The One Big Beautiful Bill Act turned one year old on July 4. The law cuts $1.02 trillion from federal Medicaid and CHIP spending over ten years. The Congressional Budget Office projects 10.5 million people will lose coverage by 2034 — 5.3 million of those from work requirements alone. Those work requirements kick in December 31 and require Medicaid expansion enrollees ages 19–64 to log 80 hours a month of work, school, or community service to keep their coverage.

1. The Cuts Are Working as Intended (OMB Director Russell Vought, House Republicans)

The administration says Medicaid was paying for millions of people who shouldn't qualify — and work requirements are how you fix that.

Medicaid was covering people who shouldn't be on it. OMB Director Russell Vought made the case at his January 2025 Senate confirmation hearing: "This is the able-bodied population within Medicaid. This is not those that can't work... It will lead to people that were ineligible for Medicaid previously and subject to fraud, no longer being on the books."

Hospital closures are a myth, Republicans say. Rep. Zach Nunn (R-Iowa) is a vulnerable incumbent seeking a third term. He told WHO13 News in July 2025: "I think the myth here is that rural hospitals are going to close down. That's not the case."

2. But Hospitals Aren't Surviving (American Medical Association, MercyOne, Chadron Hospital)

Medical providers say specific services are ending right now — and rural communities won't get them back.

Iowa has already lost seven facilities in a year. MercyOne closed its Ottumwa and Traer locations, reduced staffing in Des Moines and Mason City, and ended urgent care and family medicine at South Des Moines on June 26. Southeast Iowa Regional Medical Center in West Burlington ceased birthing services. MercyOne's statement: "It is not possible to simply absorb such a significant financial impact without making thoughtful changes." Ottumwa — one of the closures — is in Rep. Nunn's district.

The closures go nationwide. Jon Reiners, CEO of Chadron Hospital in Nebraska, ended the hospital's dialysis services. Mark Nantz, President and CEO of Valley Health in Virginia, closed an observation unit. Nationwide, 446 hospitals across 44 states are vulnerable to closure. One-third of all rural hospitals — about 734 facilities — face serious risk.

Researchers project the cuts will cause tens of thousands of deaths. Adam Gaffney, M.D., MPH, an assistant professor of medicine at Harvard Medical School, published a study in Annals of Internal Medicine in June 2025. He projected that the Medicaid cuts and ACA marketplace changes together will cause 16,642 preventable deaths per year. Dr. Bruce A. Scott, M.D., President of the American Medical Association, said the law will have "a significant and negative impact on the ability of eligible individuals to access and maintain coverage."

3. And States Can't Fill the Gap (Idaho Gov. Brad Little, Iowa's Fiscal Reality)

The federal funding hole is bigger than any state can cover — including Republican-run states.

Idaho found out what happens when the money disappears. After the OBBBA passed and Governor Brad Little ordered state agencies to cut their budgets, Idaho's Medicaid contractor stopped paying for the state's Assertive Community Treatment program in December 2025. The program serves adults with serious mental illness. Four patients died. Idaho's legislature voted to restore funding, and Little signed the bill in April 2026. Idaho Medicaid Director Juliet Charron oversaw the restoration.

No state can cover a hole this size. State Medicaid budgets will collectively lose $664 billion through 2034, per RAND research. Iowa alone faces a $12.7 billion reduction — a 15.8% cut, the second-largest proportional loss of any state in the nation. The OBBBA included a $50 billion Rural Health Transformation Fund — roughly $10 billion a year spread nationally. The Georgetown Center for Children and Families says that's "far too small relative to the predicted adverse effects."

Where This Lands

The administration says work requirements push able-bodied adults toward self-sufficiency. They also say Medicaid was paying for people who don't qualify. Healthcare providers say the closures underway prove the cuts can't distinguish between fraud and essential services. They say rural communities are losing care they won't get back. State officials in both red and blue states say they can't fill a $664 billion hole. The work requirements kick in December 31.

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