One Big Beautiful Bill Act's $1 trillion Medicaid cuts take effect through 2034
The law, signed by President Trump on July 4, 2025, also tightens SNAP eligibility and starts Medicaid work requirements in January 2027
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The One Big Beautiful Bill Act cuts about $1 trillion from Medicaid through 2034 and tightens eligibility for federal safety-net programs, with millions expected to lose SNAP benefits. Medicaid work requirements under the law begin in January 2027. The legislation also includes tax breaks on tips, overtime pay and a deduction for seniors.
The bill passed the Senate on July 1, 2025 by a 51-50 vote, with Vice President JD Vance breaking a tie after three Republicans joined Democrats in opposition, according to the American Academy of Otolaryngic Allergy. The House approved the final version on July 3, 2025 by 218-214, with two Republicans voting no alongside all Democrats, the American Hospital Association reported. Trump signed the bill, formally H.R. 1 and Public Law 119-21, into law on July 4, 2025, the American Medical Association said.
The Congressional Budget Office projects the law will add $3.3 trillion to the national deficit over the next decade, according to GovFacts. The bill also raises the debt ceiling by $5 trillion, and CBO estimates cited by HIMSS put the law's total addition to federal deficits at $3.4 trillion over 10 years. The Center for American Progress found the roughly $1 trillion in Medicaid cuts are similar in size to about $1 trillion in tax cuts that benefit the top 1% of earners.
The Medicaid cuts and new work requirements amount to a structural tightening of federal spending, even as the administration has separately pushed for costly measures such as universal $5,000 checks and additional tax breaks. That contrast leaves open questions of whether Congress will authorize those payments and how the Treasury manages the resulting fiscal math, a question likely to keep drawing attention from investors watching federal spending and deficits.