What the Big Beautiful Bill Means for Value-Based Care
By: Andrew Mackenzie, Chief Science Officer at Arbital Health
The recently passed One Big Beautiful Bill Act (BBB) introduces a wide array of regulatory changes that will shape healthcare for years to come. It brings particularly important implications for value-based care (VBC) stakeholders. From new rules for Medicaid and Marketplace plans to expanded Health Savings Account (HSA) eligibility and a substantial new investment in rural health, this bill touches almost every corner of the healthcare landscape. | ![]() |
Even if your organization doesn’t take much Medicaid risk today, these reforms could still impact your VBC contracts—and we’re here to help you adjust confidently.
Let’s break this down.
Key Impacts You Should Know
Medicaid: Big Adjustments Ahead
- The BBB Act makes several changes that will reduce enrollment in Medicaid, the Children's Health Insurance Program (CHIP), and the Basic Health Program (BHP) by:
- Rescinding enrollment simplification measures into these programs that were introduced mid-2024 (Sec 71102)
- Increasing eligibility redetermination frequency starting in 2027 (Sec 71107)
- Narrowing federal Medicaid funding based on residency (Sec 71109)
- Ending enhanced federal matching (enacted under the Affordable Care Act (ACA) for states that don’t expand Medicaid by the end of 2025) (Sec 71114)
- Adding work requirements for childless adults in Medicaid expansion states under the ACA (80 hours/month of work or community engagement) (Sec 71119)
- Budget neutrality (Sec 71118)
- Prohibiting CMS from approving Medicaid demonstration projects (including renewals) unless the CMS Chief Actuary certifies the project will not increase total federal spending on Medicaid (starting in 2027) (Sec 71118)
- Mandating new cost-sharing requirements for expansion states (up to $35 per service, effective October 2028, with exceptions for primary care) (Sec 71120)
Commercial & ACA Marketplace Plans: Tighter Rules, Expanded Tools
- On the commercial side, BBB introduces a mix of restrictions and expanded consumer options:
- Expand HSA access to all Bronze and Catastrophic Exchange plans starting in 2026 (Sec 71307)
- Allow HSA funds to pay for Direct Primary Care (DPC) arrangements (Sec 71308)
- Require annual re-verification of eligibility for Exchange subsidies instead of automatic re-enrollment (Sec 71303)
- Require individuals to pay full premiums while awaiting verification for subsidies (Sec 71304)
- Eliminate premium tax credits for certain lawfully present immigrants (e.g. DACA recipients and refugees) (Sec 71301)
- Make Telehealth services no longer subject to deductibles (Sec 71306)
Medicare: Changes to Eligibility and Payment Rates
- Medicare updates in BBB include:
- Verification of lawful presence in the United States in order to receive Medicare payments (Sec 71201)
- 2.5% increase to the physician fee schedule in 2026 (Sec 71202)
- Broadened orphan drug exemptions starting in 2028 to include drugs that target multiple conditions, not just single conditions.
- Extended duration for which a drug holds its orphan designation status for Medicare price negotiation (Sec 71203)
- Reduction in Medicare Savings Program enrollment compared to 2023-2024 (reducing the number of members receiving low-income cost sharing payments for Medicare) (Sec 71101)
Rural Health: A New Opportunity
- BBB also creates the Rural Health Transformation Program,allocating $10B annually (Sec 71401), which can be used to support:
- Evidence-based, measurable interventions to improve prevention and chronic disease management
- Consumer-facing, technology-driven solutions to improve prevention and chronic disease management
- Training and technical assistance for rural hospitals in adopting innovations like AI, remote monitoring, robotics, and other advanced technologies
- Development of innovative care models, including VBC arrangements and alternative payment models
Implications
These rule changes will likely result in large reductions in Medicaid enrollment as well as Commercial exchange enrollment. According to the Congressional Budget Office, these changes will result in roughly 11 million additional uninsured individuals by 2034. This represents a ~10% reduction in membership in both Medicaid and Commercial Exchange enrollment.
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For organizations taking Medicaid or Commercial Exchange risk, these membership changes translate into fewer covered lives, changing risk pools, and financial implications that will require thoughtful repricing and contract design for VBC arrangements to handle changes in risk profile. Outside of direct membership loss, uninsured individuals can still receive treatment from emergency rooms and hospitals. If they lack access to appropriate preventative care, this can spiral into large avoidable events like ER visits for untreated diabetes, CHF, or CKD among many others. These costs could cascade into the commercial market as hospitals adjust their fee schedules, pushing up medical trend and impacting commercial VBC contracts. As such, we also encourage appropriate pricing and trend adjustments to be made in Commercial VBC deals as well. |
The expanded eligibility and use of HSAs—including coverage for Direct Primary Care (DPC) and the elimination of deductibles for telehealth—will likely give a strong boost to DPC initiatives, HSA administrators, and virtual care providers. DPC is inherently a form of value-based care, and this policy change is expected to drive significant growth and innovation in DPC-centered healthcare solutions. As adoption accelerates, particularly among self-insured employers and fully insured commercial markets, organizations will need new risk arrangements and updated pricing strategies to support this momentum.
The Rural Health Transformation Program creates significant new opportunities for rural providers to launch innovative VBC programs with support of Federal funding.
How Arbital Health Can Help You Adjust
We know navigating policy shifts like BBB can feel complex—but we’ve got you covered.
At Arbital Health, we help clients design, price, monitor, adjudicate, and optimize VBC contracts so you can stay ahead of these changes with confidence. Whether you’re a DPC provider, telehealth company, rural health system, specialist, payer, employer, or enabler in Medicare, Medicaid, or Commercial markets, our actuarial-powered platform and VBC expert advisory services can help ensure your contracts reflect the latest regulatory landscape. | ![]() |
Here’s how we help you thrive in this new environment:
- Contract design: We structure fair, sustainable agreements that reflect changing eligibility and enrollment trends
- Pricing adjustments: We optimize your pricing to reflect shifting risk pools and future medical trend
- Real-time monitoring: Our platform delivers actionable insights to help you course-correct and optimize performance
- Scalable support for DPC, telehealth, and rural VBC programs: We help you take advantage of the new opportunities the OBBBA creates
Our team of expert VBC actuaries and our actuarial-powered platform take care of the complexity—so you don’t have to. Let us help you design, price, and manage contracts that reflect this evolving landscape.
Reach out today to discuss how we can support your organization!
We’re ready to help you stay ahead.