The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, and final Congressional Budget Office scores have been released. The version of the bill passed by the Senate ultimately became the enacted text. Congress utilized the budget reconciliation process to advance the bill, which is commonly used to pass major legislation with small majorities.

In addition to making permanent many tax policy changes enacted during the first Trump administration, OBBBA includes a wide range of health care provisions. Notably, it rolls back several Medicaid expansion policies established under the Affordable Care Act (ACA), which was also passed via reconciliation. The law also includes a physician payment increase, makes certain telehealth policies permanent, and reforms provider tax policy. The PBM reform language from the House-passed bill was not included in the final version.

Key highlights of the health provisions included in the final OBBBA include:

• $930 billion in Medicaid savings over 10 years (compared to $800 billion in the House-passed version),
• Medicaid work/volunteer/study requirement applies to able-bodied adults, including parents of children over age 14 (the House version applied to childless adults aged 19-64),
• No PBM reform language included in the final bill,
• 2.5% payment increase for physicians,
• $50 billion for the new Rural Health Transformation Program to assist state initiatives aimed at improving access and outcomes for rural residents, and
• Permanent safe harbor for telehealth under high-deductible health plans, allowing pre-deductible coverage of telehealth and remote care services without affecting plan status.

H.R.1 – One Big Beautiful Bill Act

Subtitle B—Health

CHAPTER 1—MEDICAID

SUBCHAPTER A—REDUCING FRAUD AND IMPROVING ENROLLMENT PROCESSES

Sec. 71101. Moratorium on implementation of rule relating to eligibility and enrollment in Medicare savings programs

• Key Provisions: This section blocks the HHS Secretary from carrying out the final rule published by the Centers for Medicare & Medicaid Services (CMS) on September 21, 2023, titled “Streamlining Medicaid; Medicare Savings Program Eligibility Determination and Enrollment” (88 FR 65230) through September 30, 2034.
  • This final rule aimed to make it easier for eligible individuals to enroll in and retain their Medicare Savings Program (MSP) coverage. It included requirements to streamline application and enrollment processes, reduce costs, and protect individuals from cost-sharing.
• CBO Estimate: Projected to reduce spending by $66.008 billion over 2025-2034. No estimate on revenue provided.

Sec. 71102. Moratorium on implementation of rule relating to eligibility and enrollment for Medicaid, CHIP and the basic health program

• Key Provisions: This section blocks the HHS Secretary from carrying out the final rule published by the Centers for Medicare & Medicaid Services (CMS) on April 2, 2024, titled ‘‘Medicaid Program; Streamlining the Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes’’ (89 FR 22780) through September 30, 2034.
  • This final rule aimed to make it easier for eligible individuals to enroll in CHIP and in BHP coverage. The rule included requirements to streamline the enrollment processes, help people stay enrolled in these programs, and allow CHIP beneficiaries to re-enroll without a lock-out period.
• CBO Estimate: Projected to reduce spending by $55.855 billion over 2025-2034. Revenue is estimated to decrease by $2.225 billion over 2025-2034.

Sec. 71103. Reducing duplicate enrollment under the Medicaid and CHIP programs

• Key Provisions: Section 1902 of the Social Security Act is amended to require states to verify enrollee addresses using reliable data sources to prevent duplicate Medicaid enrollment in multiple states.
  • States would be required to routinely check for updated address information from trusted sources, like MCOs, and use that data to keep Medicaid records current. The Secretary of HHS would create a national system that can be used by HHS and States to prevent individuals from being enrolled in Medicaid in multiple states.
  • $10 million dollars would be authorized in FY 2026 to build the address checking system and set operating standards and $20 million would be authorized in FY 2029 to maintain and support the system.
  • Unless specifically exempt, the state must report certain enrollment information to CMS monthly and take follow up action if a dual enrollment is found.
• Effective Dates:
  • By January 1, 2027:
    • States must obtain enrolled individuals address information regularly
  • By October 1, 2029:
    • States must submit certain identifying information to a federal system created by the Secretary
• CBO Estimate: Projected to reduce spending by $17.419 billion over 2025-2034. No estimate on revenue provided.

