On July 4, H.R. 1 -- Budget Reconciliation was signed into law, enacting sweeping federal changes to Medicaid, nutrition assistance, and health insurance Marketplace programs. Many provisions take effect later this year or sometime between 2026--2028 and will fundamentally reshape -- and, in many cases, eliminate -- how many Maine people access health coverage and food supports. Below is a high-level overview, drawing on our updated full Impact Summary (PDF) of the most significant changes and their implications for Maine people, providers, and our state budget.
MaineCare (Medicaid)
MaineCare covers nearly 400,000 Maine people -- enabling them to receive care ranging from preventive visits and behavioral health to long-term care and rural hospital services. The new federal law increases administrative burdens for people and for the State, tightens or eliminates eligibility, and restricts state options and increases financial risk for Medicaid financing, compromising the state's ability to ensure stable and adequate funding for the program.
- Work & Community Engagement (Effective Dec 31, 2026) Approximately 90,000 expansion adults must log 80 hours/month of work, volunteering, or be enrolled in at least a half-time educational program, or meet specific exclusion criteria. Maine anticipates 31,000+ disenrollments in year 1 due to documentation hurdles and other challenges, including the seasonal and unpredictable nature of many of Maine's heritage industries. The State will require one-time technology and staffing investments estimated at $8M in Fiscal Year 2027 (~$5.5M annually thereafter).
- Eligibility Redeterminations & Retroactive Limits (Effective January 1, 2027) Eligibility renews every six months (vs. annually), and retroactive coverage shrinks to one month for expansion adults and two months for all other MaineCare members, which will result in greater uncompensated care costs.
- Eligibility Changes for Certain Immigrant Groups (Effective Oct 1, 2026) Immigrants who have historically been eligible for full Medicaid nationally, including refugees, asylees, trafficking survivors, and certain parolees, lose Medicaid coverage--eliminating coverage for ~3,000 enrollees, except children and pregnant women who will continue to be eligible.
- Family Planning Funding (Effective as of July 4, 2025) A one year moratorium on Federal reimbursements for services provided by Planned Parenthood and Maine Family Planning went into effect upon enactment of H.R. 1 -- impacting ~5,900 members. State-funded abortion services will continue to be reimbursed. Note: impacted providers have filed legal action regarding this provision. Maine will closely track these proceedings and adjust implementation accordingly.
- Payment Error Rate Penalties (Effective Oct 1, 2029) Waivers of penalties to states restricted; scope of penalties increases, under enforcement of a 3 percent error threshold that most states do not meet (national average 5-6 percent). This is unpredictable and may cost Maine tens of millions of dollars annually, at a time when the risk for errors will increase with the implementation of numerous system changes required from H.R. 1.
- Provider Tax Moratorium (Effective as of July 4, 2025) No new or increased provider taxes, freezing Maine's hospital tax at 3.25 percent on 2022 revenues (~$178M/year) and risking ~$3B in lost tax revenues and federal matching funds over 10 years.
- Implications of Expansion Disenrollment for Broader Healthcare System Current expansion spending directs approximately $329M to hospitals, $70M to physicians/FQHCs, $50M to behavioral health, and $218M to pharmacies. Significant disenrollment of this population will result in a loss of revenue and increases to uncompensated care for these critical providers, and others.
Fiscal Impact: Tens of millions in added state costs for administration, verification systems, plus reduced federal funding, and increased uncompensated care for providers and healthcare premiums for Mainers -- an estimated $5.0 billion cost to MaineCare over a ten-year period.
SNAP (Nutrition Assistance)
SNAP helps over 176,000 Mainers afford groceries each month, and every dollar spent generates $1.54 in local economic activity. While many of the federal law's cost-shifting changes are slated for 2026-27, several provisions take effect over the next several months. The Office for Family Independence is advancing rulemaking and system upgrades to implement the reforms, though final timelines depend on technology enhancements and the public-comment process. Below is an overview of what is known thus far and what remains to be scheduled.
- Benefit Level Reductions (Effective Fall 2025, specific dates determined by rule) Changes to the Thrifty Food Plan will cut average household benefits by ~$26/month.
- Elimination of SNAP-Ed Grant (Effective October 2025) Maine loses $4.8M/year for nutrition education, which served 18,759 youth and 2,987 adults in 2024.
