Measuring Medicaid Reform Beyond Federal Savings: A Public Health Perspective on H.R. 1 and Its Downstream Effects

Federal budgets are good at showing what the government spends. However, they are less effective at showing where costs go after spending is reduced.

That limitation is central to understanding H.R. 1, the 2025 federal reconciliation law enacted as Public Law 119-21. Much of the discussion has focused on federal savings and projected increases in uninsurance. Yet neither lower spending nor lower enrollment indicates that Medicaid is functioning better. The more consequential test is whether H.R. 1 produces better or equivalent care and health outcomes with fewer total resources—and whether its federal savings are accompanied by greater unmet need, financial risk, morbidity, mortality, or costs elsewhere.

What H.R. 1 Changes

H.R. 1 changes Medicaid eligibility, financing, cost-sharing, and administration. Supporters say the law can strengthen program integrity, encourage employment and self-sufficiency, and reduce federal spending.

Under the CMS implementation framework issued in June 2026, states generally must implement community-engagement requirements no later than January 1, 2027. The requirements apply to many nonpregnant adults ages 19 through 64 in the Medicaid expansion group and certain Section 1115 demonstrations, through which states test federally approved changes to Medicaid.

Community-engagement requirements receive particular attention here because they illustrate how policy design, administrative interpretation, and implementation can combine to affect coverage and care.

Affected adults may satisfy the requirement through at least 80 hours per month of work, community service, a qualifying work program, or a combination of activities; enrollment at least half-time in an educational program; or monthly earnings of at least 80 times the federal minimum wage. The law includes exemptions for certain parents and caregivers, pregnant and postpartum people, American Indians and Alaska Natives, former foster youth, totally disabled veterans, people participating in drug or alcohol treatment, and individuals determined to be medically frail or to have special medical needs. States may also elect specified short-term hardship exceptions.

States will verify compliance at application and renewal and may conduct additional checks. If compliance or an exemption cannot be verified, the state must provide notice and allow 30 calendar days for the individual to submit information before coverage may be denied or terminated.

The Congressional Budget Office estimates that the Medicaid provisions will reduce the federal deficit by approximately $886.8 billion from 2025 through 2034 while increasing the number of uninsured people by 7.5 million in 2034. These estimates reflect the combined effect of the Medicaid provisions, not the community-engagement requirement alone. CBO presents both as projected effects of the enacted law.

Earlier state programs cannot predict what will happen nationally, but they do show how implementation can diverge from policy intent. For example, in Arkansas, more than 18,000 adults lost Medicaid coverage during the state’s 2018 work-reporting program—approximately one-quarter of those subject to the requirement. A peer-reviewed study found a significant increase in uninsurance without a statistically significant increase in employment. In Georgia the U.S. Government Accountability Office reported $54.2 million in administrative spending for the state’s Pathways to Coverage program between October 2020 and March 2025, a period that included a two-year litigation delay. Administration represented more than two-thirds of the demonstration’s total spending during that period. GAO also identified weaknesses in federal review and oversight of those expenses.

These two experiences demonstrate why enrollment cannot serve as a proxy for performance. Employment, earnings, eligibility accuracy, administrative cost, coverage continuity, and health outcomes are distinct results. Each requires its own measure.

Coverage May End. Health Needs Do Not.

Not everyone who loses Medicaid will become uninsured or experience worse health. Some will transition to employer-sponsored insurance, Marketplace coverage, or another source of care. Others may experience gaps that interrupt medications, preventive care, chronic-disease management, behavioral health services, or substance-use treatment.

The public health concern is the sequence that may follow: Policy and administrative changes → changes in coverage and financing → changes in access and continuity → changes in health care use and system capacity → changes in morbidity, mortality, and total public cost.

Emergency department volume alone will not reveal whether that sequence is occurring. Uninsured people often use less health care overall, and research does not support the simple assumption that they are necessarily heavier users of emergency departments. Lower utilization may reflect financial barriers or delayed treatment rather than better health. Disruptions in insurance and regular care have also been associated with emergency department use. Visit counts alone cannot distinguish improved health from unmet need.

The Emergency Medical Treatment and Labor Act (EMTALA) requires Medicare-participating hospitals with emergency departments to screen and stabilize patients with emergency medical conditions regardless of insurance status or ability to pay. EMTALA protects access to emergency evaluation and stabilization, but it does not create continuing coverage or guarantee medications, transportation, specialty care, or treatment after discharge.

Emergency-room care can address immediate danger without resolving the underlying condition. Without continuing care, a person may return with worsening illness, leading to repeated emergencies, hospitalization, disability, lost work, or premature death. This gap is especially consequential in behavioral health and substance-use care.

In addition, patients may accumulate medical debt or forgo future care. Hospitals may provide charity care, record unpaid bills as bad debt, reduce services, or absorb unreimbursed costs. Federal, state, and local programs may offset part of the expense, while providers, families, employers, and communities carry the remainder. A KFF analysis estimated that public funding covered a substantial portion—but not all—of uncompensated care for uninsured patients in 2017. Those costs were distributed across federal, state, and local sources.

Federal Medicaid savings and total health care savings, therefore, are not interchangeable. If federal Medicaid spending falls only for the burden to reappear as hospital uncompensated care, county behavioral health spending, family medical debt, or unmet health needs, the system has not necessarily eliminated the cost; it may simply have transferred the bill. One budget may look better while the broader public balance sheet—and the health of the population—does not improve.

Suicide, Morbidity, and Mortality Belong in the Analysis

Coverage can influence whether people receive care before illness becomes a crisis.

