The One Big Beautiful Bill (OBBB), signed into law in early July, represents one of the most comprehensive pieces of federal legislation we’ve seen in years. It combines tax changes with significant reforms to public benefits programs, particularly Medicaid. While the bill’s full impact will unfold over time, it’s clear that older adults, individuals with disabilities, and families who depend on Medicaid and ABLE accounts will face meaningful changes.

Medicaid: New Hurdles and Reduced Safety Nets

The OBBB introduces restrictions and procedural requirements that may result in coverage losses; not because people no longer qualify, but due to increased administrative burdens and access challenges.

  • More Frequent Reviews: Instead of annual eligibility reviews, Medicaid recipients will now face redetermination every six months. This means more paperwork, tighter deadlines, and a higher risk of coverage lapsing due to procedural missteps.
  • Work Requirements Expand: Many Medicaid recipients between the ages of 50 and 64 will need to document at least 80 hours of work, volunteer activity, or education per month. Even those exempt due to age or health conditions must submit documentation proving their exemption status.
  • Shorter Safety Window: Previously, Medicaid could provide coverage retroactively for up to 90 days before application. This protection period is now reduced to 60 days, leaving families more financially vulnerable during health care crises.
  • Long-Term Care Impact: Expected funding reductions may affect nursing home reimbursements and Home and Community-Based Services (HCBS) programs, which help older adults remain in their homes rather than requiring institutional care.

ABLE Accounts

The legislation includes several beneficial changes for individuals with disabilities who use ABLE accounts to save without jeopardizing benefit eligibility:

  • Permanent Enhancements: The ABLE-to-Work provision becomes permanent, allowing eligible working individuals to contribute above standard annual limits based on their earnings.
  • Education Savings Integration: Tax-free rollovers from 529 education plans into ABLE accounts are now permanently permitted.
  • Enhanced Tax Benefits: ABLE contributions permanently qualify for the Saver’s Credit, with the annual contribution eligible for this credit increasing to $2,100 starting in 2027.
  • Future Growth Potential: Provisions included may lead to increased annual contribution limits in the coming years.

Nursing Home Staffing

The legislation sends conflicting signals about nursing home quality and oversight:

  • Reduced Federal Standards: The bill explicitly prevents the federal government from enforcing minimum staffing ratios or national mandates for nursing care hours per resident. This reverses previous efforts to strengthen staffing requirements, potentially affecting care quality in already understaffed facilities.
  • Transparency Preserved: Public access to facility information remains robust. Nursing homes must continue to report ownership structures (including private equity connections), daily staffing levels, job roles, and the use of temporary workers.

The Bottom Line: Families will have better visibility into nursing home operations, but potentially fewer protections regarding adequate staffing. This makes thorough facility research and persistent advocacy more critical than ever.

Estate and Gift Tax: A Permanent Change

For families with significant assets, the OBBB includes an essential update to federal estate and gift tax exemptions. The legislation permanently increases the lifetime exemption to $15 million per person ($30 million for married couples) beginning in 2026, up from the current $13.99 million. This amount will continue to be indexed for inflation.

This change eliminates the uncertainty many families faced regarding potential exemption reductions that were scheduled to take effect at the end of 2025. The permanent nature of this increase provides greater predictability for estate planning strategies and removes the pressure of year-end planning deadlines that have characterized recent years.

For local families with substantial assets, this change may create new opportunities for wealth transfer strategies and charitable planning. However, the best approach will depend on your specific circumstances and family goals.

Why Proactive Planning Matters More Now

These changes underscore the importance of thoughtful, early planning. The new landscape may make it easier to lose Medicaid coverage through administrative complications, making preparation essential.

With that said, if you or a loved one has been diagnosed with a physical or cognitive condition, now is the time to develop a comprehensive care and financial strategy.

For current Medicaid recipients, prepare for more frequent eligibility reviews by organizing necessary documentation and understanding new requirements.

For families concerned about long-term care, consider how asset protection and care planning strategies may need to be adjusted in light of these regulatory changes.

Moving Forward Together

At our firm, we understand that each family’s situation is unique. These federal changes will affect everyone differently, and we’re committed to helping you know what they mean for your specific circumstances.

We’ll continue to monitor developments, updating our clients as information becomes available, and adjust our planning strategies to meet evolving challenges. Our goal remains the same: helping families prepare for successful futures, regardless of what regulatory changes may come.

If you’d like to discuss how these changes might affect your family’s planning, we invite you to contact us to schedule a consultation.