H.R. 1 impacts on Washington state people and budget

Limits eligibility for Medicaid or CHIP to citizens, lawful permanent residents, certain Cuban and Haitian immigrants, Citizens of the Freely Associated States (COFA migrants) lawfully residing in the United States, and lawfully residing children and pregnant adults in states that use the ICHIA option (the Legal Immigrant Children’s Health Improvement Act, S. 764).

Agency: HCA, DSHS

Washingtonians Impacted: 30,000

Annual State Funding Impact: unknown at this time

Effective Date: Oct. 1, 2026

State Fiscal Year: FY27

Requires “community engagement” requirements (at least 80 hours/month) for all able-bodied adults without dependents (the Medicaid expansion population); certain enrollee groups are exempted – for example, individuals with a debilitating mental health condition (which will be defined later via rule/CMS guidance). Allows the HHS Secretary to exempt states from compliance with the new requirements up to 2 years, if the state is demonstrating a good faith effort to comply and submits progress in compliance or other barriers to compliance.

Agency: HCA

Washingtonians Impacted: 200,000 – 250,000 enrollees

Annual State Funding Impact: unknown at this time

Effective Date: Jan 1, 2027

State Fiscal Year: FY28

Requires “community engagement” requirements (at least 80 hours/month) for all able-bodied adults without dependents (the Medicaid expansion population); certain enrollee groups are exempted – for example, individuals with a debilitating mental health condition (which will be defined later via rule/CMS guidance). Allows the HHS Secretary to exempt states from compliance with the new requirements up to 2 years, if the state is demonstrating a good faith effort to comply and submits progress in compliance or other barriers to compliance.

Agency: HCA

Washingtonians Impacted: unknown at this time

Annual State Funding Impact: unknown at this time

Effective Date: Jan 1, 2027

State Fiscal Year: FY28

Under current law, states are required to provide Medicaid coverage for qualified medical expenses incurred up to 90 days prior to the date of application for coverage. H.R. 1 Limits retroactive coverage to one month prior to application for coverage for expansion enrollees and two months prior to application for coverage for traditional enrollees.

Agency: HCA

Washingtonians Impacted: unknown at this time

Annual State Funding Impact: unknown at this time

Effective Date: Jan 1, 2027

State Fiscal Year: FY28

Cost-sharing for Medicaid Expansion enrollees who are between 100% and 138% of the federal poverty level – cost-sharing would be capped at $35 per service for emergency services but can be over $35 for non-emergency services or 5% of income.

Agency: HCA

Washingtonians Impacted: 78,000

Annual State Funding Impact: unknown administrative cost impacts to the state and to health care providers

Effective Date: Oct 1, 2028

State Fiscal Year: FY29

Reductions in federal match for the Alien Emergency Medical program – moving from 90% to a 50% federal match. No impact on Washington as the state’s current federal match rate for this program is 50%.

Agency: HCA

Washingtonians Impacted: none

Annual State Funding Impact: none

Effective Date: Oct 1, 2026

State Fiscal Year: FY27

Reduces the maximum home equity limits to $1 million regardless of inflation but allows states to apply different requirements for homes located on farms. The current maximum limit is $1,097,000 and is adjusted annually for inflation. This will impact recipients in high-cost housing areas, creating a barrier to accessing Medicaid Long-Term Services and Support without first reducing equity in their homes.

Agency: DSHS

Washingtonians Impacted: unknown at this time

Annual State Funding Impact: unknown at this time

Effective Date: Jan 1, 2028

State Fiscal Year: FY28

Hospital Safety Net Program: Washington’s hospital safety net is a state directed payment* that is funded by assessing fees on non-UW hospitals to generate revenue, which is used to raise hospital reimbursement rates and save state dollars.

Agency: HCA

Washingtonians Impacted: unknown indirect impact to Washingtonians

Annual State Funding Impact: impact phases in: up to $226 million loss of state savings per year
(up to $1.3 billion per year impact to hospitals)

Effective Date: Jan 1, 2028

State Fiscal Year: FY29

* State directed payments (SDP) are a mechanism to ensure a specified reimbursement rate or investment be made directly to providers. Sometimes these are connected to provider tax programs but not always. Provider taxes are fees or taxes that states levy on healthcare providers to help fund their Medicaid programs. These taxes, typically imposed on hospitals, nursing homes, and managed care organizations, generate revenue that is often used to increase payment rates to providers. H.R. 1 reduces the total payments by 10% annually until the payment matches Medicare rates.

