What Does Passage of the One Big Beautiful Bill Mean for Medi-Cal and Medicare?

Top 3 Key Takeaways from this blog:

• Work Requirements for Medi-Cal – Adults ages 19–64 on Medi-Cal must meet work, school, or volunteer requirements starting by December 31, 2026, unless exempt (pregnant, disabled, or caring for children under 16). Eligibility will also be rechecked every six months.
• Restrictions on Immigrant Eligibility – The bill narrows which immigrant groups qualify for Medicare and Medicaid, limiting eligibility mainly to lawful permanent residents, certain Cuban and Haitian immigrants, and Compact of Free Association nationals.
• Massive Spending Cuts to Medicaid – Federal Medicaid spending will be reduced by about $1 trillion over the next decade, creating concerns about reduced access despite promises not to cut Medicare benefits directly.

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While the White House has been touting passage of the One Big Beautiful Bill (OBBB) Act as a win on taxes, immigration, and more, those who have been examining its health care provisions have had a much different take. Despite administration assurances that there would be no cuts to Medicaid and that spending would not be reduced on Medicare benefits, the new law includes significant changes that threaten to reduce access to these programs for many Americans who have relied on them.

According to the Department of Health Care Services, Medi-Cal (California’s Medicaid program), covers more than one-third of the state’s over 39 million residents. DHCS also notes that about 6.6 million Californians are enrolled in Medicare (5 million Medicare-only, and 1.6 million who are dually eligible for Medicare and Medicaid). Approximately 90 percent of the state’s Medicare beneficiaries are 65 and older. Thus, the changes introduced by the new law will affect a significant portion of the state’s population. Here’s what to know about the federal changes and how they might affect your coverage.

Work Requirements for Medicaid Eligibility

The major cuts to Medicaid that were included in the OBBB are expected to reduce spending on the federal program by approximately $1 trillion over the next decade. One of the most significant changes is the imposition of a work requirement for adults between 19 and 64—pregnant women, those with dependents under age 16, and those with physical or mental disabilities are exempt. These work requirements, which must be implemented by states by December 31, 2026, will mandate that those affected complete 80 hours of paid employment, school, or volunteer work per month. After that, states will be required to conduct eligibility redeterminations for Medicaid recipients every six months.

An analysis of 2023 Medicaid recipients showed that, in fact, only 8% of adults on the program were not working because they were “retired, unable to find work, or … not working for another reason.” Many of those in that last category were older adults (mostly women) who had left the workforce “to take care of family members, such as elderly parents or adult children or spouses with disabilities or a combination of the three.” Advocates note that rather than increasing employment, increased paperwork requirements to verify eligibility such as those mandated by the OBBB tend to discourage enrollment even among individuals who are qualified to receive benefits.

Limits on Immigrant Eligibility for Medicare and Medicaid

To be eligible to apply for Medicare as a retiree, previously existing law required that the applicant must:

• Be age 65
• Have worked for 10 years
• Be either a U.S. citizen or a permanent resident for at least 5 consecutive years

While the OBBB did not change the age or work requirements, it explicitly outlined which noncitizens would be eligible. Only Lawful Permanent Residents, certain Cuban immigrants, certain Haitian immigrants, and those living in the U.S. through a Compact of Free Association retain their eligibility. These categories also apply for Medicaid eligibility, excluding some categories of lawful immigrants such as refugees who were previously eligible for federally subsidized care.

Helping You Navigate a Changing Healthcare Landscape

If you’re uncertain of how the new provisions of the OBBB will affect your ability to get the medical coverage you need, you’re not alone. At Medical Insurance Today, our compassionate agents are here to help you understand your eligibility for federally subsidized health programs such as Medi-Cal (Medicaid) and Medicare under the updated rules. If you are no longer able to participate in these programs, we are committed to helping you find a health insurance plan that can provide the care and peace of mind you deserve. Our agents provide plain-language explanations in both English and Spanish to give you all the information you need to make the right choice for you. To start getting answers, contact us here today.