What Do OBBB’s Medicaid Provisions Mean for Families with Children in DC?

Posted in Blog SDOH What's New  |  Tagged ,

September 2025

Authors:

Emmanuel Carrasco Hernandez, MPP – Research Assistant

Carol B. Davis, PhD, MBA – Assistant Research Professor & Associate Director

Over the past year and a half, the Health Care Financing Initiative at Georgetown University’s McCourt School, working with the Department of Community Pediatrics at MedStar, has focused on low-income families with children in Washington, DC. A consistent theme families highlight is the central role Medicaid plays in their stability, often determining whether households can see a doctor, pay the rent, or put food on the table.

With the proposed changes in the One Big Beautiful Bill (OBBB), a question arises: will families with children truly be protected, or will these provisions erode the safeguards that keep them secure?

This is what we found:

EXECUTIVE SUMMARY

PROPOSED FEDERAL CUTS WOULD DIRECTLY THREATEN BOTH HOUSEHOLD WELLBEING AND THE EFFECTIVENESS OF DCP’S FOOD AS MEDICINE (FAM) AND MEDICAL-FINANCIAL PARTNERSHIP (MFP) PROGRAMS. According to the Congressional Budget Office, the One Big Beautiful Bill Act (OBBB) could leave 7.8 million more people uninsured by 2034 due to its Medicaid provisions alone. 8, 19

To assess what this could mean on the ground, we combined national projections with a Monte Carlo simulation of families similar to those served by DCP. While not precise forecasts, the results illustrate the scale of potential risk:

  • The lowest-income households could see the steepest jump (≈32%), compared with ~5% among middle-income families.
  • Families facing healthcare burden could rise from ~6% before to ~25% after OBBB.

1. INTRODUCTION: MEDICAID AS THE BACKBONE OF FAMILY SECURITY

MEDICAID IS THE FINANCIAL BACKBONE FOR LOW-INCOME DC FAMILIES WITH CHILDREN, and looming cuts threaten not only their well-being but also the effectiveness of DCP’s own interventions.

This blog draws on our ongoing work with the Department of Community Pediatrics (DCP), where we are evaluating the Food as Medicine (FAM) and the Medical-Financial Partnership (MFP) initiatives. Proposed changes to Medicaid and SNAP are not abstract; they directly shape the stability of the families we serve and the outcomes of the programs we are building to support them. For these households, healthcare already accounts for 36.10% of the total cost of living; a proportion that underscores the vital importance of Medicaid’s protections.

2. RATIONALE: HOW MEDICAID CONTRIBUTES TO THE SAFETY NET

SAFETY NET PROGRAMS SUPPORT FAMILIES IN DIFFERENT WAYS. While programs like SNAP or TANF add resources for food or rent, Medicaid plays a distinct role: it frees households from the direct costs of health care and provides insurance protection against expenses that can be both sudden and unlimited 2, 3, 5

MEDICAID HELPS FAMILIES AVOID IMPOSSIBLE TRADE-OFFS. With routine and emergency care covered at zero effective price, families are less likely to face choices between rent, groceries, or a doctor’s visit. Evidence shows that expansion reduced medical debt balances by over $1,100 per person and lowered the risk of bankruptcy 6, 9, 15

MEDICAID’S VALUE IS MOST VISIBLE DURING HEALTH SHOCKS. Unlike other benefits, its insurance function is triggered when families encounter unplanned, potentially catastrophic costs. The Oregon experiment showed that Medicaid coverage nearly eliminated catastrophic out-of-pocket expenditures.5, 25

CHILDREN BENEFIT DIRECTLY AND THROUGH THEIR PARENTS. Medicaid and CHIP cover 42% of U.S. children under six, including 75% below 200% FPL (CCF, 2025).10 When parents gained Medicaid, their children were 29 percentage points more likely to receive preventive checkups, and early eligibility has been linked to higher earnings and lower mortality in adulthood (Venkataramani et al., 2017; Brown et al., 2020).7, 23

