By Dr. Ashley Garrett, PhD, LPC-S, RPT-S
If you or your child receives Medicaid, you may have heard about the federal budget law known as H.R. 1, also referred to as the One Big Beautiful Bill Act.
Like many large reconciliation bills, H.R. 1 addresses numerous areas of federal spending, including major changes to healthcare programs such as Medicaid, the Children’s Health Insurance Program (CHIP), Affordable Care Act (ACA) Marketplace coverage, and Medicare.
These changes will not happen all at once. Instead, they will be phased in over multiple years, with early coverage effects beginning in 2026 and increasing through 2027 and beyond.
The purpose of this article is not to create fear. It is to help Alabama families understand what is changing, how these changes could affect access to counseling and healthcare, and what steps you can take now to reduce the risk of coverage interruptions.
What Is H.R. 1?
On July 4, 2025, President Trump signed H.R. 1, commonly referred to as the One Big Beautiful Bill Act, into law.
The legislation is a sweeping federal budget reconciliation law that includes some of the largest cuts to federal Medicaid and CHIP spending in history, along with substantial reductions to ACA Marketplace subsidies and other health programs.
According to the Congressional Budget Office (CBO), as summarized by the Georgetown University Center for Children and Families, H.R. 1 is expected to cut gross federal Medicaid and CHIP spending by about $990 billion over ten years and reduce Marketplace spending by about $213 billion.
Taken together, CBO estimates that the reconciliation law’s Medicaid, CHIP, Marketplace, and Medicare provisions will increase the number of uninsured people by about 10 million in 2034 relative to its January 2025 baseline.
These figures reflect nationwide projections over several years, not immediate changes in 2026, but they explain why healthcare organizations across the country are urging families to prepare early for potential coverage disruptions.
Why Late 2026 Matters
H.R. 1 is structured so that many of its health coverage provisions phase in over time rather than taking effect on a single date.
CBO’s analysis shows that the law begins to increase the number of uninsured people as early as 2026, with an estimated 1.3 million more uninsured in 2026 and 5.2 million more uninsured in 2027 compared to the baseline.
Several policy changes contributing to these coverage losses involve:
- More frequent eligibility redeterminations for certain Medicaid populations.
- Mandatory work reporting requirements for adults in Medicaid expansion programs in states that have expanded.
- Delays in implementing federal rules that would have reduced “red tape” in Medicaid and CHIP enrollment and renewals.
In addition, the law restricts Medicare eligibility for certain lawfully present immigrants, which CBO estimates will increase the number of uninsured by about 100,000 by 2034.
While specific administrative deadlines and state timelines will vary, the period beginning in late 2026 is important because states are expected to begin implementing more of these provisions and adjust their systems in ways that could affect coverage stability.
What This Means for Alabama
Because Alabama did not expand Medicaid under the Affordable Care Act, some of H.R. 1’s most severe work reporting and frequent redetermination requirements for expansion adults do not directly apply here at this time.
However, Alabama is still affected by other parts of the law:
- The law eliminates key financial incentives that were designed to encourage states like Alabama to expand Medicaid, including hundreds of millions of dollars in enhanced federal funding that would have supported expansion.
- H.R. 1 includes restrictions on provider taxes, a tool Alabama uses to help finance its share of Medicaid costs, which can limit the state’s flexibility over time.
- The law fails to extend enhanced ACA Marketplace premium subsidies that have made private coverage more affordable since 2021, leading to higher premiums for many Marketplace enrollees beginning in 2026.
Analyses of H.R. 1’s impact on non‑expansion states indicate that eligibility and financing changes will likely lead to reduced services, greater pressure on hospitals and clinics, and more coverage instability, even without full Medicaid expansion.
For families in Alabama, this means Medicaid and Marketplace coverage may become harder to obtain and maintain, and the state will have fewer options to close existing coverage gaps in the future.
The Biggest Risk Isn’t Losing Eligibility, It’s Losing Coverage Because of Paperwork
One of the most misunderstood aspects of Medicaid is why people lose coverage.
