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In July 2025, Congress enacted the One Big Beautiful Bill Act (OBBBA), a sweeping budget reconciliation law that, among many provisions, slashes federal Medicaid funding by roughly $1 trillion over the next decade. Lawmakers allegedly added these cuts to help offset the cost of trillions of dollars in tax reductions included in the same bill. The rollback, nearly one-third of Medicaid’s federal budget according to some estimates, represents the largest cut to America’s health care safety net in United States history. The cuts primarily come from implementing new barriers to access like new work requirements, limits on state funding mechanisms, and caps on spending growth. These changes are expected to strip health coverage from millions of Americans as a result, with one of the most vulnerable populations who rely on Medicaid for critical long-term care and support being hit the hardest: people with disabilities.
Medicaid: A Lifeline for Millions with Disabilities
Medicaid provides healthcare coverage for more than 15 million disabled Americans— almost 35 percent of the United States’ disabled population. This number includes children with severe disabilities, working-age adults with physical or intellectual impairments, and seniors with age-related disabilities. Medicaid not only covers routine physician visits, medications, and therapies, but also long-term services and supports (LTSS) which Medicare or private insurance plans do not normally cover. Medicaid, which is the largest single payer for LTSS in the United States, paid for approximately $257 billion of the $563.7 billion spent on all LTSS nationwide in 2023, the culmination of ten years’ worth of Medicaid spending growth on LTSS. The sheer magnitude of annual spending on LTSS reflects Medicaid’s central role in supporting Americans who need assistance with daily living due to disability or chronic illness.
Under the umbrella of LTSS Medicaid benefits for people with disabilities is home and community-based services (HCBS). Nearly 4.5 million Medicaid enrollees with disabilities rely on the program’s HCBS to maintain both their health and dignity in community settings, and 70 percent of enrollees who benefit from LTSS qualify for Medicaid reimbursement because they are disabled. These services—which can range from supports such as personal care aides and in-home nursing to adult day programs and assistive technologies—allow disabled Americans to perform daily tasks (e.g. bathing, eating, dressing) and live independently at home. Critically, in permitting disabled beneficiaries to receive at-home care, Medicaid protects many disabled people from the indignities they might face in residential care institutions, where disabled individuals have historically experienced severe psychological, sexual, and physical abuse.
Medicaid’s support for people with disabilities extends beyond health care and into the American public education system, where it funds critical services in schools so that students with disabilities can learn in inclusive classrooms. Nearly 70% of U.S. school districts use Medicaid dollars to pay for special education supports such as speech therapy, school nurses, and mental health services. Furthering its reach outside of the medical realm, Medicaid also makes it possible for people with disabilities to work and participate in their communities. Research shows that in states which expanded Medicaid under the Affordable Care Act, allowing low-income adults to qualify more easily, individuals with disabilities had nearly a 6% higher employment rate. Federally funded Medicaid programs are a critical foundation for disabled Americans’ health, independence, and quality of life. Gaps in care left by private insurance and Medicare are thus patched, allowing for people with disabilities to participate in society to the fullest extent.
LTSS at Stake: Home Care on the Chopping Block
The OBBBA’s deep Medicaid cutbacks put these crucial supports in jeopardy. Because Medicaid is a federal–state partnership, slashing federal funding by hundreds of billions forces states to either pour in massive new funds or, more realistically, make painful cuts to services and eligibility. The services most at risk are long-term and home-based care, which are demonstrably the most instrumental to disabled populations in particular. While nursing home care is a mandatory Medicaid benefit, most home- and community-based services are “optional” benefits that states can choose to provide. In times of budget shortfall, optional benefits become the prime targets for reduction. “My concern is that home-based health care is going to be cut,” said one health policy expert, noting that states faced with less federal Medicaid dollars have few other places to trim besides optional HCBS programs. History supports this fear; when state Medicaid budgets are strained, home and community services are often the first to go, leading to devastating deficits in available assistance.
The Senate’s reconciliation bill (the basis of OBBBA) explicitly contemplated cuts of roughly $940 billion in Medicaid over 10 years. Analysts warn that such a funding gap would force states to eliminate coverage, reduce or outright end certain services, and pay providers far less. Optional HCBS programs, which already operate under limited waivers and caps, would likely see enrollment freezes, growing waitlists, or service eliminations. Even today, Medicaid HCBS programs cannot meet demand. More than 700,000 people with disabilities are currently on waiting lists for community-based care services. Those waitlists will only swell further if states start capping or closing these programs due to funding cuts.
