HR1 Medicaid Changes for Health Centers: Could You Lose 10–25% of Your Medicaid Patients?
Key Takeaways
HR1 (the One Big Beautiful Bill, signed July 4, 2025) is now in imple
mentation. Three Medicaid changes affect health centers in 2026–2027.
Six-month redeterminations: Medicaid expansion adults (19–64) will be redetermined every 6 months instead of annually, starting end of 2026.
Work requirements: Expansion adults must document 80 hours/month of work, training, education, or community service, verified at application and renewal—states live by 2027.
Immigrant eligibility cuts: Starting October 1, 2026, refugees, asylees, TPS holders, and similar lawfully present groups lose federally funded Medicaid; emergency Medicaid remains.
Financial impact: Analysts advise modeling a 10–25% drop in your Medicaid population, with uninsured patients rising by the same amount. Medicaid is roughly 35–40%+ of health center operating revenue.
The fix: A six-move survival plan—know your number, build a Medicaid retention function, verify coverage at every visit, communicate proactively, plan for the October cliff, and budget charity care on purpose.
If your CEO coaching calls sound anything like ours, one question keeps surfacing: “What are we going to do about our patients losing their Medicaid?” HR1 - the One Big Beautiful Bill - is in implementation, and the operational changes are landing this year and into 2027. Here’s the plain-English map of what’s changing, what it does to your revenue, and a concrete plan to get ahead of it.
What is HR1 and why does it matter for health centers?
HR1, often called the One Big Beautiful Bill, was signed into law on July 4, 2025. Among many provisions, it makes three significant changes to Medicaid that directly affect federally qualified health centers (FQHCs), safety-net providers, and the patients they serve. Because Medicaid is the single largest payer for most health centers—roughly 35–40% or more of operating revenue—any rule that pushes patients off Medicaid hits health center finances immediately. Much of the implementation detail is decided state by state, so treat this as your map and confirm specifics with your own state Medicaid agency. (This is general information, not legal advice.)
The 3 HR1 Medicaid changes at a glance
HR1 Change
What Changes
Effective
Six-month redeterminations
Medicaid expansion adults (19–64) are redetermined every 6 months instead of annually.
End of 2026
Work / community engagement requirements
80 hours/month of work, job training, education, or community service; verified at both application and renewal.
States live by Jan 1, 2027 (some earlier); federal guidance mid-2026
Immigrant eligibility narrowing
Refugees, asylees, TPS holders, humanitarian parolees, and trafficking/DV survivors lose federally funded Medicaid. Emergency Medicaid remains.
October 1, 2026
What are the new six-month Medicaid redeterminations?
Today, most Medicaid expansion patients have their eligibility redetermined once a year. Under HR1, that becomes every six months for the expansion population (adults 19–64), starting at the end of 2026. The real risk isn’t that people become genuinely ineligible - it’s administrative churn. Every redetermination cycle, some eligible patients fall off the rolls because they miss a notice, the form goes to an old address, or they can’t read it in their language. Doubling the frequency doubles the chances of losing an eligible patient over a piece of mail. Often, neither the patient nor your front desk learns about the lapse until a claim is denied.
What are Medicaid work requirements under HR1?
HR1 requires Medicaid expansion adults (19–64) to document 80 hours per month of work, job training, education, or community service to keep coverage. There are exemptions for certain populations, but the baseline is 80 hours/month, verified at both application and renewal. States must implement by 2027, with federal guidance expected mid-2026, and some states are moving earlier. Importantly, the law prohibits Medicaid managed care plans from determining compliance, so don’t assume the health plan will handle this for your patients. Most coverage loss here will come from the reporting burden, not genuine ineligibility: many working patients already meet the 80-hour bar but may not document it correctly or on time. The health center that helps patients understand and document these requirements is the one that keeps those patients insured.
How does HR1 change Medicaid eligibility for legally present immigrants?
Starting October 1, 2026, federally funded Medicaid and CHIP eligibility narrows to a smaller set of non-citizens—essentially lawful permanent residents (green card holders), certain Cuban and Haitian entrants, and people from the Compact of Free Association nations. Groups who are here lawfully and have been eligible for years - refugees, people granted asylum, people with Temporary Protected Status (TPS), certain humanitarian parolees, and survivors of trafficking and domestic violence - will become ineligible for federally funded Medicaid. Two nuances matter for planning: emergency Medicaid does not go away (anyone can still get it regardless of status, though the federal match is changing), and marketplace subsidies have been tightened, so for many low-income immigrant patients the marketplace is not a clean fallback. If your health center serves refugee, asylee, or TPS communities, look at your panel now and count how many currently insured patients will be uninsured the day this takes effect. They won’t stop being your patients—they’ll just come to you without coverage.
