Will the new federal law cut my Medicaid rates, or help me with a new waiver?
The law does not set your personal care rates. States do. It freezes and then lowers some provider taxes, and it caps and steps down state-directed payments, which can squeeze state budgets from 2028. It also lets states add a new stand-alone HCBS waiver from July 1, 2028. States decide whether to use it.
Your rate comes from your state’s fee schedule or waiver manual, not from this law. In Georgia, the ICWP manual, for example, lists codes and rates in an appendix.
What OBBBA changes, based on published summaries:
- Provider taxes (Sec. 71115): taxes are frozen at current levels. For expansion states, the safe-harbor threshold drops 0.5 points a year starting in fiscal year 2028, down to 3.5 percent. Non-expansion states are capped at 6 percent.
- State-directed payments (Sec. 71116): new ones are capped near Medicare levels. Older ones step down by 10 percent a year starting in 2028.
- New stand-alone 1915(c) waiver (starting July 1, 2028): lets a state offer HCBS without a nursing-facility level of care test. The state must meet needs-based criteria, show wait times for other waivers do not grow, and show costs stay neutral.
These pressures act on state budgets. They may affect rates indirectly over time, but the summaries we read do not say how. Hospitals and nursing facilities feel provider-tax limits first.
For your own plan, keep an eye on your state’s budget news and your Medicaid agency’s rate notices.
Sources
- Summary of OBBBA (8 July 2025) · NASDDDS (secondary source)
- OBBBA Medicaid timeline (23 July 2025) · Grantmakers In Health (secondary source)
- Waivers - How To / Where (member and provider access) · Georgia Medicaid (GAMMIS)
Reviewed by Beth Bledsoe, Care Business Advisor®, 28 Oct 2026. Rules change. Confirm with your state Medicaid agency before you act.
Want to see where this is costing your agency money? Four minutes, your agency’s name on the answer.