Human Rights Implications: The Right to Community Living
Beyond the budget ledgers, these cuts raise profound human and civil rights concerns. The ability to live in the community, make choices about one’s daily life, and avoid unnecessary institutionalization is a core principle of disability rights law. In the landmark 1999 case Olmstead v. L.C., the U.S. Supreme Court held that unjustified isolation of people with disabilities in institutions is a form of discrimination, violating the integration mandate of the Americans with Disabilities Act (ADA). The Olmstead decision affirmed that states must provide services in the “most integrated setting” appropriate; typically, this has meant offering community-based care whenever feasible rather than forcing someone into a facility. In response, federal and state policies over the last two decades have worked to expand Medicaid-funded HCBS and help people transition out of institutions. The One Big Beautiful Bill Act’s cuts directly threaten this mandate. If Medicaid funding shortfalls lead states to scale back HCBS, many individuals who could live at home with some support might instead be pushed into nursing or group homes. This outcome is not only more costly in many cases, but it also robs people of their independence and dignity. Individuals could lose the basic freedoms most of us take for granted, like deciding what to eat, when to go outside, or whom to live with, if they become institutionalized or homebound.
Ripple Effects: Shifting Costs to Families, Providers, and Taxpayers
Significant cuts to Medicaid’s disability services would also have broad economic and public health repercussions. For one, denying or reducing care does not eliminate needs, but rather shifts the burden of ameliorating them elsewhere. Those who lose Medicaid coverage or benefits will still require medical attention and assistance, and in many cases, the responsibility will fall on emergency rooms and families. Because hospitals are legally required to treat anyone who shows up in an emergency, uninsured or otherwise financially unstable disabled individuals often end up in crisis care. Analysts project that OBBBA will cause uncompensated care costs for hospitals treating uninsured patients to rise by $83 billion over the next decade. At the same time, health care providers stand to lose around $1 trillion in revenue that would have been paid by Medicaid for patient care. This combination of more unpaid bills and less Medicaid reimbursement is dire for the health system. Providers, especially those who staff rural hospitals and clinics, could face severe financial strain. Medicaid is a financial lifeline for hundreds of rural hospitals, and many risk closure if large numbers of their patients lose coverage and can no longer pay for care. When hospitals absorb losses, they often pass costs along to privately insured patients in the form of higher prices, which drives up premiums and health care costs for everyone. Cutting Medicaid thus merely shifts costs to states, health providers, and the general public in the form of a hidden tax that manifests as higher medical bills and exorbitantly high insurance rates.
The Case for Preserving Medicaid’s Disability Supports
The various statistics, numbers, and data points presented are neither faceless nor nameless; to provide you with but one of millions, I share my sister Grace’s name. Grace is a young woman on the autism spectrum and a current Medicaid recipient. In addition to covering much of Grace’s medical care, Medicaid also allows her to live as independently as possible with the assistance of aides, therapists, and specialists. That a human being’s dignity, much less a member of a vulnerable population’s dignity, autonomy, and livability should be up for debate is reprehensible. As I am Grace’s only sibling, Medicaid is not merely a safety net for her, but a source of comfort for my parents and I. Should there exist a world in which Grace must fend for herself, Medicaid ensures that she will be able to access the healthcare and behavioral services she needs to survive and thrive, at least financially. Without it, Grace is at risk of abuse, neglect, institutionalization, or even homelessness or death.
Our legislators should instead be seeking to strengthen Medicaid’s long-term services and supports, not weaken or outright discard them. Proposals have been advanced to make HCBS a mandatory Medicaid benefit, such as putting home care on equal footing with nursing homes, to reduce waitlists, and to better pay the caregiving workforce. Medicaid enables millions to live with freedom and security, not to mention it spares society enormous hidden costs by providing care in the right place at the right time. As debates continue, it is crucial to recognize what is truly at stake: the health, independence, and basic rights of millions of Americans with disabilities, and by extension the integrity of our nation’s commitment to protect its most vulnerable members. Undoing or mitigating these cuts would not just uphold a budget line, it would uphold human dignity and sound public policy. The lives of those 15 million Americans with disabilities, just like Grace, and the well-being of their families, just like mine, hang in the balance.
Suggested Citation: Emma Quarequio, Slashing Spending and Survivability: Disabled Lives on the Line Post-One Big Beautiful Bill, Cornell J.L. & Pub. Pol’y, The Issue Spotter, (Feb. 1, 2026), https://publications.lawschool.cornell.edu/jlpp/2026/02/01/slashing-spending-and-survivability-disabled-lives-on-the-line-post-one-big-beautiful-bill/.
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