Sec. 71104. Ensuring deceased individuals do not remain enrolled

• Key Provisions: Section 1902 of the Social Security Act is amended to require state Medicaid plans to review the Death Master File or similar data at least quarterly to confirm enrollee death status.
  • If an enrollee is found to be deceased, the state must follow a set process to remove them from Medicaid and stop payments for them.
  • If someone is mistakenly removed because of incorrect death information, the state is required to reenroll them and immediately reinstate their coverage.
  • States can also use other electronic data sources to help identify deceased enrollees, as long as they meet these requirements.
• Effective Dates: January 1, 2027
• CBO Estimate: Minimal projected change to federal spending. No estimate on revenue provided.

Sec. 71105. Ensuring deceased providers do not remain enrolled

• Key Provisions: Section 1902(kk)(1) of the Social Security Act is amended to require states to check the Death Master File as part of the enrollment, reenrollment, or revalidation process for Medicaid providers or suppliers to ensure Medicaid providers are not deceased when they sign up or renew their enrollment.
  • States must also conduct these checks at least quarterly while providers remain enrolled to identify if any provider or supplier is deceased.
• Effective Dates: January 1, 2028
• CBO Estimate: Minimal projected change to federal spending. No estimate on revenue provided.

Sec. 71106. Payment reduction related to certain erroneous excess payments under Medicaid

• Key Provisions: Section 1903(u)(1) of the Social Security Act is amended to limit the Secretary’s authority to waive reductions in Medicaid payments related to erroneous excess payments.
  • This provision allows a broader definition of erroneous excess payments to include services and items provided to people who are not eligible for federal Medicaid funding.
• Effective Dates: FY 2030
• CBO Estimate: Projected to reduce spending by $7.550 billion over 2025-2034. Revenue is estimated to decrease by $335 million over 2025-2034.

Sec. 71107. Eligibility redeterminations

• Key Provisions: Section 1902(e)(14) of the Social Security Act is amended to require states to redetermine Medicaid eligibility every 6 months for individuals enrolled under subsection (a)(10)(A)(i)(VIII), which covers Medicaid expansion adults.
  • The CMS Administrator will issue guidance not later than 180 days after enactment.
• Effective Dates: December 31, 2026
• CBO Estimate: Projected to reduce spending by $62.530 billion over 2025-2034. Revenue is estimated to decrease by $4.544 billion over 2025-2034.

Sec. 71108. Revising home equity limit for determining eligibility for long-term care services under the Medicaid program

• Key Provisions: Section 1917(f)(1) of the Social Security Act is amended to:
  • Set a cap of $1,000,000 on the maximum home equity value allowed when determining Medicaid eligibility for long-term care services, regardless of future inflation adjustments, with exception for homes on agricultural lots.
  • Prevents states from disregarding certain income or assets when evaluating eligibility for long-term care coverage unless they apply the home equity rules.
  • Require home equity limits to be used when assessing eligibility for long-term care Medicaid coverage for modified adjusted gross income (MAGI)- excepted enrollees.
• Effective Dates: January 1, 2028
• CBO Estimate: Projected to reduce spending by $195 million over 2025-2034. No estimate on revenue provided.

Sec. 71109. Alien Medicaid eligibility

• Key Provisions: Section 1903(v) of the Social Security Act is amended to redefine qualified alien to include Lawful Permanent Resident (LPR), specified Cuban immigrants, and individuals living in the United States through a Compact of Free Association (CoFA).
  • States will not be able to make Medicaid or CHIP payments to individuals who are not a resident of the United States or a qualified alien under the new definition.
  • This section provides CMS $15 million for FY 2026 for implementation.
• Effective Dates: October 1, 2026
• CBO Estimate: Projected to reduce spending by $6.211 billion over 2025-2034. No estimate on revenue provided.