MEDICAID FUNCTIONS AS AN ANTI-POVERTY PROGRAM. Beyond health coverage, it has lowered Supplemental Poverty Measure (SPM) rates by up to 1.4 points, lifting nearly 700,000 people out of poverty during the ACA expansion 12, 29

COMMUNITIES AND PROVIDERS ALSO BENEFIT. By paying providers and freeing household resources, Medicaid sustains local demand and covers a sheer volume of patients. Medicaid finances ~40% of births nationwide, and at MedStar Washington Hospital Center, nearly 50% of births are covered by Medicaid. California’s early expansion was associated with an 11% drop in payday loan use and fewer housing evictions, while broader expansions cut uninsured rates and offset state costs. Still, gaps remain, with 1 in 5 enrollees carrying medical or dental debt 2, 3, 10, 11

GAINS ARE REAL, BUT NOT EQUALLY DISTRIBUTED. Expansions have narrowed health-related financial gaps, yet racial and ethnic disparities persist. Black and Hispanic families still hold lower credit scores and higher nonmedical debt, while increases in family wealth were concentrated among White and more educated households 14, 16, 26

3. HOWEVER, THERE IS A WARNING

The OBBB 2025 proposals warrant attention because they could lead to undesirable outcomes, including higher uninsured rates, increased medical debt, and poorer health indicators for low-income families.

  • Recent analyses show that coverage losses often stem from administrative churn rather than true ineligibility,13
  • that stronger enrollment protections help families stay covered,17
  • And that continuous eligibility rules for children now in effect remain at risk despite new federal safeguards.1

THESE SHIFTS WOULD ALSO SHAPE DEMAND FOR, AND THE MEASURABLE IMPACT OF, MedStar’s community-based interventions like Food as Medicine (FAM) and the Medical-Financial Partnership (MFP).

A. POLICY FRAMING VS. REALITY

POLICY FRAMING (WHAT PROPONENTS SAY)

Policymakers who proposed OBBB argue the bill simply “returns Medicaid to its original intent” and limits “mission creep.” They stress that “federal cuts won’t affect caregivers or children,” framing the changes as technical adjustments rather than cuts.

REALITY (WHAT EXPERTS WARN)

90-day CHIP waiting periods could leave kids uninsured for a quarter of their first year. The freeze allows states to reinstate waiting periods before coverage begins 1, 17, 21

36% yearly disenrollment risk for expansion adults. With semi-annual renewals, adults in the expansion group now face double the churn risk (20% → 36%), as stricter ID and income checks push even eligible parents out of coverage 13, 20

10% churn risk for children despite 12-month coverage guarantees. OBBB’s added paperwork and parental renewals mean nearly 1 in 10 kids can still lose coverage mid-year, with Hispanic children at particular risk (5.2% → 12.5%). 20, 21, 27

$35 Medicaid co-pays cut utilization by 25%. Adults over 100% FPL will be charged up to $35 per visit/test (capped at 5% of family income), leading to sharp drops in visits, labs, and prescriptions; not because needs decline, but because costs deter care 4, 18, 22

70% of disenrollments remain procedural under an Eligibility & Enrollment (E&E) rule freeze. Simplification could have cut churn to 30–40%, but freezing the rules locks families into burdensome paperwork, English-only notices, and failed auto-renewals. 21, 24, 28

~5% of children could be disenrolled over CHIP premiums. With the simplification rule frozen, states can charge $10–$20/month; even a missed $20 bill could lock a child out of coverage for 90 days 1, 4, 21

B. QUANTITATIVE DATA & EXHIBITS

THE SIMULATION SUGGESTS HOW MEDICAID CUTS COULD RIPPLE THROUGH FAMILY FINANCES. Using a Monte Carlo Simulation (Esserman, 2025) on single parents with two kids (households typical of those DCP serves), we explored how potential changes under OBBB might play out. The model suggests that even modest coverage reductions could lead to higher health costs, tighter food budgets, and reduced community resources.

These results illustrate possible directions and scales. They underscore a broader concern: Medicaid often functions as the financial backbone for low-income families. If that backbone is weakened, programs like Food as Medicine and the Medical-Financial Partnership may find themselves working against stronger headwinds.

