of work a month and how will it avoid the same pitfalls? Especially since Republicans delayed improvements ordered by law during the Biden administration so they could pay for their tax cuts.
To be clear, I’m not loving the angle Left wing media is taking here but they have a way harder job. They have to explain to people that in two years they are gonna have to start renewing their Medicaid every 6 months instead of every year, start having co-pays at appointments, and work requirements. Oh, and these people don’t even know they are on Medicaid because their state has some cutesy state name for it.
The left has to start shamelessly advertising. When Trump sent out Covid check, he sent them with his name on it. Newborns are gonna get $1,000 Trump accounts. It sounds trite, but if Trump gives you something, you will know about it. He will make sure of it. For too long, there has been the high brow, light touch approach to helping people and now folks honestly have no idea how much the government helps them in their day to day lives.
They also have no idea how hard the government can make their lives.
Recently a friend was trying to get her grown daughter assistance through government mental health services. This person has been in the system, at this clinic, many times before and is a citizen, but because of the immigration crackdown, the mental health department couldn’t accept her daughter without a copy of a social security card, which she didn’t have. It takes 1 to 2 weeks to get another one, but due to her unstable nature, her daughter wasn’t around long enough to even get another copy ordered. Hopefully she will be ok.
But this is what it will be, death by a thousand cuts. Grease the path for the rich and put up a million barriers to service for the poor. Except will these people ever make the connection that this bill and other things the Republicans enact are what hacks away at their functional government? These people have been trained and honed for years to be mad and believe their government doesn’t work already. They voted for a guy that has shown no ability to competently change the system, and every inclination to break it when is suits him.
In the end, this isn’t just about Medicaid, it’s about who the system is designed to serve, and who it quietly punishes. The Republican push for "rightsizing" sounds benign until you see it up close: a bureaucracy designed to trip up the vulnerable, while cushioning the powerful. People won’t feel the sting of this bill all at once, but they’ll feel it at the pharmacy counter, in the ER, during a crisis when they’re told to bring a document they don’t have. Meanwhile, the left fumbles the messaging war, offering invisible help while the right promises visible harm wrapped in a smile and a slogan. The tragedy isn’t just that services will erode—it’s that people won’t know where the erosion came from until it’s too late.