Sec. 71110. Expansion FMAP for emergency Medicaid

• Key Provisions: Section 1905 of the Social Security Act is amended to equalize the FMAP for emergency Medicaid by ensuring unlawfully present aliens do not receive a higher rate than traditional Medicaid populations.
• Effective Dates: October 1, 2026
• CBO Estimate: Projected to reduce spending by $28.200 billion over 2025-2034. Revenue is estimated to decrease by $177 million over 2025-2034.

SUBCHAPTER B—PREVENTING WASTEFUL SPENDING

Sec. 71111. Moratorium on implementation of rule relating to staffing standards for long-term care facilities under the Medicare and Medicaid programs rule for nursing facilities

• Key Provisions: This section delays implementation of the final rule published by CMS on May 10, 2024, titled “Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting” (89 FR 40876) to September 30, 2034.
  • This final rule mandated that long-term care (LTC) facilities meet minimum staffing standards, including having a registered nurse on-site 24/7 and providing at least 3.48 total nursing hours per resident per day (HPRD). It also required state Medicaid agencies to disclose how much of their institutional LTC funding goes toward worker pay, and allocated resources to support individuals pursuing careers in nursing home care.
  • On April 7, 2025, the US District Court for Northern Texas rules to overturn the minimum staffing requirements.

• CBO Estimate: Projected to reduce spending by $23.123 billion over 2025-2034. No estimate on revenue provided.

Sec. 71112. Reducing state Medicaid costs

• Key Provisions:
  • Section 1902(a)(34) of the Social Security Act is amended to limit Medicaid retroactive coverage to the month preceding enrollment for ACA Medicaid expansion beneficiaries, and two months preceding enrollment for traditional Medicaid beneficiaries, instead of the previous three-month period.
  • Section 2102(b)(1)(B) of the Social Security Act is amended to require that states electing to provide retroactive CHIP or pregnancy-related assistance cannot provide coverage for services furnished before the month preceding the application month, whether the application was made by or on behalf of the individual.
  • This section provides CMS $10 million for FY 2026 for implementation.
• Effective Dates: December 31, 2026
• CBO Estimate: Projected to reduce spending by $4.206 billion over 2025-2034.  No estimate on revenue provided.

Sec. 71113. Federal payments to prohibited entities

• Key Provisions:  This section prohibits federal Medicaid direct spending funds from being used for 1 year to pay any “prohibited entity” for services under a state plan or waiver.
  • A “prohibited entity” is a 501(c)(3) tax-exempt essential community provider primarily offering family planning and reproductive health services other than those allowable under the Hyde Amendment, and that received over $800,000 in combined federal and state Medicaid payments in fiscal year 2023.
  • This section provides CMS $10 million for FY 2026 for implementation.
• Effective Dates: Upon enactment for 1 year.
• CBO Estimate: Projected to increase spending by $53 million over 2025-2034.  No estimate on revenue provided.

SUBCHAPTER C—STOPPING ABUSIVE FINANCING PRACTICES

Sec. 71114. Sunsetting increased FMAP incentive

• Key Provisions: Section 1905(ii)(3) of the Social Security Act is amended to eliminate the 5% FMAP bonus previously given to states that newly adopted ACA expansion.
  • Ends the 5-percentage point bonus in federal Medicaid funding that non-expansion states currently get if they choose to expand Medicaid.
• Effective Dates: January 1, 2026
• CBO Estimate: Projected to reduce spending by $13.629 billion over 2025-2034.  Revenue is estimated to decrease by $851 million over 2025-2034.

Sec. 71115. Provider taxes

• Key Provisions: Section 1903(w)(1)(A)(iii) of the Social Security Act is amended to alter the threshold for the hold harmless provision to prevent states from increasing existing provider taxes or broadening their base.
  • Existing taxes in non-expansion states that comply with the previous 6% threshold remain unchanged.
  • Expansion states with existing taxes are allowed to keep the lower of:
    • Their existing rate, or
    • A declining cap that starts at 5.5% in FY 2028 and drops each year by 0.5% to 3.5% in FY 2032.
      • Existing taxes on skilled nursing facility services and intermediate care facilities are exempt the declining cap.
  • New taxes in both expansion and non-expansion states are not permitted after the date of enactment.
  • This section provides CMS $20 million for FY 2026 for implementation.
• Effective Dates: October 1, 2026
• CBO Estimate: Projected to reduce spending by $191.118 billion over 2025-2034. Revenue is estimated to decrease by $8.424 billion over 2025-2034.

