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Timeline of Key OBBBA Impacts for Rural Healthcare

2025
August 31
In Effect Prior to September 2025: End to enforcement of CMS rule on:
  • Medicare Savings Program (MSP) eligibility and enrollment, making it easier for Medicare recipients to enroll in MSPs
  • Medicaid, CHIP, and the Basic Health Program prohibition, making enrollment easier for Medicare recipients
Potential Impact — Possible decrease in Medicare recipients in MSPs, Medicaid, Chip and the Basic Health Program.
August 31
In Effect Prior to September 2025: State directed payments (SDPs) capped at 100% of Medicaid rates in expansion states and 110% in non-expansion states; SDPs for states that exceed caps starting rolling back in January 2028

Potential Impact — Reduced money for Medicaid expansion states to fund their share of Medicaid payments.

August 31
In Effect Prior to September 2025: End to enforcement of CMS rule on:
  • Medicare Savings Program (MSP) eligibility and enrollment
  • Medicaid, CHIP, and the Basic Health Program prohibition, making enrollment easier for Medicare recipients
  • Staffing standards for long-term care facilities until September 2034

Potential Impact — Prevent Medicare recipients from enrolling in MSPs, Medicaid, Chip and the Basic Health Program, reducing coverage for individuals and visits and uncompensated care for providers; less staffing pressure on long-term care facilities.

September 1
CMS to release RHT Program applications by mid-September and hold webinars in late September

Tip: Be in contact with state leadership and your rural health association to ensure your needs are heard.

October 1
CMS to respond to application questions from states
November 1
Early November: RHT Program plans and applications due to CMS
December 31
Enhanced Affordable Care Act (ACA) premium tax credits scheduled to expire

Potential Impact — Reduction in ACA enrollees.

December 31
Medicaid eligibility redetermination period reduces from 12 to 6 months for expansion enrollees not on an MEC waiver

Potential Impact — Reduction in Medicaid enrollees.

December 31
Individual Coverage Health Reimbursement Arrangement (ICHRA) can be used to pay for coverage on an Exchange; employers offering ICHRAs get an 18-month tax credit

Potential Impact — May increase access to ACA plans.

December 31
CMS to have approved/denied state RHT Program applications
2026
January 1
Temporary 2.5% payment increase under the Medicare physician fee schedule (PFS) through January 1, 2027 begins

Potential Impact — Some short-term relief from ongoing reimbursement challenges.

January 1
Incentive for non-expansion states to take Medicaid expansion financing ends

Potential Impact — States not becoming expansion states and continued strain on healthcare to foot the cost of uncompensated care.

January 1
Open enrollment period or ACA plans is reduced by a month

Potential Impact — Fewer people may enroll leading to reduced visits or an increase in uncompensated care as people lose access to coverage.

January 1
ACA bronze and catastrophic health plans become high-deductible health plans eligible for health savings accounts

Potential Impact — It’s unclear if people will take advantage of this change or have the funds to do so considering the end of ACA premium tax credits.

January 1
2026 RHT Program funds distributed to states
January 1
ACA premium tax credit eligibility ends for:
  • Anyone disenrolled or denied Medicaid
  • Low-income, lawfully present immigrants with incomes less than 100% of the federal poverty level
  • Low-income special enrollment period enrollees

Potential Impact — Reduced visits or an increase in uncompensated care as people lose access to ACA plans.

January 1
RHT Program begins monitoring of and supporting states with RHT Program plans through 2030
January 22
Around January 22: Possible sequestration of Medicare funds due to OBBBA’s effect on federal deficit

Potential Impact — May lead to automatic cuts to Medicare of roughly $500 billion from 2026 to 2034 and $45 billion in 2026 alone and lead to reduced reimbursements to providers.

October 1
Unlawful immigrants are ineligible for Medicaid and CHIP

Potential Impact — Reduced visits or an increase in uncompensated care as people lose access to coverage.

October 1
Enhanced federal funding for emergency Medicaid for undocumented immigrants ends

Potential Impact — Reduced compensation for care services for affected populations.

December 31
Adults 19 to 64 must work, do community service, or receive education for 80 hours a month to be eligible for Medicaid. States with approved Section 1115 waivers may start earlier. One-time compliance exemptions may also let some states delay until December 31, 2028

Potential Impact — Reduced visits or an increase in uncompensated care as people lose access to coverage.

2027
January 1
2026 funds must have been used; 2027 funds distributed
January 1
Individuals denied Medicaid due to work reporting requirements will not qualify for ACA premium tax credits

Potential Impact —Reduced visits or an increase in uncompensated care as people lose access to coverage.

January 1
Temporary 2.5% payment increase under the Medicare PFS ends

Potential Impact — An end to short-term relief from ongoing reimbursement challenges.

January 1
Retroactive coverage for new applications for Medicaid reduced from 3 to 1 month for expansion adults and 2 months for others

Potential Impact — Reduced visits or an increase in uncompensated care as people lose access to coverage.

January 1
Individuals denied Medicaid due to work reporting requirements will not qualify for ACA premium tax credits

Potential Impact — Reduced visits or an increase in uncompensated care as people lose access to coverage.

January 1
Lawfully present immigrants are ineligible for ACA premium tax credits

Potential Impact — Reduced visits or an increase in uncompensated care as people lose access to coverage.

January 4
Lawfully present immigrants — including refugees, asylees, and humanitarian parolees — are ineligible for Medicare

Potential Impact —Reduced visits or an increase in uncompensated care as people lose access to coverage.

October 1
Applicable provider tax rates for expansion states reduce from 6% by 0.5% a year until no higher than 3.5% in fiscal year 2032

Potential Impact — Expansion states may have to cut services, reduce provider reimbursements, raise taxes in other areas, and/or find innovative solutions to fund their portion of Medicaid.

2028
January 1
2027 funds must have been used; 2028 funds distributed
January 1
Fewer drugs become eligible for Medicare drug price negotiation under the orphan drug exclusion

Potential Impact — May lead to higher Medicare and patient out-of-pocket costs that reduce visits or treatment options.

January 1
SDPs paid at higher rates (grandfathered payments) reduce 10% annually until new caps reached

Potential Impact — Reduced money for Medicaid expansion states to fund their share of Medicaid payments.

October 1
Medicaid expansion adults with incomes above 100% of the FPL pay up to $35 (or up to 5% of income) for most services, excluding primary care, behavioral health and services at FQHCs, RHCs, and CCBHCs

Potential Impact — While FQHCs, RHCs, and CCBHCs are exempt, REHs and rural health systems may see reduced visits or an increase in uncompensated care as people face barriers to pay for their care.

2029
January 1
2028 funds must have been used; 2029 funds distributed
2030
January 1
2029 funds must have been used; 2030 funds distributed (must be used by year’s end)

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