KBRA releases research examining the additional challenges states face in implementing Medicaid provisions of the One Big Beautiful Bill Act (OBBBA). Earlier this year, KBRA highlighted several significant programmatic challenges stemming from the law, including reduced federal funding, restrictions on states’ ability to increase their share of funding, and additional administrative costs. Building on that analysis, this report focuses on the extensive administrative requirements of OBBBA, which are likely to create further challenges for states, particularly given the less than 18-month period between the law’s enactment in July 2025 and its implementation deadline in January 2027.

Key Takeaways

• With less than 18 months from the law’s July 2025 enactment to the January 2027 implementation deadline, OBBBA’s Medicaid eligibility changes present states with two distinct but related administrative challenges involving technology and staffing.
• While federal funding is available to help offset implementation costs, states differ in their technological capabilities, staffing resources, and administrative capacity, with particular challenges around enforcement of revised eligibility and work requirements.
• The key concern is not the absence of federal support, but whether that support will adequately offset state costs and whether states have the operational capacity to implement the requirements.
• While individual states’ ability to address these challenges will vary with uncertain credit implications over the medium term, maintaining existing Medicaid operations will be an important test of readiness as implementation deadlines approach.

Click here to view the report.

Recent Publication

• States Face a Heavy Lift From OBBBA’s Medicaid Rules

About KBRA

KBRA, one of the major credit rating agencies, is registered in the US, EU, UK, and Japan. KBRA is recognized as a Qualified Rating Agency in Taiwan and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1017878

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