07/03/2025
A letter from our CEO:
Today, the House passed the Senate’s version of the Budget Reconciliation Bill. The bill now goes to President Trump for his signature. The bill passed 218 to 214, with all Democrats voting against, along with the following Republicans: Brian Fitzpatrick of Pennsylvania and Tom Massie of Kentucky.
Let me be clear – this bill will make life much more difficult for many people with intellectual and developmental disabilities. Our public policy team has reviewed the approved legislation and created this summary document (attached). At the topline level, we know the bill includes:
Nearly $1 trillion in Medicaid cuts, nearly 20% of the federal Medicaid budget. Nearly 17 million will lose coverage.
Nearly $200 billion in cuts to SNAP food assistance.
A new private school voucher program that redirects public education funding to private schools without protections for students with disabilities.
While insufficient to counter the historic cuts to the Medicaid program, the final bill does include a new standalone HCBS option to allow states to create a new waiver to serve people who do not meet an institutional level of care if other conditions are met.
THANK YOU for all of your hard work to advocate for the critical programs that support people with disabilities. It may not feel like it right now, but we made a difference. The Arc’s grassroots network responded like never before – since the beginning of the year, we’ve generated more than 500,000 contacts to Congress. During his floor speech today, Leader Jefferies shared 8 stories from advocates from The Arc.
The Arc showed up in Congressional offices around the country. A shout out to The Arc of North Carolina who met with Senator Tillis last week and worked hard to share stories about the potential impact from people with disabilities and their families, days before he made his decision to oppose the legislation. The Arc of Pennsylvania and The Arc of Philadelphia worked closely with Rep. Brian Fitzpatrick to stand up for people with IDD.
A huge thank you to The Arc of Maryland and The Arc of Montgomery County for coming to the Capitol on short notice today, the day of the vote, to go to the offices of Members that were wavering until the last minute.
Thank you to all the chapters that leaned on your personal relationships with Members of Congress and their staff for doing the behind-the-scenes work of educating them on what these cuts would mean to our community. In these partisan times, The Arc is relied on to be able to hold these relationships, get in the door with elected officials of all political ideologies, and do the work. It doesn’t get the headlines or the glory, but it’s so important to the entire effort.
As the policy implementation now heads to the states, we will work together to mitigate the impact on people with disabilities, their families, and caregivers.
For now, rest, recover, and know that I’m immensely proud of The Arc.
Best,
Katy
Attachment:
Final Budget Reconciliation Provisions Related to
Medicaid, SNAP, and Education
July 3, 2025
On July 3, 2025, the House of Representatives passed H.R. 1, 218 in support
214 opposed. Rep. Massie (R-KY) and Rep. Fitzpatrick (R-PA) voted no, as did
all Democratic Members. This occurred after a marathon session to pass the
rule allowing the bill to proceed and a House record breaking speech by
Minority Leader Jeffries (D-NY), clocking in at 8 hours and 45 minutes.
This follows the July 1st action by the U.S. Senate which passed the
reconciliation bill on a 50-50 vote with Vice President Vance breaking the tie.
Republicans who voted against the bill were Senators Collins (ME), Tillis (NC),
and Paul (KY).
The bill now goes to the President for his expected signature.
Following is a summary of what is in the bill:
Medicaid
According the nonpartisan Congressional Budget Office (CBO), the Senate bill
cuts Medicaid by nearly $1 trillion, approximately $200 billion more than the
House bill. Taking into account that the bill does not extend the ACA
enhanced premium tax credits, CBO estimates this bill would lead to nearly 17
million losing health care.
CBO estimates the proposed Medicaid cuts would cost states $200 billion
over ten years due to reduced federal funding and restrictions on how states
can finance their Medicaid programs. The federal cuts would force state
changes including “reducing provider payment rates, reducing the scope or
amount of optional services, and reducing Medicaid enrollment.” Of the 7.8
million people CBO expects to lose Medicaid and become uninsured, 2 million
would lose coverage because of state responses to increased financial
pressure.
Large-scale coverage losses would add other costs to states that CBO’s
estimates don’t reflect, including increases in uncompensated care, a sicker
workforce, job loss in the health care sector, and loss of tax revenue. These
impacts would further burden state budgets, which are already under strain.
CONTACT US FOR MORE INFORMATION
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New HCBS Provision
Subchapter E, Section 71123 of HR 1 was added to the final Senate bill but
inadvertently was left out of our previous summary. The provision seeks to
expand Medicaid coverage for home and community-based services (HCBS),
primarily by creating a new type of standalone waiver under Section 1915(c)
of the Social Security Act.
