Federal: "One Big Beautiful Bill Act" (OBBBA)

As you know, the federal government passed the "One Big Beautiful Bill Act." This legislation includes a federal spending cut on Medicaid estimated at $990 billion to $1.02 trillion over the next 10 years. This federal action is now putting new financial pressure on state-level budgets.

State-Level Impact: Idaho

For Idaho, we have seen a 7% cut in Medicaid (public pay) provider rates. This cut was implemented by the state in two parts (3% on July 1 and 4% on Sept. 1) to address a projected $80 million state budget shortfall.

State-Level Impact: North Carolina

This is not isolated to Idaho. North Carolina just implemented its own significant rate cuts on October 1, 2025, also to address a state budget gap.

• Their cuts are tiered by provider, with a 3% minimum cut.

• Primary care providers face an 8% cut.

• Specialty doctors, hospitals, and nursing facilities face a 10% cut.

Other States to Watch

We should also keep a close eye on other states, as many are already taking action:

• Colorado: Is implementing targeted cuts to provider rates, including dental, to address its own major state budget shortfall.

• Michigan: Is currently navigating a 20% budget reduction for its Health Department. While they passed a budget to "protect" core Medicaid, they are achieving savings by cutting coverage for things like GLP-1 weight-loss drugs.

• Washington: Is projecting a loss of billions in federal funding and is facing new federal rules that will reduce payments to hospitals and nursing facilities starting in 2028.

• Ohio, Maryland, & Virginia: All three are projecting massive, multi-billion dollar federal funding losses over the next decade due to the OBBBA, making provider cuts a very high probability.

• Pennsylvania: Is also in the middle of tense budget debates where Medicaid spending is a primary focus.

The Good News (from the Federal Bill)

For tax years 2025-2028, a provision in the new federal bill gives seniors (65 years+) a new $6,000 deduction on their federal taxes, and a $12,000 deduction if filing jointly.

Takeaway for Underwriters

For underwriters, please be alert to what is going on in your state. The actions in Idaho and North Carolina are likely a preview of changes we may see in other states as they are forced to make up for these budget gaps.