- Non-Citizen Eligibility Cuts (Effective Fall 2025, specific dates determined by rule) Removes eligibility for refugees, asylees, trafficking victims, and other lawfully present groups (~2,000 Mainers) and counts previously excluded local benefits as income.
- Expanded Work Requirements (Effective Fall 2025, specific dates determined by rule) Able-bodied adults without dependents (ABAWD) rules extend to adults ages 54-64 and parents of teens, ending exemptions for veterans (5,669 people), those experiencing homelessness (25,203), and former foster youth (505), and ending most rural geographic waivers (impacting ~2,000 recipients).
- Standard Utility Allowance Changes (Effective Fall 2025, specific dates determined by rule) Limits Heat & Eat automatic deductions to households with elderly/disabled members (980 households affected).
- Increased State Cost-Sharing (Phased-in between Oct 2026 and October 2027) Administrative match drops from 50 percent to 25 percent (+$6.6M/year), and states with error rates above 6 percent must cover up to 15 percent of benefits (+$53M/year), for a combined +$60M/year state obligation by FFY 2028.
Community Impact:Reduced benefits and access will strain local food pantries, retailers, and nonprofit partners and exacerbate food insecurity. The Department will notify the public of the expected implementation date of these changes and more information through a notice of proposed rulemaking. Impacted individuals will receive a notice the month prior to any decrease in benefits.
CoverME.gov (State-Based Marketplace)
CoverME.gov serves over 64,000 Mainers who do not have access to other forms of health coverage, including MaineCare, Medicare, and employer coverage. The new law and new federal regulation shorten enrollment windows, end many auto-renewal protections, and remove financial safeguards, risking coverage gaps and higher costs for consumers and the state.
- Enrollment Changes While H.R. 1 removes premium tax credit eligibility for anyone who enrolls in a coverage through a Special Enrollment Period for households with incomes less than or equal to 150 percent of the Federal Poverty Level (FPL), effective January 1, 2026, this type of income-based Special Enrollment Period is already prohibited through a recently finalized Centers for Medicare & Medicaid Services (CMS) rule effective October 24, 2025. In 2024, nearly 150 low-income Mainers enrolled in coverage through this Special Enrollment Period.
- Verification & Renewals Auto-renewals end (Effective January 1, 2028); all enrollees must re-verify income and household data under stricter timelines, heightening disenrollment risk.
- Removal of Repayment Caps (Effective January 1, 2026) Excess advance premium tax credit repayments become uncapped, exposing low-income and variable-income households to surprise tax liabilities.
- Immigration Status Restrictions (Effective January 1, 2026 for those who are in the 5-year waiting period for Medicaid; January 1, 2027 for the remaining immigration status impacts.) DACA recipients and most lawfully present immigrants lose premium tax credit eligibility, effectively pricing them out of coverage. Note, DACA recipients are no longer eligible for Marketplace coverage, effective August 25, 2025, per new CMS rule (see below for more info).
- CMS Final Rule (Finalized: June 20, 2025; Implementation Date: August 25, 2025, unless otherwise noted) Open Enrollment narrows to 63 days (effective Plan Year 2027), which is likely to reduce enrollment of new consumers and young, healthy consumers; stricter income discrepancy thresholds (10 percent vs. 50 percent), a 90-day resolution window (vs. 150 days), failure-to-reconcile penalties, and shortened enrollment further complicate access.
Consumer Impact:Likely declines in enrollment -- especially among young, healthy, rural, and immigrant populations -- undermining risk pools and driving up premiums.
Moving Forward: DHHS Initiatives & Guidance
Maine DHHS remains committed to minimizing disruptions and supporting Mainers through these changes. By leveraging data-driven analysis and stakeholder engagement, DHHS will provide clear direction and targeted resources.
- Publish Detailed Guidance: The full Impact Summary (PDF) offers in-depth methodology, data tables, and policy analysis.
- Open Rulemaking & Comment: The Department will revise state rules pursuant to the Maine Administrative Procedures Act, which provides an opportunity for consumers, providers, and advocates to comment.
- Expand Outreach & Education: Outreach materials are being updated, and DHHS is partnering with community organizations to help Mainers navigate new requirements.
- Advocate & Collaborate: Engagement with Maine's federal delegation is underway to secure clarifications, waivers, and funding flexibility.
DHHS is committed to implementing these new federal policy changes as seamlessly as possible, collaborating with community-based organizations to communicate impacts clearly, and providing timely, accessible guidance to affected Mainers before each change takes effect.