Sec. 71116. State directed payments

• Key Provisions: Section 438.6(c)(2)(iii) of title 42, Code of Federal Regulations, is amended to cap Medicaid state directed payments to no more than 100% for expansion states and 110% for non-expansion states of the specified total published Medicare payment rate for services furnished during rating periods starting on or after the enactment date.
  • For non-expansion states, existing state-directed payment limits would be reduced by 10% annually beginning January 1, 2028, until the allowable Medicare-related payment limit is achieved.
  • This section provides the Secretary $7 million each year from FY 2026 to Fy 2033 for implementation.
• Effective Dates: January 1, 2027
• CBO Estimate: Projected to reduce spending by $149.424 billion over 2025-2034.  No estimate on revenue provided.

Sec. 71117. Requirements regarding waiver of uniform tax requirement for Medicaid provider tax

• Key Provisions: Section 1903(w) of the Social Security Act is amended to clarify conditions under which a health care related tax is not considered “generally redistributive” for Medicaid provider tax purposes. It specifies that a tax is not considered to be generally redistributive if:
  • Tax rates on taxpayers or groups with lower Medicaid taxable units are lower than those with higher Medicaid taxable units
  • Tax rates on Medicaid taxable units are higher than on non-Medicaid taxable units
  • Tax exclusions or lower rates are imposed on certain taxpayers/groups resulting in effects similar to the above conditions, including cases using proxy terminology or approximations of Medicaid-related units
• Effective Dates: Immediately upon enactment, subject to any transition determined appropriate by the Secretary, and not to exceed 3 fiscal years.
• CBO Estimate: Projected to reduce spending by $34.606 billion over 2025-2034.  Revenues estimated to decrease by $638 million over 2025-2034.

Sec. 71118. Requiring budget neutrality for Medicaid demonstration projects under Section 1115

• Key Provisions: Section 1115 of the Social Security Act is amended to require that all demonstration waivers be certified as budget neutral by CMS’s Chief Actuary.
  • If the project results in Federal spending savings during an approval period, the Secretary must establish a methodology for accounting for those savings in subsequent approval periods.
  • This section provides CMS $5 million each year from FY 2026 to FY 2027 for implementation.
• Effective Dates: January 1, 2027
• CBO Estimate: Projected to reduce spending by $3.172 billion over 2025-2034. Revenues estimated to decrease by $36 million over 2025-2034.

SUBCHAPTER D—INCREASING PERSONAL ACCOUNTABILITY

Sec. 71119. Requirement for states to establish Medicaid community engagement requirements for certain individuals

• Key Provisions: Section 1902 of the Social Security Act is amended to require states to implement a community engagement work requirement for specific Medicaid enrollees to maintain eligibility.
  • Requires “applicable individuals” to complete at least 80 hours per month of community engagement activities to maintain eligibility. “Applicable individuals” are those who do not meet the below exemptions and are between the ages of 19 and 64 and eligible for Medicaid. Community engagement includes, but is not limited to, work, community service, job training, or education, etc.
  • States must exempt certain populations from program requirements, including individuals under age 19; those who are pregnant or postpartum; medically frail or disabled; veterans with a total disability rating; former foster youth up to age 26; and caregivers of children or dependents with disabilities who are 14 years old or younger. Exemptions also apply to eligible American Indians and Alaska Natives, individuals actively participating in substance use or alcohol treatment and rehabilitation programs, and those recently released from incarceration.
  • States also have the option to grant short-term hardship exemptions for reasons such as hospitalization, natural disasters, or travel for medical services not available within their community.
  • States must verify compliance during Medicaid eligibility determinations and redeterminations, using existing data when possible, and without requiring the applicable individual to submit additional information, if possible.
  • States must provide notices to enrollees explaining the requirements and consequences of noncompliance at least three months before the requirement takes effect. If an enrollee does not comply, states must provide a notice and an opportunity to comply or demonstrate an exemption within 30 days, along with appeal rights before terminating benefits.
  • By June 1, 2026, the Secretary of HHS must release an interim final rule for the purposes of implementation.
  • This section provides CMS $200 million for FY 2026 for implementation.
• Effective Dates: December 31, 2026
• CBO Estimate: Projected to reduce spending by $325.610 billion over 2025-2034.  Revenues estimated to decrease by $8.650 billion over 2025-2034.