• New Standalone HCBS Waivers: The Secretary of Health and Human
Services can approve new, separate waivers for states to provide HCBS
as medical assistance. These waivers will have an initial term of 3
years, extendable for 5-year periods.
• Expanded Eligibility: Unlike previous waivers that required individuals
to meet institutional level-of-care criteria, these new waivers will
allow states to establish needs-based criteria for HCBS eligibility,
subject to federal approval. This means individuals who do not require
institutional care could become eligible for HCBS.
• States must demonstrate that the new waiver will not significantly
increase wait times for HCBS for individuals who do meet institutional
level-of-care criteria.
• Requires states to establish more stringent needs-based criteria for
individuals requiring institutional level of care (hospital, nursing
facility, or intermediate care facility for individuals with developmental
disabilities) compared to the HCBS eligibility criteria.
Expect more information about this provision and the implications for people
with IDD as we continue to analyze the provision. Implementation of this
provision will likely require additional guidance from CMS. The bill also
provides $50 million in FY 2026 and $100 million in FY 2027 for
implementation.
Effective Date: July 1, 2028
Work Requirements
• The mandatory work requirements remain in the Senate bill. These
requirements are designed to terminate health care for 5.2 million
people. The Senate proposal eliminates exemptions for parents of kids
over 14 years of age (instead of all parents) – adding up to 300,000
more people harmed by work requirements.
• New applicants for Medicaid must meet work requirements at the
time of application, and states can look back up to 3 months prior.
• The Secretary of Health and Human Services can exempt states from
compliance until as late as 2028 if the state is demonstrating a “good
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faith effort”, leaving work requirements programs largely at the
discretion of the Secretary.
• States must require “able-bodied” adults aged 19–64 to work or do
approved activities for at least 80 hours a month to qualify for
Medicaid. Despite claims to the contrary, many individuals harmed by
work requirements will be people with disabilities and older adults
between the ages of 50 and 65. Many will be people who are already
working, including direct support professionals and home care
workers, or people caregiving for people with disabilities.
• Exemptions include individuals who are “medically frail” or otherwise
have special medical needs (as defined by the Secretary), including
individuals with intellectual or developmental disabilities. Also
exempted are individuals during months in which they are served in an
intermediate care facility for individuals with intellectual disabilities.
• We also know from past experience that people with intellectual and
developmental disabilities can get caught up in red tape and the
burden imposed on states to administer these requirements. Many
family caregivers who receive Medicaid will be subject to work
requirements, making it difficult for them to balance work and
caregiving.
• A recent analysis of the enrollees in the Medicaid expansion affected
by the new work requirements demonstrates that the vast majority of
working-age adults (aged 18-64) are either working, caring for family
members, or exempt because of health issues.
• Specifies seasonal workers meet requirements if average monthly
income meets specified standard.
• Requires states to use data matching “where possible” to verify
whether an individual meets the requirement or qualifies for an
exemption (House bill only requires data matching “where possible”
for verifying meeting work requirements).
• Provides funding to states for FY 2026 up to $200 million and HHS
implementation funding for FY 2026 to $200 million.
• This provision would now take effect sooner (December 31, 2026
instead of 2029) or earlier at state option, increasing coverage losses
and adding stress to state systems because of the rushed start. The
amended bill mandates guidance for states by December 31, 2025.
• The bill eliminates the discretion of future administrations to waive
work requirements for various populations.
Effective Date: December 31, 2026
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Retroactive coverage
• States currently have to provide coverage for qualified expenses up to
90 days prior to application. This will be limited to one month for
expansion enrollees and two months for traditional enrollees.
Effective Date: January 1, 2027
Cost sharing
• The bill allows states to apply cost-sharing to some Medicaid
expansion enrollees and will impact people with disabilities who are
enrolled in Medicaid expansion in significant numbers.
• The Senate-passed bill is the same as House-passed bill, except that it
exempts services provided by federally qualified health centers,
behavioral health clinics, and rural health clinics. It also provides $15
million in implementation funding for FY 2026.
• Imposing cost-sharing on enrollees earning near the poverty level
creates significant hardships for individuals struggling to afford basic
health care. This proposal is particularly punitive, allowing states to
charge over $1,000 annually for those earning just 138% of the federal
poverty level, making essential care unaffordable for low-income
individuals. Even minimal cost-sharing reduces access to medical
services, causing enrollees to delay critical treatments and
prescriptions.
