The Impact of the One Big Beautiful Bill Act on Individuals with Disabilities August 28, 2025

July 17, 2025

Written by Joe O’Sullivan, Director of Public Policy and Advocacy

The One Big Beautiful Bill Act (OBBBA) was signed into law by President Trump on July 4th and could jeopardize access to home and community based services (HCBS) for individuals with intellectual and developmental disabilities (I/DD).

While there are no direct cuts to HCBS or any benefits provided to individuals with I/DD in this bill, the cuts included in OBBBA will have a downstream effect which will force states to make cuts to Medicaid services. As HCBS are technically non-mandatory, there are at a heightened risk of being cut.

Imposing further restrictions on access to Home and Community-Based Services (HCBS) threatens the essential supports that individuals with intellectual and developmental disabilities (I/DD) rely on daily. These cuts will result in poorer outcomes and diminished quality of life. We are committed mitigating the harmful impacts of OBBBA’s budget reductions and will continue to advocate fiercely to preserve these vital services.

Here is what you need to know:

Unprecedented Cuts to Medicaid

Under OBBBA, federal Medicaid spending will be cut by approximately $1 trillion dollars over the next decade. The magnitude of this cut to Medicaid is unprecedented and will lead to millions losing health insurance, a significant regression in Medicaid services, and the elimination of some Medicaid programs altogether.

Medicaid is critical for funding services for individuals with I/DD such as community living options, personal care assistance, supported employment, community day services, and much more. These services empower individuals with I/DD to live meaningful lives as members of their communities, and are essential to their daily lives and well-being. Unfortunately, OBBBA’s cuts to Medicaid jeopardize access to these services, and could disproportionately harm individuals with I/DD.

State-Level Cuts

OBBBA’s massive spending cuts will strain the overall budget for Medicaid, forcing states to cut services. Medicaid is a robust funding mechanism for many essential services such as long term care facilities, hospitals, prescription drug coverage, behavioral health services, HCBS, and more. OBBBA puts all of these services at risk of cuts on the state level.

Illinois will lose billions of Medicaid dollars in the coming years due to OBBBA, and will have to reduce or cut some areas of Medicaid spending to make up for the loss. While individual states are responsible for deciding what to fund or cut, we are committed to ensuring that Home and Community-Based Services (HCBS) for individuals with intellectual and developmental disabilities (I/DD) are not among the programs reduced. We will continue to advocate strongly to protect these essential supports from being targeted during Medicaid budget decisions

Heightened Administrative Burden

Under OBBBA, Medicaid recipients will be required to fulfill 80 hours per month of work or community service and Medicaid redetermination will be required every 6 months instead of annually. While individuals with I/DD are exempt from the work requirements, the more frequent redetermination could cause individuals to lose benefits.

Medicaid redetermination often takes months to complete, and is often delayed for reasons such as system error, some missing or incomplete information, or even just a large backlog of cases. The Medicaid system can be difficult to navigate and due to the amount of documentation required, administrative errors are fairly common. The heightened administrative burden of more frequent redetermination would not only cause undue stress on individuals with I/DD and their families, but could cause many to accidentally lose Medicaid benefits altogether.

Longer Waitlists

The HCBS system is actually in need of significant expansion in order to meet the current demand for services. In Illinois, more than 16,000 individuals with I/DD are un-served residing on a waiting list for services, and thousands more are under-served. Nationally, about 700,000 individuals with I/DD are on a waitlist for services.

OBBBA will force states to cut Medicaid funding which will reduce available service options for individuals with I/DD, so these waitlists are likely to grow even larger. Already, hundreds of thousands of Americans with disabilities cannot access the services which they need. OBBBA will not only prevent these individuals from attaining services, but many more will join them as they wait, often years, for essential services and supports.

Risk of Institutionalization

State institutions are far from an ideal setting to serve most individuals with I/DD, and according to the Olmstead Supreme Court decision, they violate the rights of individuals with I/DD when a community setting is appropriate. They are often overly-restrictive, segregated from the community, and are much more costly than HCBS. Some estimates show that it costs 3 times as much to serve an individual in an institution as opposed to a community setting.

OBBBA’s Medicaid cuts will restrict service options for individuals and families seeking services, leaving them with a difficult decision. They would either have to exit the workforce to provide unpaid family care for their loved one with I/DD or admit them into an institution. Not only will this increased institutionalization lead to lower freedom and quality of life for individuals with I/DD, but ironically it will cost taxpayers 3 times as much than it would if community service options were available.

Where Do We Go From Here?

Although OBBBA has been signed into law, the cuts to Medicaid will not go into effect until 2026 or 2027. This affords time for the federal and state governments to complete the lengthy rulemaking process providing direction on implementation and for states to begin planning on how they will adjust their individual Medicaid programming to account for the massive funding loss.

Over the past several years, the state of Illinois has finally begun to make long-overdue investments to bolster HCBS in Illinois. We deeply appreciate being recognized as a priority by Governor Pritzker and are proud to have earned strong bipartisan support in the General Assembly. With OBBBA’s massive Medicaid cuts looming in the near-future, that support will be tested and we will need it more than ever to protect individuals with I/DD.

We must make our voices heard and advocate for assurances that individuals with I/DD and HCBS will be protected from cuts. Any further cuts to a system already failing to meet the needs of Illinoisans with disabilities would be disastrous and must be prevented at all costs.

Difficult decisions will have to be made and Medicaid services will be cut to some degree, but individuals with I/DD have waited too long and fought too hard to suffer yet another setback. Caring for this vulnerable population should be a basic function of our government and we will fight to ensure that individuals with I/DD have access to services they depend on every day. Be sure to keep an eye out for our campaign to protect I/DD services in the coming months where you can make your voice heard!

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