Sec. 71120. Modifying cost sharing requirements for certain expansion individuals under the Medicaid program

• Key Provisions: Section 1916 of the Social Security Act is amended to require states to impose cost sharing on specified individuals enrolled in Medicaid expansion, beginning October 1, 2028.
  • Requires states to impose cost sharing greater than $0 for Medicaid expansion enrollees with incomes above 100 percent of the FPL.
  • Cost sharing cannot exceed $35 per item or service, excluding prescription drugs, which follow existing cost-sharing caps under Section 1916A.
  • The total cost sharing amount for all family members cannot exceed 5% of the family’s income, calculated monthly or quarterly as determined by the state.
  • Cost sharing may not be applied to primary care, mental health care, or substance use disorder services, or services provided by Federally Qualified Health Centers, certified community behavioral health clinics, or rural health clinics.
  • States may allow providers to require payment before providing care, but providers can choose to reduce or waive the charge on a case-by-case basis.
  • This section provides CMS $15 million for FY 2026 for implementation.
• Effective Dates: October 1, 2028
• CBO Estimate: Projected to reduce spending by $7.444 billion over 2025-2034.  No estimate on revenue provided.

SUBCHAPTER E—EXPANDING ACCESS TO CARE

Sec. 71121. Making certain adjustments to coverage of home or community-based services under Medicaid

• Key Provisions: Section 1915(c) of the Social Security Act is amended to allow states to establish new standalone waivers to expand access to home and community-based services (HCBS) under Medicaid, beginning July 1, 2028.
  • States may apply for a waiver to provide HCBS to individuals who do not meet institutional level-of-care requirements, using alternative needs-based eligibility criteria approved by the Secretary. Waivers are initially approved for 3 years and renewable in 5-year increments, provided states meet performance standards.
  • Waivers must not increase wait times for individuals who qualify under traditional HCBS waivers and must not raise average per-person costs above those for institutional care.
  • States must collect and report annual data to the Secretary on service costs, duration of services, and number of beneficiaries, including comparisons with institutional care populations.
  • $50 million is appropriated to CMS for FY 2026 for implementation.
  • $100 million is appropriated for FY 2027 to support states in delivering HCBS, distributed proportionally based on each state’s HCBS-eligible population.
• Effective Dates: July 1, 2028
• CBO Estimate: Projected to increase spending by $6.580 billion over 2025-2034.

CHAPTER 2—MEDICARE

SUBCHAPTER A—STRENGTHENING ELIGIBILITY REQUIREMENTS

Sec. 71201. Limiting Medicare coverage of certain individuals

• Key Provisions: Title XVIII of the Social Security Act is amended to limit non-citizenship eligibility for Medicare for 1) a citizen of the United States, 2) lawful permanent residents, 3) an alien who has been granted certain Cuban and Haitian entrant, and 3) CoFA migrants lawfully residing in the U.S.
  • Requires the Social Security Commissioner to complete a review of the individuals entitled to or enrolled in benefits no later than 1 year after the date of enactment and notify beneficiaries if their benefits will be terminated within 18 months of the date of enactment.
• Effective Dates: 1 year after date of enactment.
• CBO Estimate: Projected to reduce spending by $5.096 billion over 2025-2034. Revenues estimated to decrease by $123 million over 2025-2034.

