President Trump signed the One Big Beautiful Bill Act (OBBBA), or H.R. 1, into law on July 4, 2025. The bill makes significant changes to key health care programs including Medicaid, known as TennCare in our state, and the ACA Marketplace.
While many of the Medicaid-related provisions impact Medicaid expansion states (states that have expanded eligibility to cover adults with incomes between 100-138% of the Federal Poverty Level), folks covered by TennCare and the ACA Marketplace will still experience impacts. These changes will leave an estimated 290,000 Tennesseans uninsured by 2034, according to an analysis by the Kaiser Family Foundation.
Medicaid (TennCare)
Narrower categories of non-citizens eligible for Medicaid
Beginning October 1, 2026:
- Refugees, asylees, and humanitarian parolees are no longer eligible for Medicaid
- The only categories of non-citizens eligible for Medicaid include:
- Lawful Permanent Residents
- Certain Cuban and Haitian entrants
- Citizens of Freely Associated States (Federated States of Micronesia, Republic of Marshall Islands, and Palau)
Limits on retroactive coverage
- Retroactive coverage is limited to up to two months (compared to up to three months previously)
Changes to Medicaid financing
The OBBBA places limits on Medicaid financing mechanisms including provider taxes and state directed payments. These provisions don’t have a direct impact on community health centers, but they could eventually reduce the amount of financing available for Medicaid.
- Freezes provider taxes at current levels, 6% for non-Medicaid expansion states including Tennessee, and prohibits any new provider taxes
- Learn more about provider taxes
Beginning July 4, 2025:
- Limits state directed payments to 110% of the Medicare rate for non-expansion states including Tennessee
Affordable Care Act (ACA) Marketplace Changes
The OBBBA made several changes to the Affordable Care Act (ACA) Marketplace, which in Tennessee is a federally operated exchange. Some of the most notable changes include the following a few changes that go into effect in August:
Beginning August 25, 2025:
- Allows people with incomes below 150% FPL to sign up for an ACA plan at any point in the year but prohibits those who sign up outside of Open Enrollment or a Qualifying Life Event from receiving subsidies
- Implements stricter requirements for verifying income and eligibility for Special Enrollment Periods (SEPs)
- Deferred Action for Childhood Arrivals (DACA) recipients are no longer eligible for Marketplace plans
Changes to Lawfully Present Immigrant Eligibility
Beginning January 1, 2026:
- Prohibits lawfully present immigrants who are ineligible for Medicaid and whose income is less than 100% of the FPL from accessing Premium Tax Credits (PTCs)
Beginning January 1, 2027:
- Prohibits certain categories of lawfully present immigrants including refugees, asylees, and people with Temporary Protected Status, from receiving subsidies on ACA Marketplace plans, regardless of income
Eligibility and Verification Requirements
Beginning January 1, 2028:
- Eliminates automatic re-enrollment
- Eliminates provisional Advanced Premium Tax Credit (ADPTC) eligibility, preventing people from getting APTCs until the marketplace has verified their income and other eligibility criteria
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