In 2020, the suicide death rate among Medicaid beneficiaries ages 25 through 64 was 21.1 per 100,000, compared with 17.6 per 100,000 in the overall U.S. population of the same age. Across all ages, 9,401 Medicaid beneficiaries died by suicide that year.

It’s important to note that Medicaid does not cause the elevated rate, and differences in health status and economic circumstances limit direct comparisons. They identify a population already experiencing substantial clinical and social vulnerability, for whom continuity of behavioral health care is particularly important. 

Another recent study found that Medicaid expansion was associated with 1.01 fewer suicide deaths per 100,000 nonelderly adults, with a larger estimated association of 2.70 fewer deaths per 100,000 among adults ages 18 through 29. The association also became stronger over time.

This does not mean that H.R. 1 will increase suicide deaths, nor can the effects of expansion simply be reversed to predict the consequences of coverage loss. Suicide has many interacting causes. The evidence does, however, support monitoring treatment interruptions, psychiatric emergencies, overdoses, suicide attempts, and suicide deaths as implementation proceeds.

Broader mortality research points to the same need for attention. A national observational study found that Medicaid expansion was associated with 11.8 fewer all-cause deaths per 100,000 adults annually, although results varied substantially among states. This is a population-level association, not a forecast of deaths under H.R. 1.

Mortality is a lagging indicator. By the time a change in death rates becomes visible, disruption may already be apparent in missed medications, uncontrolled chronic illness, delayed diagnoses, preventable hospitalizations, overdoses, or interrupted maternal and behavioral health care. These earlier indicators may reveal more about how implementation is affecting health—and sooner.

New Mexico: A High-Stakes Test of Reform

New Mexico is a strong test case for H.R. 1. It has the nation’s highest per-capita Medicaid enrollment, extensive rural and frontier communities, persistent provider shortages, and substantial behavioral health needs.

Approximately 42% of New Mexico residents receive Medicaid, and a state estimate places nearly 89,000 at risk of losing coverage under the community-engagement requirements. The final number will depend on exemptions, compliance, verification, implementation, and transitions to other coverage. New Mexico Voices for Children summarizes the estimate and implementation context.

The consequences of coverage disruption would extend beyond individual enrollment into communities already managing long travel distances, workforce shortages, fragile provider networks, and limited alternatives when care is unavailable.

H.R. 1 also created the $50 billion Rural Health Transformation (RHT) Program, including approximately $211.5 million for New Mexico in fiscal year 2026. The funding can support workforce development, technology, behavioral health, substance-use treatment, and new care models. 

This creates a second test of reform: whether time-limited transformation funding becomes part of a coherent statewide strategy or is dispersed across disconnected projects. RHT funding cannot replace Medicaid coverage or recurring reimbursement, but it can strengthen the workforce, infrastructure, coordination, and care models needed to respond to changing patterns of demand.

New Mexico can align RHT investments with Medicaid implementation data from the outset—identifying where coverage and access are changing, which providers and communities face the greatest pressure, and which investments are reducing preventable crises and sustaining essential services.

The state will offer an early, high-stakes test of whether reform can reduce total costs while preserving access and system capacity—or whether federal savings reappear as new pressures elsewhere.

How Will We Know Whether This Is Reform?

H.R. 1 will produce numbers that are easy to report: federal savings, Medicaid enrollment, compliance rates, and administrative spending. Those figures do not establish that the health care system is performing better. A smaller federal program is not necessarily a more efficient one, and fewer people enrolled is not the same as fewer people needing care.

Evidence of success would include increased employment or earnings, more accurate eligibility determinations, lower ad

ministrative and total system costs, and stable or improved access and health outcomes. Determining whether those results occur requires evaluation at three connected levels:

• Policy: What happens to federal and state spending, coverage, employment and earnings, access, health outcomes, and the distribution of costs?

• Interpretation: How are qualifying activities, exemptions, hardships, documentation, and verification defined and applied—and do those decisions advance the law’s stated purpose?

• Implementation: Are applications, renewals, notices, appeals, and coverage transitions handled accurately, promptly, and fairly, or do administrative failures produce avoidable coverage loss?

Downstream measures complete the analysis:

• Access and continuity: Primary, specialty, behavioral health, substance-use, and prescription care

• Health care use: Preventable emergency visits and hospitalizations, readmissions, delayed diagnoses, missed medications, and changes in patient acuity

• Health outcomes: Chronic-disease control, maternal outcomes, overdoses, suicide attempts and deaths, disability, morbidity, and mortality

• System and community effects: Uncompensated care, workforce capacity, rural service stability, EMS and behavioral health demand, medical debt, and state and local spending

• Equity: Differences by disability, age, race and ethnicity, Tribal status, rurality, language, caregiving responsibilities, housing stability, and access to technology

Different institutions will detect different consequences first. Providers may see medication gaps, missed follow-up visits, or changes in patient acuity. Hospitals may see uncompensated care and capacity pressures. Counties may see rising EMS, behavioral health, or indigent-care demand. State agencies may observe changes in eligibility, renewals, appeals, coverage transitions, employment, and service use. Taken together, these indicators can reveal whether changes are isolated administrative events or evidence of a broader shift in access, health, and system capacity.

Timing also matters. Federal savings may appear quickly. Administrative costs and enrollment changes may follow within months. Changes in chronic illness, hospital capacity, suicide, morbidity, and mortality may take years to emerge. A credible evaluation must track both the immediate fiscal effects and the delayed human and system consequences.

The central question about H.R. 1 is whether the policy produces better or equivalent health outcomes, access, continuity, and system capacity with fewer total resources. If federal savings are accompanied by more untreated illness, preventable crises, medical debt, uncompensated care, or costs shifted to states and communities, then the policy has not achieved genuine efficiency. It has transferred the bill.