Where We Stand with H.R.1 After Q1 2026
The news cycle of H.R.1—also known as the OBBBA—is soooo last summer at this point.
But the ripple effects? Very much 2026’s reality.
As the earliest provisions begin to take shape, we’re keeping a close eye on what’s actually changing—so you can stay prepared for the potential coverage loss, funding shifts, and operational pressure still ahead.
This update focuses on what has actually happened since January 1, 2026, and what you should watch out for next.
If you missed our last update, go back and check out our 2025 year-end wrap-up and our more recent breakdown on how you can prepare for the next decade.
What Changed January 1
The first wave of H.R.1 provisions took effect at the start of this year. Here’s what we know.
Federal Medicaid Funding Shifted
The enhanced Federal Medical Assistance Percentage (FMAP) increase expired for states that had not yet fully used their Medicaid expansion funds.
The American Rescue Plan temporarily increased the FMAP for states that expanded Medicaid programs after February 2021. States received a five percentage-point increase in their traditional Medicaid FMAP.
H.R.1 sunsetted that enhancement, as of January 1, 2026—marking the first step in a longer-term reduction in federal Medicaid support.
Medicare Rates Increased Slightly
The Medicare Physician Fee Schedule conversion factor increased by 2.5%.
After years of pay cuts, the increase is a win on paper—but for many organizations, it is unlikely to fully offset rising costs or broader reimbursement and coverage shifts already underway.
Marketplace Eligibility Tightened
Several eligibility changes are now in place:
- Certain noncitizens are no longer eligible for premium tax credits. The Affordable Care Act (ACA) previously granted tax credits to make health insurance premiums more affordable for lawfully present immigrants who were ineligible for Medicaid. The Congressional Budget Office (CBO) estimates that 300,000 lawfully present immigrants will lose the benefit, leading to thousands of families who will no longer be able to afford medical coverage.
- Individuals deemed eligible for Medicaid are no longer eligible for premium tax credits when enrolling in Marketplace plans. The change tied to Medicaid eligibility reinforces a stricter separation between Medicaid and Marketplace coverage—meaning individuals who become eligible for Medicaid, even temporarily, may lose access to subsidized Marketplace options.
- Marketplace consumers are now required to repay the full amount of any excess premium tax credits paid on their behalf. The repayment requirement removes prior caps on how much individuals may owe back, increasing financial exposure when income or eligibility changes during the year.
Unfortunately, these changes tighten the rules and make it easier for people to fall through the cracks during coverage transitions. This will likely result in higher rates of uncompensated care for your organization.
High-Deductible Plan Rules Expanded
Bronze and catastrophic plans now qualify as high-deductible health plans (HDHPs) for HSA contributions.
These plans are now considered HSA-compatible, regardless of whether they meet the technical definition of an HDHP.
Individuals with HDHPs can now access direct primary care services.
Certain direct primary care (DPC) service arrangements now allow individuals to contribute to a Health Savings Account (HSA) and use their HSA funds to pay DPC fees.
These changes may expand consumer options—but for healthcare organizations, they introduce new variables to track across eligibility, billing, and patient coverage.
What We’re Hearing
While the most significant provisions are still ahead, the National Council for Mental Wellbeing conducted a survey to get a grasp on how behavioral health and SUD organizations are facing current challenges and preparing for the effects of H.R.1.
The results give us a better idea of where orgs like yours stand in all of this and how you can start preparing for the most impactful provisions of the bill.
At the same time, we’re keeping an eye on the Medicaid scrutiny happening at the state level and how it might affect how you serve your communities moving forward.
A System Already at Its Breaking Point
As we’re all well aware, these new policy changes are landing on top of a system that’s already strained.
According to the National Council’s survey results:
- More than 50% of organizations report ongoing waitlists, with some turning patients away due to capacity limits;
- 43% report higher patient acuity and a need for higher levels of care or emergency services;
- 36% said they’ve had to reduce staff in the past year, including both clinical and administrative roles; and
- 22% report that over 20% of services provided are uncompensated.
These responses came before most H.R.1 provisions took effect, highlighting that organizations are already facing challenges in:
- Uncompensated care,
- Limited capacity and access to care,
- Workforce shortages, and
- Increased clinical complexity.
With staffing shortages and tightening margins, teams are stretched thin—and H.R.1 only amplifies these issues. If organizations don’t start thinking about how to create more efficiencies and better support their teams, these challenges may become too heavy to carry.
More Complexity at Enrollment and Renewal
Medicaid eligibility is already a tedious process that adds extreme administrative burden on community-based care organizations.
In fact, 33% of organizations report spending at least 100 hours per month on Medicaid eligibility paperwork, with some reporting over 1,000 hours of total staff time.
And that’s before changes to Medicaid redeterminations and work requirements even take effect.
The shift to six-month redetermination cycles on December 31, 2026, and tighter work requirements on January 1, 2027, will result in even more admin burden for the teams who support Medicaid enrollees.
Increased Scrutiny on Medicaid Program Integrity
Alongside policy changes, there has been a noticeable uptick in federal and state attention on Medicaid fraud, waste, and abuse (FWA).
Early 2026 has seen expanded audits and investigations tied to Medicaid eligibility, billing, and enrollment practices. These efforts are aligned with broader H.R.1 priorities to reduce federal spending and tighten oversight.
For community-based care organizations, it introduces an additional layer of operational pressure:
- Greater scrutiny on documentation and billing accuracy; and
- Heightened compliance expectations across clinical and administrative workflows.
While not a formal provision with a single effective date, these enforcement activities are an early sign that tighter policy restrictions are starting to show up in real ways.
Stay tuned for more updates on what’s happening across state lines. We’ll be publishing a dedicated CMS News Tracker soon. 👀
What’s Next on the 2026 H.R.1 Timeline
As we’ve mentioned before, the key provisions from the bill are rolling out over the next decade, so there is a lot yet to come. But here is what you can expect in the next few months.
June 1: Work Requirements Deadline
On June 1, 2026, the U.S. Department of Health and Human Services (HHS) will issue an interim final rule with implementation guidance on new Medicaid work requirements.
The guidance should clarify the parameters for reporting, enforcement, and exemptions, setting the stage for state-level implementation by January 1, 2027 (unless an extension is approved).
July 4: Medicare Eligibility Verification Review Deadline
On July 4, 2026, the Social Security Administration must complete citizenship and immigration status reviews for Medicare enrollees.
This will likely result in coverage terminations or increased eligibility verification activity.
For more implementation resources, check out the National Council for Mental Wellbeing’s H.R.1 Hub.
Where This Leaves You
We’ve moved past the headlines and the speculation about what H.R.1 might mean.
Now, with the first quarter of 2026 in the books, we’re “in it.” Implementation is underway, and the impact is starting to show up in real ways across coverage, funding, and operations.
The question is no longer what’s coming, but how to respond.
Based on early data and upcoming implementation milestones, community-based care organizations should be focused on:
- Protecting access to care, as coverage becomes less stable;
- Reducing administrative burdens amidst changes in eligibility, documentation requirements, and reporting demands;
- Supporting your workforce with tools and resources that will reduce the added pressure; and
- Simplifying compliance for patients and staff to help prevent coverage loss and care disruption.
If you’re thinking about how to navigate H.R.1 with more clarity, we’re here to help.
The Eleos platform reduces documentation burden, streamlines compliance, and surfaces eligibility risks in real time. So you can stay ahead of coverage changes—before they turn into gaps in care or revenue.
Schedule a demo to see how Eleos can help you reduce administrative complexity and proactively manage eligibility risk in a shifting policy environment.
