Jul 14 Reconciliation Wrap-up

(July 14, 2025)

On July 3rd, Congress passed, and the President signed, H.R.1., also known as the One Big Beautiful Bill (OBBB) Act. Allies for Children has followed the reconciliation process that produced the OBBB, and highlighted concerns about the impact that potential cuts to Medicaid, overall healthcare access, and SNAP could have on low income children and families. The bill passed the House with votes of 218 in favor of and 214 against the bill, and went to the President’s desk for final signature alongside a 4th of July celebration. Although there were changes to details of health-related provisions as the bill made its way through the House and Senate, the final version of the bill contained provisions that will significantly impact children and families. Preliminary cost estimates of the provisions paint a picture where coverage losses are significant for low- and middle-income children and families.

The OBBB will cut Medicaid by more than $1 trillion over a 10 year period, which is the largest cut to the program in its history. Millions of people on Medicaid will become uninsured due to the policy changes in the bill, such as work certification requirements and biannual renewals for the Medicaid Expansion population. Recent estimates find that 17 million Americans will lose coverage under this bill, including seniors, veterans, children and people with disabilities. Governor Shapiro’s administration estimates that nearly 144,000 Pennsylvanians will lose access to food due to SNAP cuts and 310,000 could lose Medicaid coverage statewide. Researchers from Harvard and the University of Pennsylvania have estimated that the OBBB cuts could be fatal for more than 50,000 people yearly, including the death of 18,200 individuals eligible for Medicaid and Medicare, 20,000 people due to Affordable Care Act changes, and 13,000 due to nursing home staffing cuts. The timeline on implementing these new policies varies, and Allies for Children will be monitoring state implementation and impact. Major Medicaid provisions, such as work requirements and biannual renewals are slated for implementation in January 2027.

The bill also eliminates incentives for states to expand Medicaid and limits the way states fund Medicaid. Cuts are steeper in Medicaid Expansion states like Pennsylvania. These cuts have an impact on hospitals, especially rural hospitals, which already operate on razor thin margins, and often rely heavily on Medicaid for financing. Medicaid cuts are also likely to increase uncompensated care – also known as medical debt – which will impact individuals and the hospital systems.

The bill’s provisions related to Medicaid and SNAP renewals for parents are likely to have ripple effects on K-12 student benefits. Medicaid is a state-federal partnership, and several provisions will make it more challenging for states to draw down on the matching funds. Research shows Medicaid enrollment supports student success. Medicaid-eligible parents of some school-age children will need to provide work requirements for the first time and will be subject to the Medicaid Renewal process every six months, which is likely to impact Medicaid coverage not only for the parent, but also for the child.

As this bill is implemented, and the state budget passes, the impact to the larger community will become clearer. Medicaid is the fourth-largest federal funding stream for schools. Currently, Medicaid plays a huge role in funding school-based healthcare services and supports more than $7.5 billion in school health services each year.

SNAP funding between the federal and state governments has become more complex. It also shifts a greater share of the cost of providing food assistance through SNAP to states. The Urban Institute estimated that the OBBB SNAP provisions will cause the average family to lose an average of $146 a month in groceries, and that 62% of these families include children. For the first time, many states, including Pennsylvania, will have to pay a share of SNAP.

SNAP will also expand work requirements. Currently, only adults up to age 54 need to show proof of working at least 20 hours a week or participate in a training program. Now, adults up to 64 must meet work requirements, and parents of children older than 14 will not be exempt from requirements.

Reduced federal funding for these programs will inevitably impact the state budget, and could lead states to limit eligibility for these benefits. States and school districts use benefit programs to provide automatic eligibility for programs like school lunches, and for states like PA that offer free lunch, this triggers the federal reimbursement to help fund free meals.

Allies for Children will continue to monitor OBBB as it is implemented, and as the impact to our systems and families becomes more clear.

Learn about fact checking rhetoric on the bill here.

Cristina Codario, Allies for Children Policy Director