Effective Date: October 1, 2028
Eligibility determinations
• Requires states to conduct costly eligibility redeterminations at least
every 6 months for Medicaid expansion adults.
• The Senate added that the Secretary must issue guidance on
determinations within 180 days.
• People lose coverage when they miss notifications, steps in the
process, or just don’t know that they are up for review. This provision
will create gaps in coverage for qualified people and changes the rules
that currently require review once a year.
• Senate bill Provides $75 million in implementation funding for FY
2026.
Effective Date: October 1, 2027
State funded coverage of undocumented immigrants
• The Senate-passed bill restricts the definition of qualified immigrants
for purposes of Medicaid or CHIP eligibility.
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• The new bill provides $15 million in implementation funding for FY
2026.
• Reduces the expansion match rate from 90% to 80% for states that
use their own funds to provide health coverage or financial assistance
to purchase health coverage for individuals who are not lawfully
residing in the United States. The Senate also lowered the federal
match for states providing emergency Medicaid to people who do not
qualify for Medicaid due to their immigration status, and limited the
ability of lawfully-residing immigrants to qualify in the first place.
• People with disabilities and families that live in states that choose to
use their own funds to in this manner will have fewer resources in the
overall system for their care and services, which could lead to states
reducing home and community-based services. In addition, many
direct service providers are immigrants. This could exacerbate the
current severe shortage of direct support professionals.
Effective Date: October 1, 2026
Eligibility and Enrollment Final Rule
• The Senate-passed bill is the same as House-passed bill but also
requires the Secretary to issue guidance within 180 days of
enactment.
• Prohibits the Secretary from implementing, administering, or
enforcing nearly all provisions in both rules until October 1, 2034.
• These two Rules finalized during the previous administration
collectively reduce barriers to enrollment and modernize renewal
policies in the Medicaid, CHIP program, and for individuals dually
eligible for Medicaid and Medicare.
Effective Date: For renewals scheduled on or after December 31, 2026
Provider taxes
• Prohibits states from establishing any new provider taxes or from
increasing the rates of existing taxes. This is an effective cut year over
year. This does not allow for states to modify their provider taxes to
best address their state’s needs, nor does it keep up with inflation.
This cost shift to states over time will mean that states may need to
restrict eligibility, cut provider payments, or reduce benefits to
maintain their programs. This is similar to what states would face if
the federal government had made a change to the federal match rate
or instituted a per capita cap with a fixed growth rate.
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• The Senate bill proposed even greater restrictions on expansion states
by reducing the safer harbor limit starting in 2028 from 6% by 0.5%
annually until it reaches a 3.5% limit in 2032.
• The new limit applies to taxes on all providers except nursing facilities
and intermediate care facilities. New limit also applies to local
government taxes in expansion states.
• Provides $20 million in implementation funding for FY 2026.
• Revises the conditions under which states may receive a waiver of the
requirement that taxes be broad-based and uniform such that some
currently permissible taxes, such as those on managed care plans, will
not be permissible in future years. Provision overlaps with a proposed
rule released May 12, 2025.
• Adds a temporary fund of $50 billion to help rural hospitals. The
Senate fund gives the Health and Human Services secretary significant
discretion in how the funds would be allocated.
• The Center for Medicare and Medicaid Services (CMS) are given
tremendous discretion on how to implement these provisions.
State Directed Payments
• Directs HHS to revise state directed payment regulations to cap the
total payment rate for inpatient hospital and nursing facility services
at 100% of the total published Medicare payment rate for states that
have adopted the Medicaid expansion and at 110% of the total
published Medicare payment rate for states that have not adopted the
expansion.
Effective Date: Upon enactment
Effective Date: Upon enactment, but states may have at most 3 fiscal years to
transition existing arrangements that are no longer permissible.
Supplemental Nutrition Assistance Program
The Senate-passed bill continues massive cuts to the SNAP program, cutting
nearly $200 billion from the program, shifting costs to states, and
incorporating harsher work reporting requirements.
• The Senate reconciliation bill would dramatically raise costs and
reduce food assistance for millions of people by cutting federal
funding for the Supplemental Nutrition Assistance Program (SNAP) by
$186 billion through 2034, according to the Congressional Budget
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Office (CBO), about 20 percent — the largest cut to SNAP in history.
