The Implications of the One Big Beautiful Bill Act (HR.1) for Long-Term Services and Supports

The Budget Reconciliation Act of 2025 (HR.1) adopts major changes in Medicaid, with far-reaching ramifications for long-term services and supports (LTSS). Although the law creates a new home and community-based services (HCBS) waiver option for beneficiaries "at risk" of institutionalization, its impact will be limited, given widespread Medicaid retrenchment. A national home-equity cap will increasingly require individuals to spend down housing assets to qualify for LTSS coverage. A ten-year moratorium on federal minimum nursing home staffing standards removes a tool for improving quality. New restrictions on states' use of provider taxes and directed payments, combined with substantial reductions in federal Medicaid spending, will constrain state financing. In response, states will likely lower provider reimbursement, tighten eligibility, and restrict the scope and duration of LTSS, particularly HCBS. Shortened retroactive eligibility windows, more frequent eligibility redeterminations, and burdensome workforce requirements will further destabilize the direct care work force and place additional pressure on family caregivers. Absent corrective policy action, HR.1's Medicaid provisions risk further weakening an already inadequate LTSS infrastructure during a period of growing unmet need, when rising demand has outpaced caregiving capacity.