Changes to Medicaid in President Donald Trump’s “Big Beautiful Bill” are projected to have a negligible financial hit to Nevada’s program in the short term, but work requirements will eventually result in more than 100,000 people losing Medicaid coverage, according to a new estimate prepared by the state and obtained by The Nevada Independent.

The fiscal details prepared by Nevada Medicaid mark the first state-run estimates on the effects of the budget reconciliation bill signed into law earlier this month. The outcomes lessen the chances of an immediate special legislative session to deal with a Medicaid budget shortfall, though federal changes to other state agencies could prompt one.

“Nevada Medicaid does not anticipate needing any additional state funding requests to address changes under [“One Big Beautiful Bill Act” (OBBA)] for the current biennium,” Nevada Health Authority Director Stacie Weeks said in a statement. “Looking forward, [the state health department] is working on opportunities (many passed last session) that should help mitigate the impacts from OBBA to the state general fund.”

The analysis reveals a projected $60 million cost to the state for the joint federal and state insurance program over the next five years. 

The memo also shows that because the state will be spending less on Medicaid funding, there’s roughly $1.5 billion in federal matching funds that the state may not receive in the future. A large portion of these funds would have otherwise gone to Nevada private hospitals. 

State estimates also indicate that roughly 100,000 Nevadans — or 12.5 percent of Medicaid enrollees — could lose coverage in the first two years after work requirements are implemented in 2027 or two years later if the state applies for, and receives, a waiver. 

The two provisions within the so-called “One Big Beautiful Bill” that will affect Nevada Medicaid the most are the work requirements and reductions to the state’s provider tax program — a widely used “creative budgeting” maneuver through which states tax hospitals and return the dollars to them for Medicaid patient care, allowing them on paper to claim more spending on the insurance program and obtain more matching funds from the federal government. 

In the next two fiscal years, Nevada Medicaid indicates that the state will lose more than $830,000 across its share of Medicaid, children’s behavioral health funding and direct changes to the general fund — 0.004 percent of the agency’s budget for the upcoming budget cycle. 

But across fiscal years 2028 and 2029, the projected budget hit to the agency will be more than $59 million. The increase in cost likely stems from the work requirement implementation and reduction in state-directed payments that were subject to the state's insurance premium tax that contributes to the general fund.

Perhaps the most significant financial effects could be felt by private hospitals, which are likely to see a total of $600 million to $800 million in reductions in their supplemental Medicaid payments. Their base payments for services rendered to Medicaid recipients will remain the same. 

The estimates are far less than the initial projection of $1.9 billion in cuts in Nevada under the proposal by congressional Republicans, which was significantly scaled back after pushback across the country.

Addressing a rise in uninsured rates

Nevada is one of 40 states that opted into Medicaid expansion through the Affordable Care Act — and was the first to do so with a Republican governor. Medicaid expansion broadened eligibility to include adults younger than 65 with incomes up to 138 percent of the federal poverty level — $21,597 for individuals, as of 2025. 

Nevada’s uninsured rate, which was 22 percent in 2012, is now 8 percent — which state officials said was the lowest ever recorded.

Under the new federal law, starting in 2027, the so-called expansion population of able-bodied adults younger than 65 enrolled in Medicaid will need to prove they work, volunteer or attend school at least 80 hours per month, with states required to verify this twice a year. The law contains exemptions for pregnant women, people who are disabled and parents with dependent children who are 13 years or younger.  

The bill allows states to apply for waivers to delay implementation as long as there is a “good faith effort” to do so.

About 66 percent of all Nevadans enrolled in Medicaid are employed. National and local health care experts who spoke with The Nevada Independent said the work requirements will likely drive up the state’s uninsured rates, which could have ripple effects on the broader health care system and higher costs for health care providers.

KFF Executive Vice President for Health Policy Larry Levitt said in a media briefing last week that the work requirement provision generates the most savings for the federal government.

“The vast majority of these adults are either working or would qualify for an exemption, but millions are expected to lose coverage because they fail to navigate the reporting process,” Levitt said, noting many of the changes kick in after 2026 and “we’re not all going to wake up one morning and find millions more people uninsured.”

Weeks said changes made in the 2025 session put Nevada in the “best position possible” to navigate the shifting health care landscape, including splitting the former state health department into the Nevada Health Authority, which she said will leverage the state’s strength and buying power to get better deals for Nevadans.

The state will also try to implement work requirements in a way that helps people find and maintain employment and establish a Medicaid program to improve access to providers offering children’s behavioral health services.

Weeks said the federal budget bill outlines key changes but leaves the implementation specifics, including on waivers delaying work requirements for up to two years, to the federal Centers for Medicare and Medicaid Services (CMS).

“[Changes] must be outlined by CMS first before states can fully grasp the scale of the impacts,” Weeks said.

When implemented in Arkansas and Georgia, work requirements contributed to a significant drop-off in Medicaid enrollment. A KFF study found that more than 90 percent of Medicaid enrollees either met the work requirements or have a valid exemption, but the bureaucracy around documenting work and exceptions caused nearly a quarter of recipients in Arkansas to lose Medicaid coverage. 

Weeks said details on the future work requirements are going to be critical. Requirements will apply only to the adult Medicaid expansion population, which she said typically struggles to submit paperwork on time and maintain or find employment because of unstable housing, mental illness or substance use. 

Other changes coming to the state’s health care system could help lessen the blow.

Weeks noted that the state will soon implement a new state reinsurance program that “will help offset some of these increases that will be felt by consumers when enhanced federal subsidies expire,” referring to the expiration of subsidies in 2025 that lower premiums for Americans purchasing marketplace insurance plans. Health care experts have said the subsidies have significantly lowered premium costs for Americans and, if the enhancements expire, millions could see increased insurance costs and lose coverage as a result.

Reinsurance programs serve as a system that essentially works as insurance for insurance companies, paying a portion of high-cost claims and thus allowing insurers to lower the premiums for individual health insurance plans.

Weeks said the state is hopeful it can tap into a $50 billion fund set aside to aid rural hospitals, which have high proportions of Medicaid and Medicare patients and could be hard-hit by the changes.

Children’s behavioral health services

In Nevada, hospitals that have opted into the provider tax program will also see changes. Nursing facilities are exempted, but the bill will reduce existing provider taxes in Medicaid expansion states such as Nevada through an annually decreasing cap from the current level of 6 percent of net patient revenues to 3.5 percent by 2032. 

Originally, when matched with federal Medicaid funding, Nevada’s provider tax brought in $800 million per calendar year, with the state leveraging a portion of the funding to overhaul Nevada’s worst-in-the-nation children’s behavioral health system. Estimates show that children’s behavioral health funding is projected to have a loss of between $20 million and $30 million over the next five years.

The fiscal estimates from Nevada Medicaid said the changes to the supplemental payments generated through the provider tax “will not have a direct fiscal impact on the State General Fund, at this time,” and Weeks said Nevada Medicaid does not anticipate “noticeable funding changes” to the private hospital supplemental payment program until the 2028 fiscal year. 

“Nevada Medicaid expects some adjustments next session will be needed to update funding sources for certain services funded by the tax program today,” she said.

Weeks added that children’s behavioral health is a high priority for the governor, and Nevada Medicaid remains fully committed to ensuring the state can maintain its investments in the children’s behavioral health system.