We define burden by:

  • Healthcare burden. For middle- and high-income families, spending more than 10% of their income on healthcare signals strain; for low-income families, even 5% can force trade-offs with rent, food, or utilities. Families covered by Medicaid avoid this burden, but once coverage is cut, bills accumulate quickly.
  • Financial burden. A family is financially burdened when its adjusted living costs exceed its adjusted income.

Exhibit 1.  Families Facing Higher Health Costs

Before OBBB, about 6% of families fell into the category of healthcare burden. Under the modeled scenario, that share could rise to roughly 25%.

Exhibit 2. Disproportionate Effects by Income

 
The modeled increases are not uniform: the lowest-income families could see an estimated 32% rise in burden, while middle-income families may experience closer to 5%.

Exhibit 3. Community-Level Implications

Per 1,000 families, projected benefit reductions could amount to approximately $1.47M, with Medicaid accounting for most of the losses.

4. POLICY IMPLICATIONS & CONSIDERATIONS

FOR FAMILIES LIKE THOSE SERVED BY DCP, THE OBBB PROPOSALS MAY TRANSLATE INTO HIGHER RISKS of uninsurance, mounting medical debt, and poorer health outcomes; even for households that remain technically eligible. Added churn, new cost-sharing requirements, and procedural hurdles could gradually erode the very protections that have made Medicaid the cornerstone of the safety net, while also straining local providers with increased uncompensated care.

Medicaid Features Potentially Affected

  • Expansion coverage that has helped stabilize low-income adults and families 20, 21
  • CHIP protections that have kept children continuously insured 20, 21
  • Zero cost-sharing has reduced skipped care and avoided catastrophic bills.22
  • Simplified enrollment that has minimized procedural disenrollment and churn.21

IF THESE FEATURES WEAKEN, MEDICAID’S ROLE AS THE FINANCIAL BACKBONE OF LOW-INCOME FAMILIES COULD BE DIMINISHED. For DCP’s Food as Medicine (FAM) and Medical-Financial Partnership (MFP) programs, that context is not abstract: it shapes both demand for services and the outcomes they can achieve. Families pushed into deeper financial strain may turn more heavily to FAM and MFP, but at the same time, the programs’ ability to demonstrate measurable gains could be undercut by broader instability in the safety net.

5. CONCLUSION: CUTS IN PAPER, COSTS IN FAMILIES

MEDICAID IS A FOUNDATION OF EVERYDAY SECURITY. For a single parent in DC raising two young children, it often means checkups without co-pays, protection from surprise hospital bills, and more room in the budget for rent and groceries.

AND HERE IS THE CONTRADICTION. Proponents emphasized that OBBB “would not affect caregivers or children” and would only target those “abusing the system.” But in our simple simulation, children and working parents (the very families supposedly shielded) are at risk.

OBBB COULD WEAKEN THAT FOUNDATION. Added paperwork, new costs, and higher churn may not dismantle Medicaid, but they could erode the very features that make it effective: continuous coverage, financial protection, and access to care. For DCP’s Food as Medicine (FAM) and Medical-Financial Partnership (MFP), this would likely mean higher demand and more challenging conditions for progress; a reminder that cuts, framed as savings on paper, often materialize as costs for households, hospitals, and communities.

Note: This analysis incorporates insights from a Monte Carlo model created by Simon Esserman-Rice as part of his research with the Health Care Financing Initiative (2025). For more details and information, see the companion post “What Could OBBB Mean for Families with Children in DC?: Monte Carlo Simulation 2025.” For additional inquiries, please contact the Health Care Financing Initiative.

References

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  2. Allen, Hilary, Anna Swanson, Jialan Wang, and Tal Gross. 2017. “Early Medicaid Expansion Associated with Reduced Payday Borrowing in California.” Health Affairs 36 (10): 1769–76. https://doi.org/10.1377/hlthaff.2017.0369.
  3. Allen, Heidi L., Emily Eliason, Naomi Zewde, and Tal Gross. 2019. “Can Medicaid Expansion Prevent Housing Evictions?” Health Affairs 38 (9): 1451–57. https://doi.org/10.1377/hlthaff.2018.05071.
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