These cuts would increase poverty, food insecurity, and hunger,
including among children.
• Cuts to SNAP would affect all of the more than 40 million people who
receive basic food assistance through SNAP, including some 16 million
children, 8 million seniors, and 4 million non-elderly adults with
disabilities, all of whom would be affected by the cuts in the bill.
• The Senate bill includes a major structural change that would cut
billions in federal funding for most states’ basic food benefits and then
require those states to backfill for the federal cut.
• Most states would be required to pay 5 to 15 percent of food benefits.
If a state can’t make up for these massive federal cuts with tax
increases or spending cuts elsewhere in its budget, it would have to
cut its SNAP program (such as by restricting eligibility or making it
harder for people to enroll) or it could opt out of the program
altogether, terminating food assistance entirely in the state.
• In contrast to the House version of the bill, the Senate’s proposal
allows some states to avoid footing the bill for SNAP if they get their
payment error rates below 6 percent by fiscal year 2028. However,
this 0 percent match is not a guarantee — even a slight increase in
error rates could trigger new financial obligations. States with higher
error rates would be required to pay more in SNAP costs. This will
significantly increase states’ financial responsibility and alter the
current federal-state structure, where the federal government pays
100 percent of SNAP food benefits.
o the bill will delay a provision shifting SNAP costs to states for
the first time, but only for states with sufficiently high
“payment error rates.” This will likely apply to Alaska, DC,
Florida, Georgia, Maryland, Massachusetts, New Jersey, New
Mexico, New York, and Oregon.
State data can be found here.
• Work Requirements: More than 5 million people — about 1 in 8 SNAP
participants — including 800,000 children and over half a million
adults who are aged 65 or older or have a disability, live in a
household that would be at risk of losing at least some of their food
assistance because someone in their household is subject to the
significant expansion of SNAP’s work requirement under the Senate
proposal.
• Under current SNAP rules, most non-elderly, non-disabled adults
without children in their homes can’t receive benefits for more than
three months out of every three years if they don’t document they are
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working at least 20 hours per week or prove they qualify for an
exemption. The new bill would expand this restriction to older adults
aged 55-64 and to parents with children over the age of 6, while also
significantly limiting waivers for areas with poor economic conditions.
o CBO has indicated that more than 2 million people in total
would be cut from SNAP under the provision in a typical
month, including 1.1 million people who live where jobs are
scarce; 900,000 adults aged 55-64; 270,000 veterans, people
experiencing homelessness, and former foster youth; and
hundreds of thousands of parents of children. Expanding the
work requirement would cut SNAP by about $69 billion
through 2034, CBO estimates.
o Under current SNAP rules, most non-elderly, non-disabled
adults without children in their homes can’t receive benefits
for more than three months out of every three years if they
don’t document they are working at least 20 hours per week or
prove they qualify for an exemption. The Senate proposal
would expand this restriction to older adults aged 55-64 and to
parents whose youngest child is at least 14 years old, while
also significantly limiting waivers for areas with poor economic
conditions. The earlier version of the Senate plan applied to
adults in households with children as young as 10.
(See state data on the number of people at risk here.)
Creation of a federal school voucher program
• The bill creates a new income tax credit for charitable contributions
made to scholarship granting organizations (SGOs), that provide
scholarships to students to attend private schools.
• Currently, 29 states and the District of Columbia have at least one
private school choice program. 15 of these states have at least one
program that is universally accessible to all K-12 students in the state.
This would be the very first ever federal voucher program.
• The Senate-passed bill amended the text to appease concerns from
the parliamentarian.
• The tax credit in the Senate-passed bill is significantly lower (up to
$1700 rather than $5000 or 10% of adjusted gross income) and it is
only in states that authorize SGOs; many states may not.
• No overall cap on total amount of donations (most recent version was
$4 billion per year); therefore, if this policy changes becomes popular
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(i.e. lots of people donate and claim the credit), it could be far more
expensive than anticipated and have an (indirect) impact on federal
education spending writ large. The unofficial price tag is $26 billion.
• The Senate also added a permit to issue regulations and guidance.
• The House-passed version of this voucher program included language
that attempted to protect students with disabilities from
discrimination in admission to private schools. The Senate version
removed this language.
• Since the money flows to an SGO before going to the private school, it
is not considered federal money. This means the schools do not need
to abide by the same civil rights laws (including IDEA, Section 504, and….more.
