What Could OBBB Mean for Families with Children in DC?: Monte Carlo Simulation 2025

Posted in Blog SDOH What's New

September 2025

By Simon Esserman-Rice

EXECUTIVE SUMMARY

Objective: Model the impacts of proposed OBBBA cuts to major social safety net programs — Medicaid, CHIP, and SNAP.

Approach: Simulated 1,000 families with diverse income levels and demographic profiles.

Method: For each family, calculated indicators of instability and burden using formulas that combined household data with stochastic elements.

Policy Scenario: Applied OBBBA cuts within the formulas and recalculated outcomes to estimate changes in family well-being.

1. SIMULATION WORLD

Sample population – representative of typical patients served by HCFI partner hospitals in DC (Department of Community Pediatrics):

1000 relatively low-income DC families:

  • Lowest: $16,590, Low: $36,400, Medium: $54,696, High: $72,240

Single mother of 2 children

  • Youngest child age 0-6 / 7-13 / 14-17
  • Each individual has 0 / 1 / 2+ chronic conditions
Shows income levels, Medicaid benefits for adults and children, SNAP benefits, and average monthly work hours for households with the youngest child aged 0–6.
Table 1. Income & Benefits by Household with Young Child (Age 0–6)

Each individual has 1 health visit / year

  • Population entirely reliant on Medicaid
Presents the same breakdown for households with the youngest child aged 7–13.
Table 2. Income & Benefits by Household with School-Age Child (Age 7–13)

Each family has chance of 1 financial surprise / year

  • Covers possibility of non-medical surprises (popped tire, broken phone, etc.)
Details income levels, Medicaid and SNAP benefits, and work requirements for households with the youngest child aged 14–17.
Table 3. Income & Benefits by Household with Older School-Age Child (Age 14–17)

2. PREDICTED SNAP IMPACTS

Work requirement for parents of child age 14+ → $239 lost / month, down from $785

  • Parents with inconsistent hours vulnerable

Any family of child age 14+ at risk of red tape → 28% rate (due to risk of not turning in paperwork)

3. PREDICTED CHIP IMPACTS

No explicit CHIP cuts put in motion for US citizens

However, more frequent parent renewals, paperwork burdens, and disenrollment processes for expansion parents

  • Children may subsequently lose coverage → 10% rate

4. PREDICTED MEDICAID IMPACTS

Work requirement for parents of child age 14+ → parents cut off (8.3%)

Semi-annual renewals for ACA expansion enrollees → 36% cut off annually

  • 37% regain benefits in 6 months
  • 10% regain in 6 – 12 months
  • 53% regain after 12 months
    • ≈ 28% total chance Simulation expansion adult will be uninsured during their yearly health visit

$35 co-pay per health visits for expansion enrollee

  • ≈ 25% less Medicaid utilization for expansion enrollees

5. SIMULATION: OUTCOMES DEFINED

Simulation process:

  • Each run has 1000 families/observations, 5 total runs
  • Results are the average of these 5 runs

Burden measurements

  • Food burden → food cost exceeds 17% income
  • Financial burden → cost of living exceeds income + benefits
  • Healthcare burden → health cost exceeds 5-10% income

All compared to the $ saved by the government

  • ≈ $1475 cut per Sim. Family
  • Vast majority of cuts are in Medicaid (88%)
Total estimated reductions in SNAP and Medicaid benefits across the simulation sample.
Figure 1. Benefits cut per 1,000 simulated families

6. SIMULATION OUTCOMES: MEDICAID

17.7% more Simulation Families healthcare burdened

  • 33.3% of lowest income group newly burdened, 28.4% of low

Lowest income (targeted by work req.) most impacted

  • Some red tape, child admin. churn

Low income (targeted by semi-annual renewal, co-pay) similarly impacted

  • More red tape, more child admin. churn

Oldest age group (14+) experienced largest increase in healthcare burden (+28%)

The lowest and low-income classes are vulnerable to loss, because they make up the majority of Medicaid eligible people before

  • Had been fully protected from financial risk, 22.3% Medicaid eligible families now burdened
Comparison of families reporting healthcare burden before and after benefit cuts, disaggregated by income.
Figure 2. % of simulated families with healthcare burden by income level
Overall share of families facing healthcare burden before and after benefit cuts.
Figure 3. % of simulated families with healthcare burden
Comparison before and after benefit cuts, disaggregated by age of youngest child (0–6, 7–13, 14+).
Figure 4. % of simulated families with healthcare burden by age group
Comparison before and after benefit cuts, segmented by whether parents were originally eligible for Medicaid.
Figure 5. % of simulated families with healthcare burden by original parent Medicaid eligibility

7. SIMULATION OUTCOMES: SNAP

Average recipient spent 1.51% more of income on food

  • Mostly impacting the lowest income class, who are targeted by the SNAP work req.

Because they must pay more out of pocket for food, many families might newly only be able cover <50% of their Cost of Living

  • 2.65% increase
Comparison of the share of household income allocated to food expenditures by SNAP recipients before and after benefit cuts.
Figure 6. % of SNAP recipient income spent on food
Proportion of families falling below half of the estimated cost of living before and after benefit cuts.
Figure 7. Share of simulated families living under 50% of cost of living (COL)

8. POLICY IMPLICATIONS

OBBBA may introduce new financial risk factors / exacerbate existing ones:

  • Age of youngest child is a new vulnerability (families with youngest child of 14+ experience disproportionate damage)
  • Individuals with chronic conditions are extremely vulnerable to financial catastrophe if removed from Medicaid
  • The most underprivileged groups are the most likely to have their benefits decreased, and if cut, they are the most likely to be unable to recover

If families are uninformed of how to comply with the changes, many more people will experience SNAP cuts / Medicaid loss despite continuing to qualify (semi-annual renewals + increased vulnerability of child administrative churn)

In light of this, providers serving SNAP/Medicaid recipients might be encouraged to:

  • Advise expansion-adults about semi-annual renewals
  • Note that their kids are also additionally vulnerable
  • Remind parents of kids 14+ of 80hr/month work requirement
  • Advise them on alternative ways to qualify (volunteering, school)

Note: This Monte Carlo Simulation was developed by Simon Esserman-Rice, a rising sophomore in Economics at the University of Chicago, under the guidance of Carol B. Davis, PhD, MBA, Assistant Research Professor & Associate Director of the Health Care Financing Initiative. For a narrative application of this model, see the blog post “What Do OBBB’s Medicaid Provisions Mean for Families with Children in DC?” available on this same webpage.