Policy experts warn that under H.R. 1, many people who still meet the eligibility criteria may lose coverage due to administrative barriers rather than changes to the rules themselves.
Common reasons for losing Medicaid include:
- Renewal paperwork is incomplete or submitted late.
- Medicaid cannot reach the enrollee because their address or phone number has changed.
- Required documents were not submitted by the deadline.
- Families do not realize that action is required to keep coverage.
KFF’s analysis of H.R. 1’s impact on Medicaid eligibility rules explains that the law delays the implementation of two federal regulations designed to simplify enrollment and renewal and reduce red tape.
By delaying these simplification rules and layering on additional requirements in some states, H.R. 1 is expected to increase coverage loss due to administrative churn, especially during renewal periods and transitions between Medicaid, CHIP, and Marketplace coverage.
This means many families could experience temporary interruptions in coverage, not because they no longer qualify, but because paperwork is missed or delayed.
How Losing Medicaid Can Affect Your Family
When Medicaid coverage unexpectedly lapses, families may experience:
- Delayed counseling appointments.
- Insurance claims that are denied.
- Unexpected out‑of‑pocket healthcare expenses.
- Delays in medication management.
- Difficulty accessing specialists.
- Increased stress during an already challenging time.
For children receiving counseling, consistency is an important part of successful treatment. Interruptions in therapy can delay progress, increase anxiety, and create additional stress for both children and parents.
Even short coverage gaps can make it harder to maintain continuity with trusted providers, keep up with prescriptions, and follow through on recommended treatment plans.
How These Changes Affect Counseling Practices
The impact of coverage instability extends beyond patients and families.
As Medicaid and Marketplace coverage become more complex and less stable, healthcare providers often experience:
- Increased insurance denials and rejected claims.
- Delayed reimbursement and cash‑flow challenges.
- More administrative work for office staff, including repeated eligibility checks.
- Additional time spent helping families interpret letters, notices, and coverage changes.
- Interrupted treatment plans when clients pause services due to uncertainty about coverage.
Analyses in non‑expansion states suggest that changes to Medicaid financing will put financial pressure on hospitals, clinics, and community health organizations and may lead to reduced services over time.
For counseling practices, this means a greater need to monitor coverage status, adjust scheduling when insurance changes occur, and advocate with families to keep paperwork and contact information up to date.
What You Can Do Right Now
Fortunately, there are practical steps you can take now that can dramatically reduce the likelihood of an interruption in coverage.
Keep Your Contact Information Current
If you have moved or changed your mailing address, phone number, or email address, update your information with the Alabama Medicaid Agency as soon as possible.
When Medicaid cannot reach you, it is much more likely that renewal deadlines will be missed or important notices will go unanswered.
Read Every Letter From Medicaid
Many people lose benefits simply because they never open or respond to renewal notices.
If you receive mail from Medicaid or your local eligibility office, open it immediately and carefully follow any instructions.
If a letter is confusing, call the number listed or contact your healthcare provider’s office for help understanding it.
Complete Renewal Paperwork Promptly
Do not wait until the last day listed on your notice.
Submitting requested information early gives Medicaid more time to process your renewal before your current coverage period ends.
Under H.R. 1’s tighter administrative environment, delays in returning forms or documents can more easily result in temporary coverage loss.
Tell Your Healthcare Providers About Insurance Changes
If you receive any notice that your Medicaid coverage may change, or if you are unsure what a letter means, contact your healthcare providers as soon as possible.
Early communication can often prevent appointment delays or billing surprises and allows providers to help you explore options if a coverage gap occurs.
How Garrett Counseling Is Preparing
At Garrett Counseling, we are proactively preparing for these changes by:
- Strengthening our insurance verification process before appointments.
- Monitoring upcoming Medicaid policy updates and Marketplace changes affecting our clients.
- Training our administrative staff on coverage changes and renewal challenges.