UW State Directed Payment: The UW state directed payment is similar to the Hospital Safety Net, but for hospitals in the University of Washington Medical System.

Agency: HCA

Washingtonians Impacted: unknown indirect impact to Washingtonians

Annual State Funding Impact: $330 million per year

Effective Date: Jan 1, 2028

State Fiscal Year: FY29

Prohibits the federal government from implementing, administering, or enforcing the minimum nursing home staffing requirements set by the Biden Administration in 2024 or the 2023 final rule regarding eligibility and enrollment in Medicare savings programs until FFY35.

Agency: DSHS

Washingtonians Impacted: unknown indirect impact to Washingtonians

Annual State Funding Impact: unknown at this time

Effective Date: July 4, 2025 (until FFY35)

State Fiscal Year: FY26

One year prohibition on Medicaid payments to nonprofit health care providers that serve predominantly low-income, medically underserved individuals (i.e., essential community providers) if the provider (1) primarily furnishes family planning services, reproductive health, and related care; (2) offers abortions in cases other than that of rape, incest, or life-threatening conditions for the woman; and (3) in FY2023, received federal and state Medicaid payments totaling more than $800,000.

Agency: HCA

Washingtonians Impacted: none

Annual State Funding Impact: $11 million per year

Effective Date: July 4, 2025

State Fiscal Year: FY26

The Rural Health Fund provides $50 billion for state grants over 10 years (DC and the U.S. territories cannot apply). Half ($25 billion) will be distributed by CMS “equally among all states with an approved application.” CMS will have discretion on how to distribute the additional $25 billion. There are a number of requirements for how states choose to distribute funding – states will be required to include at least 3 of these requirements, all subject to approval by CMS.

Agency: HCA

Washingtonians Impacted: unknown indirect impact to Washingtonians

Annual State Funding Impact: +$100 million per year (potential grant to WA)

Effective Date: Oct. 1, 2025

State Fiscal Year: FY26 (could receive funds beginning in FY26 or FY27)

Specifies that if a person is denied or disenrolled from Medicaid due to work requirements, they are also ineligible for subsidized Marketplace coverage. Individuals who are disenrolled from Medicaid due to work requirements, will not be able to purchase coverage on the Exchange and will just be uninsured until the next open enrollment period in the Q4 of every year.

Agency: WAHBE, HCA

Washingtonians Impacted: 200,000 – 250,000

Annual State Funding Impact: unknown at this time

Effective Date: Jan. 1, 2027

State Fiscal Year: FY27

HR 1 combined with other regulatory changes issued concurrently by the Trump administration shrink enrollment primarily by making it harder to enroll, as well as limiting immigrant eligibility. The law also ends automatic reenrollment and instead requires people to reverify information on their application for coverage annually even when no changes have occurred. Additionally, while their information is verified, applicants will owe the full undiscounted premium. WAHBE estimates that premiums on the exchange may increase overall by 15% to 21% due to these changes and other expiring subsidies.

Agency: WAHBE

Washingtonians Impacted: 85,000 – 142,000 (enrollees likely not to retain coverage)

Annual State Funding Impact: unknown at this time

Effective Date: Jan. 1, 2027

State Fiscal Year: FY27

A new 1915(c) waiver option allows states to offer HCBS without requiring that they provide institutional level of care, but only if waiting lists for existing services are not extended.

Agency: DSHS

Washingtonians Impacted: unknown at this time

Annual State Funding Impact: unknown at this time

Effective Date: July 4, 2028

State Fiscal Year: FY29

For new borrowers, HR 1 eliminates all current repayment plans and replaces them with just two: a standard plan and a new income driven repayment (IDR) plan called the Repayment Assistance Plan (RAP). The standard plan sets level “mortgage-style” payments over an amortization period of 10 to 25 years, depending on the borrower’s initial balance. The new RAP varies payments with income. It sets a minimum monthly payment of $10, which is binding on only the lowest-income borrowers. For other borrowers, payments are a set percentage of income: 1 percent for borrowers earning between $10,000 and $20,000, 2 percent for borrowers earning between $20,000 and $30,000, and so on up to 10 percent for borrowers who earn more than $100,000.

