Understanding the impact of the One Big Beautiful Bill Act (OBBBA) on pediatric providers and Medicaid

The newly passed One Big Beautiful Bill Act (OBBBA) aims to reform Medicaid for adults, but it also brings potential challenges for children’s healthcare coverage. The new provisions regarding work requirements for parents may have some unintended impacts on pediatric Medicaid coverage. It’s important to stay informed about these changes so you can continue providing consistent, quality care to the families you support. 

In this blog post, I’ll break down how OBBBA’s new rules might affect children’s insurance, the scope of the issue, and what it means for your practice. While there are challenges to navigate, my goal, as always, is to equip you with the knowledge and resources you need to confidently support your clients and their families through these changes. Together, we can ensure the best outcomes for the children in your care. 

OBBBA: A quick overview 

The One Big Beautiful Bill Act, or OBBBA, became law on July 4, 2025. This legislation introduces major changes to the Medicaid program that may indirectly impact the children you serve. 

The new law doesn’t target children directly, but it creates a system where they can easily fall through the cracks. The primary risk is that when a parent loses their Medicaid, their child often does too, even if the child is still technically eligible. 

Among many other changes, OBBBA establishes a national work requirement for many Medicaid enrollees. This applies to adults in the Affordable Care Act (ACA) expansion group and, critically, to low-income parents of children over the age of 14. These parents must now complete and document 80 hours of work activities each month to maintain their coverage. 

The following provisions have significant consequences for pediatric care: 

• Strict monthly reporting: Parents must prove they are meeting the work requirements every single month; you may need to help your clients navigate this new challenge. 

• Reduced retroactive eligibility: The window to retroactively cover care has been slashed to just 30 days, making it harder to fix coverage gaps after they occur. 

• Funding cuts: Enhanced federal funding for Medicaid expansion states will be eliminated after 2026, putting more financial pressure on state programs. 

• Centralized oversight: A new federal eligibility hub managed by CMS will tighten administrative control, which could lead to system-wide delays and errors. 

The mechanics of indirect child disenrollment 

The parental disenrollment cascade 

Think of the families in your practice. Many parents who now have to meet work requirements may struggle with fluctuating work hours, childcare challenges, or transportation issues. Under OBBBA, a single missed monthly report can trigger a disenrollment process. 

The new rules create a tight timeline. Parents often have a short 10-day window to fix any reporting issues. If they miss that deadline, they may lose their coverage. Because a child’s coverage is often tied to their parent’s, the child is disenrolled right along with them. The reduced 30-day retroactive eligibility period makes it much harder to get that coverage back and pay for services you’ve already delivered. 

The SNAP-Medicaid connection 

The situation is made more complex by changes to the Supplemental Nutrition Assistance Program (SNAP). OBBBA extends similar work requirements to parents of children aged 14 and older who receive SNAP benefits. 

In many states, Medicaid and SNAP eligibility are linked. When a parent loses SNAP benefits for failing to meet the new work rules, their Medicaid coverage can be automatically terminated. This “co-termination” creates a second pathway for both parents and children to lose health insurance, compounding the risk. 

IT and administrative challenges 

States are now responsible for tracking and verifying work hours for millions of people. This requires massive upgrades to outdated IT systems, and the increased costs will strain state budgets. History shows us that these situations lead to errors. 

During the recent Medicaid unwinding period, procedural terminations—people losing coverage due to paperwork issues, not ineligibility—were alarmingly high. OBBBA is poised to recreate this administrative chaos on a national scale, and children will inevitably be caught in the crossfire. 

How many children are at risk? 

Early projections from the strategic policy intelligence program, Child Welfare Wonk, estimate that “up to 68,000 children could lose Medicaid because their parents lose coverage as a result of the work requirements.” However, this isn’t just about numbers; it’s about the specific children who will be most affected. Those with chronic conditions like asthma, diabetes, or significant behavioral health needs are especially vulnerable. A gap in coverage for them means a gap in access to essential medications, therapies, and specialist appointments. 

The impact will not be felt evenly across the country. States with the largest Medicaid populations, such as California, New York, Florida, and Texas, are expected to see the highest numbers of children losing coverage. 

Health equity flashpoints 

It’s likely the OBBBA’s impact will disproportionately fall on the shoulders of the most vulnerable families and communities:

• Children with chronic or behavioral health needs: These clients rely on consistent coverage for monthly medications, therapies, and check-ups. Any gap can derail progress and lead to negative health outcomes. 

• Transgender and LGBTQ+ youth: The law contains provisions that directly target access to care for this community. Starting in 2027, OBBBA will prohibit federal Medicaid and CHIP funds from being used for gender-affirming care. It also changes the definition of “essential health benefits” to exclude these services, allowing insurers to deny coverage. This will create devastating barriers for transgender youth, especially those from low-income families who rely on Medicaid. 

• Immigrant families: Families with language barriers or mixed immigration statuses already face challenges navigating complex public benefit systems. They are at a much higher risk of procedural termination due to difficulties understanding and meeting the new reporting requirements. 

What this means for your practice 

These changes will create significant financial and operational challenges for pediatric practices, especially those that rely heavily on Medicaid. 

Revenue compression and uncompensated care 

For many children’s hospitals and community-based pediatric practices, Medicaid and CHIP account for more than half of all revenue. Studies show that Medicaid enrollment and expansion is linked to revenue gains and stability for providers, and even a small drop in pediatric Medicaid enrollment can have a significant financial impact. This translates directly to more uncompensated care you are forced to provide and absorb, squeezing your practice’s financial stability. 

Increased administrative overhead 

You or your front-office staff will be on the front lines of this new reality. You’ll need to perform more frequent, likely real-time, eligibility checks to avoid providing services that won’t be reimbursed. This adds to your team’s workload and your operational costs. 

While larger health systems may invest in automation to manage this, smaller practices may be forced to hire additional administrative staff just to keep up with the paperwork, further straining already tight budgets. 

Clinical disruptions 

The most significant consequence is the disruption to client care. When a child’s coverage is interrupted, so is their treatment. This is particularly damaging for children with chronic conditions who depend on consistent care to manage their health. 

A missed month of therapy or a gap in medication refills can lead to developmental setbacks or health crises, resulting in more emergency room visits and higher downstream costs for the entire healthcare system. For clinicians in rural areas, these challenges are magnified by existing barriers like hospital closures and limited access to specialists. 

Looking ahead 

The One Big Beautiful Bill Act introduces a landscape of uncertainty and risk for pediatric practices and the children you serve. Understanding these new rules is the first step toward preparing for the changes ahead. As a clinician, your voice is crucial in advocating for policies that protect children’s access to care. 

Stay informed about implementation in your state, strengthen your practice’s eligibility verification processes, and connect with local advocacy groups. By working together, we can help mitigate the unintended consequences of this law and ensure that every child has the opportunity to lead a healthy life. 

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