How much revenue could your health center lose under HR1?
Put the three changes together and a meaningful share of your Medicaid patients become uninsured—not because they leave, but because they lose coverage. Industry analysts are projecting billions of dollars a year in added uncompensated care and administrative burden across safety-net providers, and they’re advising leaders to model scenarios where the Medicaid population shrinks by 10–25% over the next few years while the uninsured population grows by the same amount. The math is brutal because it’s the same patient, same visit, and same cost to deliver care—at a fraction of the revenue, since a Medicaid visit becomes a sliding-fee or charity-care visit. If you don’t plan for it, this surprises you mid-year: your payer mix shifts, your charity care line balloons, and you’re explaining an unbudgeted hole to your board in the fourth quarter.
Your 6-move HR1 survival plan for FQHCs
Know your number. Quantify what percentage of your revenue and patient panel is Medicaid expansion, and how many patients fall into the immigrant categories losing eligibility in October. Model a 10–25% shift to uninsured and put a real dollar figure on it.
Turn enrollment into a Medicaid retention machine. This is your highest-ROI move. Know patients’ redetermination dates, reach out before deadlines, and help them re-verify, update addresses, and document work hours. Every patient you keep enrolled keeps you reimbursed.
Build the verification and re-enrollment workflow now. Verify insurance at every visit, flag upcoming redetermination dates in your system, and build a warm hand-off to marketplace or sliding-fee options when someone loses coverage.
Get ahead of patient communication. Patients will get confusing state letters they may not open or understand. Use proactive, plain-language, multi-channel outreach in your patients’ languages—AI-powered patient engagement tools make this scalable instead of stuffing envelopes by hand. I did podcast episodes on using AI in healthcare you can find here and here.
Map your immigrant population for the October cliff. Identify affected patients now and plan how you’ll keep caring for them: sliding fee, enabling services, emergency Medicaid where it applies, and any state or local coverage that still exists.
Budget charity care on purpose. Build the number from move one into your financial plan, walk your board through it before it becomes a variance, and fund offsets through Rural Health Transformation dollars, grants, foundation support, and tighter revenue cycle.
Why cutting your way out of HR1 doesn’t work
When payer mix shifts and charity care grows, the instinct is to cut - staff, hours, services. But cutting your way out of a financial squeeze almost always makes it worse: you cut access, fewer patients come, revenue drops further, and you enter a downward spiral that’s hard to escape. The health centers that come through this in good shape won’t be the ones that cut the fastest. They’ll be the ones that protected access, kept eligible patients covered, got more efficient, and planned for charity care instead of being ambushed by it.
Frequently Asked Questions
When do the HR1 Medicaid work requirements take effect?
States must implement the 80-hour-per-month work (community engagement) requirements by 2027, with federal guidance to states expected by mid-2026. Some states are signaling they will move earlier.
Who is affected by the new six-month Medicaid redeterminations?
The Medicaid expansion population—adults ages 19–64 covered through expansion—will be redetermined every six months instead of annually, beginning at the end of 2026.
Which immigrants lose Medicaid eligibility under HR1?
Starting October 1, 2026, lawfully present groups including refugees, asylees, TPS holders, certain humanitarian parolees, and survivors of trafficking and domestic violence lose federally funded Medicaid. Lawful permanent residents, certain Cuban and Haitian entrants, and Compact of Free Association migrants generally remain eligible.
Does emergency Medicaid still apply after HR1?
Yes. Emergency Medicaid remains available regardless of immigration status, but it covers emergencies only—not primary or preventive care—and the federal match is changing.
How much Medicaid revenue could a health center lose?
Analysts recommend modeling a 10–25% decline in your Medicaid population over the next few years, with the uninsured population rising by the same amount. Because Medicaid is roughly 35–40%+ of operating revenue for most health centers, the impact on the bottom line can be substantial.
What should FQHCs do first to prepare for HR1?
Start by “knowing your number”—quantify your Medicaid-expansion and at-risk-immigrant exposure, model a 10–25% shift to uninsured, and put a dollar figure on it. That number drives every other decision, including how much charity care to build into your budget.
Get the free HR1 planning worksheet
Want help with move one? Email [email protected] with “HR1 Plan” in the subject line for a simple worksheet to model your Medicaid-to-uninsured exposure and build the charity care number into your budget. You can also schedule a call at jillsteeley.com to talk through where your health center stands. Leaders who want to work through this alongside other executives can learn more about CEO Bootcamp, run by Jill Steeley and Steve Weinman, here.
►Listen to Episode #32 of the Community Health Collective Podcast
