How Bad Exactly is the Big Beautiful Bill for Ob/Gyns and Their Patients?

As an Ob/Gyn in Iowa, where hospitals are closing their Labor and Delivery units left, right, and center due to difficulty recruiting Ob/Gyns and financial losses, I was intensely interested in the details of this bill -- how it will affect Ob/Gyns and hospitals in our state? Since 40% of pregnancies nationally are covered by Medicaid, how bad will this bill be for us and our patients? 800 billion dollars in cuts to Medicaid over 10 years sounds quite bad, but it is also such a vast concept that it is hard to comprehend what it means for the actual practices trying to keep their doors open and the hospitals trying to stay solvent.

The New York Times published a helpful, nuts-and-bolts breakdown of where the cuts are coming from . I will try to apply this to our actual practices and the hospitals we serve. If you really want to get deep into the source material, here is the link to the CBO report. All estimates are over the next 10 years.

Overall, the upshot of this bill is that many Ob/Gyn patients who have Medicaid now will be able to stay on Medicaid, but the increase in paperwork to make sure everybody has coverage is going to be massive, and a lot of visits will fall through the cracks. Some women will simply lose Medicaid coverage completely. Physician practices and hospitals are simply going to be providing a lot more free coverage (because the paperwork to get reimbursed is so much more complex, much of the care we provide will simply have to be written off as a loss) and hiring more staff to process the paperwork, which is an added expense. At the same time, certain cash infusions that have kept many rural hospitals afloat will be decreased. In general, practices and hospitals that are not profitable now are likely to close or cut back services.

Pregnancy care is exquisitely time sensitive. All of a fetus’ organs are completely formed by 12 weeks of pregnancy. The time to intervene to ensure a healthy pregnancy is the first trimester. Patients cannot wait three months to get their Medicaid paperwork sorted out before being seen if they are already 8 weeks pregnant. Before this bill, we could bring patients into our offices right away when they called with a new pregnancy, even if they didn’t have Medicaid but they were low income and we were pretty sure they would qualify. Once they got on Medicaid, we could retroactively bill for up to 3 months of care. H. R. 1 would change 3 months of retroactive billing to 1 month. Trust me, one month is not enough time to deal with the government agency paperwork, especially now that it is exponentially increased via this bill.

Almost no Ob/Gyn practices or hospital services are profitable now. They are running on the tightest of margins or else are money-losers and are subsidized by other, more profitable services. The people who run them get migraines every month looking at the numbers and trying to figure out how to stay open. They are one 62-year-old Ob/Gyn’s retirement away from having no viable path forward. The services that are most profitable for hospitals and physician practices are generally orthopedic surgery, cardiovascular surgery, and interventional cardiology. Hospitals are already making plans to divert resources to these services and away from Ob/Gyn to stay afloat. (You don’t really read news articles about protests because a hospital’s orthopedics unit is closing.)

As Ob/Gyn units and practices close, there will likely be an influx of Ob/Gyns into the locums labor pool. (Many Ob/Gyns who cannot work locally anymore but do not want to move their family commute to another city for several days at a time to cover Labor & Delivery shifts. In fact, I am currently commuting 145 miles one-way to my job.) This may decrease wages for locums Ob/Gyns. All Ob/Gyns right now should familiarize themselves with the pitfalls of locums work and how not to be exploited by the locums companies, who are voracious venture capital monsters. I recommend starting here: FlexMedStaff | Physician Career Support & Placement Services. I also think that the few Ob/Gyn private practices left will almost exclusively stop accepting Medicaid.

While I can’t predict the future, after poring over the details of this bill, I am worried about our profession and our patients.

That being said, let’s get down to brass tacks, shall we? These are the biggest changes to Medicaid and how they will affect Ob/Gyn patients:

Work requirements:  childless adults and parents of children older than 13 must work, volunteer, or attend school for 80 hours per month, unless they qualify for an exception, with includes a “serious medical condition” (Savings of $317 billion)

Most OB patients either have young children or work. But not all do. There are also patients who struggle with addiction or other serious mental illness and are unable to work – but these patients may qualify under “serious medical conditions.” Likewise, patients who have to be off work for their high-risk pregnancies should qualify for an exception. In general, anybody who is planning to have and raise a child should be able to work or volunteer 20 hours per week if they don’t already have kids. The baby is going to be way more work than that. Trust me. So I don’t think our patients will lose Medicaid very often under this provision – the paperwork is just going to be insane and result in more staff time filling it out and more unreimbursed care because somebody filled out the paperwork wrong. This goes into effect December 31, 2026.