- Working to identify potential insurance issues before sessions whenever possible.
Although we cannot determine Medicaid eligibility or complete state paperwork on your behalf, we are committed to helping families navigate these changes with as little disruption to treatment as possible.
Our Message to Families
There is no reason to panic.
There is every reason to be prepared.
The biggest threat for many families is not that they suddenly no longer qualify for Medicaid. The greater risk is missing an important notice, overlooking a renewal deadline, or failing to submit requested paperwork in time.
By staying informed, keeping your contact information up to date, and responding promptly to Medicaid requests, you can significantly reduce the risk of interruptions to your healthcare coverage.
If you have questions about how changes to your insurance may affect your appointments at Garrett Counseling, please contact our office. We are committed to helping you continue receiving the care you and your family deserve.
Disclaimer
This article is intended for educational purposes only and summarizes publicly available information as of July 2026 from sources such as the Congressional Budget Office, Georgetown University Center for Children and Families, KFF, and Alabama‑based advocacy organizations.
Medicaid and Marketplace policies continue to evolve through federal guidance, state decisions, and ongoing implementation of H.R. 1. Eligibility and coverage decisions are made by the Alabama Medicaid Agency and, for Marketplace plans, by plan issuers and HealthCare.gov, not by Garrett Counseling.
This article does not provide legal advice or an official interpretation of H.R. 1. If you have questions about your specific Medicaid or Marketplace eligibility or coverage, please contact the Alabama Medicaid Agency, your local eligibility office, or a qualified benefits counselor.
Sources
Georgetown University Center for Children and Families
Park, E. (2025, August 14). New CBO Health Coverage Estimates of Budget Reconciliation Law. Center for Children and Families, Georgetown University.
Georgetown University Center for Children and Families
Park, E. (2025, July 21). Medicaid, CHIP, and Affordable Care Act Marketplace Cuts and Other Health Provisions in the Budget Reconciliation Law, Explained. Center for Children and Families, Georgetown University.
Congressional Budget Office (CBO)
Congressional Budget Office. (2025). Health Provisions in P.L. 119‑21, the FY2025 Reconciliation Law. Congressional Research Service summary drawing on CBO estimates.
KFF (Kaiser Family Foundation)
KFF. (2025, September 21). The Impact of H.R. 1 on Two Medicaid Eligibility Rules. Issue brief explaining delayed implementation of Medicaid eligibility and enrollment rules and related coverage impacts.
Alabama Arise – One Big Beautiful Bill Act Overview
Alabama Arise. (2025, July 7). What we know about the health care changes in the new federal budget law. Explains how H.R. 1 (One Big Beautiful Bill Act) affects Alabama’s Medicaid program, Marketplace coverage, and incentives for expansion.
Alabama Arise – H.R. 1 and Health Coverage Gap
Alabama Arise. (2026, May 19). Close Alabama’s health coverage gap: Enact policies to save lives in Alabama. Discusses H.R. 1’s impact on federal Medicaid match rates and Alabama’s ability to expand Medicaid.
Alabama Arise – Fact Sheets on H.R. 1
Alabama Arise. (2026). How the so‑called One Big Beautiful Bill Act worsens health and hunger in Alabama communities. Fact sheet describing H.R. 1’s statewide impacts and confirming its July 4, 2025 enactment date.alarise+1
CLASP (Center for Law and Social Policy) or similar non‑expansion state analysis
CLASP. (2025, December 3). Impact of Medicaid Cuts in H.R. 1 on Non‑Expansion States. Brief analyzing how eligibility and financing changes in H.R. 1 affect non‑expansion states like Alabama.
Additional CCF Financing Analysis
Park, E. (2025, June 28). Congressional Budget Office Confirms Senate Republican Reconciliation Bill’s Medicaid Cuts Are Even Harsher Than House‑Passed H.R. 1. Center for Children and Families, Georgetown University. (Provides comparative figures that help contextualize the magnitude of Medicaid and CHIP cuts in H.R. 1.)