New Issue Brief: H.R. 1’s Medicaid Changes: A Threat to Health Equity for Chronic Disease Patients

07 Aug New Issue Brief: H.R. 1’s Medicaid Changes: A Threat to Health Equity for Chronic Disease Patients

The Health Equity Collaborative (HEC) is deeply concerned about the implications of H.R. 1, signed into law on July 4, 2025, which introduces significant changes to Medicaid that could jeopardize healthcare access for millions, particularly those with chronic conditions like mental health disorders, diabetes, and cardiovascular disease. Our new issue brief, supported by Magnolia Market Access, highlights how these policy shifts—work requirements, funding cuts, and reduced state flexibility—could exacerbate health disparities among vulnerable populations.

Key Impacts of H.R. 1 on Medicaid Enrollees

Medicaid serves as a lifeline for approximately 80 million Americans, including 48 million children, providing essential healthcare coverage to low-income individuals and families. However, H.R. 1’s provisions threaten to disrupt this critical program, particularly for enrollees with chronic conditions in three key areas:

1. 1. Work Requirements Disproportionately Harm Employed and Unemployed Enrollees
      H.R. 1 introduces federal work requirements for Medicaid expansion enrollees aged 19–64 without children under 14, mandating at least 80 hours per month of paid work, job training, education, or community service. This policy is projected to save $325 billion over 10 years by reducing enrollment, but at a significant human cost:

• • Employed Enrollees: Approximately 25% of employed Medicaid enrollees with mental health, diabetes, or cardiovascular conditions risk losing coverage due to the administrative burden of documenting compliance. Many work in small companies not required to offer health benefits under the Affordable Care Act (ACA), and their low wages (often near or below the Federal Poverty Level) leave them with few alternatives.
  • Unemployed Enrollees: An estimated 1.1 million unemployed enrollees (non-disabled, not in school, and without young children) with these conditions could lose coverage. The impact varies by region, with mental health patients in the Northeast and diabetes/cardiovascular patients in the South and West facing the greatest risk.

1. 2. Potential Reversal of Medicaid Expansion
      While H.R. 1 does not directly alter the ACA’s Medicaid expansion, it introduces financial pressures that may force states to scale back or eliminate these programs. Key changes include reducing the federal matching rate for undocumented immigrants from 90% to 80% and removing state funding flexibilities, contributing to $564 billion in projected savings over 10 years. If states discontinue expansion:

• • Over 5 million mental health patients could lose coverage, with 4.2 million in the South alone at risk.
  • Diabetes patients face the least impact, but 3.8 million could still lose coverage nationwide.
  • Childless adults are particularly vulnerable, as states cannot adjust income eligibility under the ACA’s 138% FPL threshold.

1. 3. Federal Funding Cuts Hit Cardiovascular Patients Hardest
      H.R. 1’s federal funding reductions and loss of state funding flexibility will force states to make tough budgetary decisions, likely leading to coverage losses. The brief analyzes scenarios with 10% and 20% federal cuts, with states offsetting 25% or 50% of the shortfall:

• • Cardiovascular patients are the most affected across all scenarios, with up to 1.6 million potentially losing coverage in the worst-case scenario (20% federal cut, 25% state makeup).
  • Mental health and diabetes patients also face significant risks, with over 1 million each potentially losing coverage in severe funding cut scenarios.
  • Regional disparities persist, with the South bearing the brunt due to higher enrollment and limited state resources.

The Broader Implications for Health Equity

These changes threaten to undo progress made through Medicaid expansion, which has improved health outcomes for low-income populations. For example, studies show that expansion enrollees, initially in worse health, achieved care costs comparable to other Medicaid enrollees within four years. However, H.R. 1’s policies could increase the number of uninsured individuals, delay critical care, and drive-up emergency room and hospital use, particularly among chronically ill patients. This not only undermines patient health but also risks job losses as untreated conditions worsen.

At HEC, we believe that protecting federal healthcare programs like Medicaid is essential for ensuring the well-being of vulnerable populations. The potential loss of coverage for millions with chronic conditions directly contradicts our mission to eliminate health disparities through holistic, intersectional approaches to healthcare.