SUBCHAPTER B—IMPROVING SERVICES FOR SENIORS

Sec. 71202. Temporary payment increase under the Medicare Physician Fee Schedule to account for exceptional circumstances

• Key Provisions: Section 1848(t) of the Social Security Act is amended to provide a temporary 2.5% increase in payments under the Medicare Physician Fee Schedule to account for exceptional circumstances.
• Effective Dates: January 1, 2026, through January 1, 2027
• CBO Estimate: Projected to increase spending by $1.908 billion over 2025-2034. No estimate on revenue provided.

Sec. 71203. Expanding and clarifying the exclusion for orphan drugs under the Drug Price Negotiation Program

• Key Provisions: Section 1192(e) of the Social Security Act is amended to expand the exclusion for orphan drugs under the Drug Price Negotiation program to change the language so it would apply to drugs that treat “one or more” rare disease, instead of only one.
  • This section clarifies that if a drug loses its orphan drug status, the negotiation eligibility timeline starts after the drug is no longer considered an orphan drug.
• Effective Dates: January 1, 2028
• CBO Estimate: Projected to increase spending by $4.871 billion over 2025-2034. No estimate on revenue provided.

CHAPTER 2—HEALTH TAX

SUBCHAPTER A—IMPROVING ELIGIBILITY CRITERIA

Sec. 71301. Permitting premium tax credits only for certain individuals

• Key Provisions: Section 36B(e) of the Patient Protection and Affordable Care Act is amended to limit eligibility for premium tax credits (PTC) to eligible aliens, including 1) lawful permanent residents, 2) certain Cuban immigrants, and 3) Compact of Free Association migrants (citizens of Micronesia, the Marshall Islands, and Palau).
  • This eliminates PTC eligibility for all other lawfully present non-citizens.
• Effective Dates: December 31, 2026
• CBO Estimate: Projected to reduce spending by $69.765 billion over 2025-2034. Revenues estimated to increase by $4.771 billion over 2025-2034.

Sec. 71302. Disallowing premium tax credit during periods of Medicaid ineligibility due to alien status

• Key Provisions: Section 36B(c) and Section 1331(e)(1)(B) of the Patient Protection and Affordable Care Act are amended to remove PTC eligibility for those with alien status during periods of Medicaid ineligibility.
• Effective Dates: December 31, 2025
• CBO Estimate: Projected to reduce spending by $49.527 billion over 2025-2034. Revenues estimated to increase by $176 million over 2025-2034.

SUBCHAPTER B—PREVENTING WASTE, FRAUD, AND ABUSE

Sec. 71303. Requiring verification of eligibility for the premium tax credit

• Key Provisions: Section 36B(c) of the Patient Protection and Affordable Care Act is amended to require verification of specific insurance information for those applying for PTCs.
  • This provision now requires household income and family size, whether the individual is an eligible alien, current health coverage or eligibility for other coverage, and any other information deemed necessary by the Secretary of the Treasury.
  • Requires the Exchange to implement a pre-enrollment income verification process.
• Effective Dates: December 31, 2027
• CBO Estimate: Projected to reduce spending by $36.930 billion over 2025-2034. Revenues estimated to increase by $4.384 billion over 2025-2034.

Sec. 71304. Disallowing premium tax credit in case of certain coverage enrolled in during special enrollment period

• Key Provisions: Section 36B(c)(3)(A) of the Patient Protection and Affordable Care Act is amended restricting access to PTCs for certain individuals who enroll in coverage during an open enrollment period or a special enrollment period (SEP).
  • Disallows PTCs for individuals who enroll in an exchange plan during an income-based SEP, without another accompanying change in qualifying circumstances (ex. marriage, death, etc.)
• Effective Dates: December 31, 2025
• CBO Estimate: Projected to reduce spending by $39.482 billion over 2025-2034. Revenues estimated to increase by $1.303 billion over 2025-2034.