Agency: N/A

Washingtonians Impacted: 390,000 Washingtonians in income driven repayment plans and forbearance

Annual State Funding Impact: unknown at this time (individuals will have increased monthly payment under the new RAP)

Effective Date: New borrowers: July 1, 2026 / All borrowers must transition by: July 1, 2028

State Fiscal Year: New borrowers: FY27 / All borrowers must transition by: FY29

HR 1 introduces new annual loan limits for parents of undergraduates and graduate students. Parents of undergraduate students may borrow $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student. Loan limits will greatly impact students in the state for those enrolled in professional programs, or in higher cost master’s programs. These students will eventually need to pursue alternate loan funding with the elimination of GRAD PLUS (see below), and reductions to annual/aggregate direct loan limits.

Agency: N/A

Washingtonians Impacted: 79,000 Washingtonians with over $1 billion in federal loans

Annual State Funding Impact: unknown at this time

Effective Date: July 1, 2026

State Fiscal Year: FY27

H.R. 1 eliminates the Graduate PLUS loan program. These loans are intended for graduate or professional students to cover educational costs beyond what is available through other federal loans.

Agency: N/A

Washingtonians Impacted: 7,000 graduate students

Annual State Funding Impact: none

Effective Date: July 1, 2026

State Fiscal Year: FY27

All parents (combined) may borrow $20,000 per year per dependent student and a $65,000 aggregate limit per dependent student (without regard to amounts forgiven, repaid, canceled, or discharged)

Agency: N/A

Washingtonians Impacted: 8,000 students

Annual State Funding Impact: none

Effective Date: July 1, 2026

State Fiscal Year: FY27

HR 1 creates a new Workforce Pell Grant program. Eligible programs must be 150-600 hours and run at least 8 weeks but fewer than 15 weeks. Programs must lead to a “portable, stackable” credential across more than one employer or prepare students for entry level employment for which there is only one recognized postsecondary credential.

Agency: N/A

Washingtonians Impacted: unknown at this time

Annual State Funding Impact: unknown at this time

Effective Date: July 1, 2026

State Fiscal Year: FY27

Creates a new accountability measure that will cause a program to lose Direct Loan eligibility if it fails the “low earnings outcomes” measure 2 out of 3 years. Compares earnings for graduate and undergraduate program graduates to peers without degrees.

Agency: N/A

Washingtonians Impacted: unknown at this time

Annual State Funding Impact: unknown at this time

Effective Date: July 1, 2026

State Fiscal Year: FY27

Creates graduated investment income excise tax rate, ranging from the current 1.4% up to 8%, based on the institution’s per-student endowment. Only applies to private institutions. In Washington, Whitman College is the only institution subject to this tax.

Agency: N/A

Washingtonians Impacted: none

Annual State Funding Impact: none

Effective Date: Dec. 31, 2025

State Fiscal Year: FY26

Rescinds the unobligated balances of specific Inflation Reduction Act grants and programs aimed at increasing clean energy, alternate fuels, low-carbon materials, environmental and climate justice, equity, polution reduction and environmental protection.

Agency: N/A

Washingtonians Impacted: unknown at this time

Annual State Funding Impact: unknown at this time

Effective Date: July 4, 2025

State Fiscal Year: FY26

Tax incentives for renewable energy under the IRA will have a phased reduction, starting in 2026. Wind and solar projects may still qualify for the tax credits if they begin construction within the next 12 months (July 5, 2026) or come online by the end of 2027. The clean hydrogen tax credit terminates for projects that begin construction after 2027. Non-solar and wind technologies (e.g., storage, hydropower, and geothermal) will also have phased down tax credit schedules, but at a much slower pace, beginning in 2034. Additionally, advanced manufacturing tax credits are terminated on a phase-out schedule, beginning in 2028 with the credit for wind components.

Agency: COM

Washingtonians Impacted: unknown clean energy jobs

Annual State Funding Impact: unknown at this time

Effective Date: phased beginning July 5, 2026

State Fiscal Year: FY27

Completely removes all federal electric vehicle purchase incentives. Beginning in October 2025, it will be more expensive for Washingtonians to purchase electric vehicles.

Agency: N/A

Washingtonians Impacted: unknown at this time

Annual State Funding Impact: unknown at this time

Effective Date: Sept. 30, 2025

State Fiscal Year: FY26

Credits for residential clean energy (i.e., a 30% credit for solar panels, battery storage, and heat pumps) will terminate at the end of 2025. Credits for home energy efficiency improvements will phase out beginning at the end of 2025.

Agency: N/A

Washingtonians Impacted: unknown at this time

Annual State Funding Impact: unknown at this time

Effective Date: Dec 31, 2025

State Fiscal Year: FY26