Sec. 71305. Eliminating limitation on recapture of advance payment of premium tax credit

• Key Provisions: Section 36B(f)(2) of the Patient Protection and Affordable Care Act is amended to increase repayment requirements for those who receive excess Advanced PTCs.
  • Eliminates the repayment cap for APTCs, instead of the currently available cap for those with incomes below 400% of the FPL.
• Effective Dates: December 31, 2025
• CBO Estimate: Projected to reduce spending by $17.264 billion over 2025-2034. Revenues estimated to increase by $2.283 billion over 2025-2034.

SUBCHAPTER C—ENHANCING CHOICE FOR PATIENTS

Sec. 71306. Permanent extension of safe harbor for absence of deductible for telehealth services

• Key Provisions: Subparagraph (E) of section 223(c)(2) of the Patient Protection and Affordable Care Act is amended to permanently create a safe harbor for high-deductible health plans when it comes to telehealth and remote care services. A health plan will still be considered a high-deductible health plan if it covers telehealth or other remote care services without requiring the patient to first meet their deductible.
• Effective Dates: December 31, 2024

• CBO Estimate: No estimate on spending provided. Revenues estimated to decrease by $4.320 billion over 2025-2034.

Sec. 71307. Allowance of bronze and catastrophic plans in connection with health savings accounts

• Key Provisions: Section 223(c)(2) of the Patient Protection and Affordable Care Act is amended to include Bronze and Catastrophic plans in the definition of high deductible health plans. “High deductible plans” are a plan which is available through the Exchange and is described in subsection (d)(1)(A) or (e) of section 1302 of such Act.
• Effective Dates: December 31, 2025
• CBO Estimate: No estimate on spending provided. Revenues estimated to decrease by $3.563 billion over 2025-2034.

Sec. 71308. Treatment of Direct Primary Care Service Arrangement

• Key Provisions: Section 223(c)(1) of the Patient Protection and Affordable Care Act is amended to define the treatment of direct primary care service agreements as an arrangement that will not be treated as a health plan. This arrangement will only consist of primary care services for an individual that does not exceed $150 per month per individual.
• Effective Dates: December 31, 2025
• CBO Estimate: No estimate on spending provided. Revenues estimated to decrease by $3.993 billion over 2025-2034.

CHAPTER 4—PROTECTING RURAL HOSPITALS AND PROVIDERS

Sec. 71401. Rural Health Transformation Program

• Key Provisions: Section 2105 of the Social Security Act is amended to add the Rural Health Transformation Program to assist state initiatives aimed at improving health care access and outcomes for rural population.
  • $10 billion will be allocated each year from FY 2026 to FY 2030. 50% of funds will be allocated equally across all states with accepted applications, and 40% of the amounts will be appropriated by the CMS Administrator.
  • States will submit an application to the Administrator during a specified period, ending no later than December 31, 2025, including a detailed rural health transformation plan.
  • States are not required to provide any matching funds as a condition for receiving payments.
  • States will be required to submit annual reports.
  • States will be able to use these funds for 3 or more of the following or similar activities:
    • Promoting evidence-based, measurable interventions to improve chronic disease management and prevention,
    • Provide payments to healthcare providers,
    • Promote technology-driven solutions for chronic diseases,
    • Providing training and technical assistance for development and adoption of technology-enabled solutions,
    • Recruit and retain workforce talent for rural areas,
    • Helping rural communities identify preventive, ambulatory, pre-hospital, emergency, acute inpatient care, outpatient care, and post-acute care service lines,
    • Supporting access to opioid use disorder treatment services,
    • Support innovative models of care, and
    • Additional uses designed to promote high quality rural healthcare.
• Effective Dates: Applications due no later than December 31, 2025.

• CBO Estimate: Projected to increase spending by $47.152 billion over 2025-2034. No estimate on revenue provided.

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This Applied Policy® Summary was prepared by Caitlyn Bernard with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact her at CBernard@appliedpolicy.com or at (202) 558-5272.