Decrease in state-directed payments for Medicaid to hospitals (Savings of $149 billion)

This is huge. In Iowa alone, in the current fiscal year, the government gave $2.08 billion in extra Medicaid payments to Iowa hospitals under this program to keep them solvent. This is how many Iowa hospitals were able to keep their Labor and Delivery units open and hire Ob/Gyn hospitalists to keep their exhausted full-scope Ob/Gyns from quitting en masse. This provision takes effect now.  Current rates just expired on June 30, 2025, so I assume these cuts start now. There is a $50 billion provision in H.R. 1 for support for rural hospitals, so hopefully that will offset the cuts somewhat.

Many hospitals rely on these payments to keep going. Money-losing services like obstetrics will be the first to go when they have to make cuts. Once the Ob/Gyns, the midwives, and the labor nurses move out of town… you can’t just change your mind and decide to open a Labor and Delivery again. The people who would have worked there will already be gone.

States must check patients’ eligibility for Medicaid every 6 months instead of every 1 year (Savings of $58 billion)

This sounds like a bureaucratic nightmare. Medicaid patients will have to fill out forms every 6 months to stay on Medicaid. This will be disastrous for Ob/Gyns, since inevitably this paperwork will not be completed or processed correctly with some frequency. Pregnancy lasts longer than six months. Once we have seen a pregnant patient, we cannot dismiss them from our practice in the third trimester – this is considered patient abandonment. We will continue to see these patients and deliver their babies, but we will not be paid for these services if they have lost their Medicaid. I assume most practices that can will stop taking Medicaid, because this is a quick recipe for going out of business.

Decreased Medicaid emergency payments for immigrants (Savings of $28 billion)

Many low-income immigrants are not eligible for Medicaid the way American citizens are. However, being human, they have medical emergencies, and wanting to survive, they do come to hospital emergency departments for medical emergencies. Hospitals are legally and ethically required to provide emergency care that is more expensive than these patients could have any hope of paying for, and so to prevent bankrupt hospitals, Medicaid has traditionally covered true medical emergencies for these immigrants. One of the more common emergencies immigrants not eligible for Medicaid face is childbirth. Hospitals will continue to take care of these patients, and the on-call Ob/Gyn will still come in to take care of them. They just won’t get paid, leading to more financial instability and closures.

Limiting Medicaid for noncitizen immigrants to green card holders (Savings of $6.2 billion)

 As above, these women are not going to have fewer babies. However, if they lose their Medicaid, they will forego prenatal care, putting themselves and their babies at risk, and they will still be delivered in U.S. hospitals by U.S. doctors – the hospitals and doctors will simply not be reimbursed for the care they provide.

Limiting retroactive Medicaid coverage from 3 months to 1 month (Savings of $4.2 billion)

This is awful for Ob/Gyns and their patients. As above, pregnancy is exquisitely time-sensitive. When new patients seeking care call with a pregnancy problem, they often need to be seen immediately – not when their Medicaid can be established. I cannot tell you how many patients I have seen with the insurance status of “presumptive Medicaid.” That means that they needed to be seen, so I saw them, and we assumed they were eligible for Medicaid, so we go the paperwork going, and as soon as they were approved we could bill for the past 3 months of care provided. (I am talking about emergent patients here – if it wasn’t an emergency, it would take 3 months to get in to see me in the first place.) Three months is a reasonable time frame to get somebody on state insurance and work out the paperwork hassles. We usually got reimbursed. With the reduction in eligibility, hospitals and doctors will be providing more unreimbursed care – and no office practice will ever be willing to bring a patient who doesn’t have their Medicaid established. They will be directed to the nearest emergency room.

Fewer hospitals delivering babies, fewer Ob/Gyn practices, fewer Ob/Gyns delivering babies

Ultimately, Ob/Gyn will be among the hardest-hit fields of medicine. This is because the care we provide is not optional or elective, and pregnant women do not seek care primarily for their own benefit, but to keep their babies safe – one of the strongest drives a human being has. A woman who is worried about not being able to pay her medical bills may stay home through searing headache or abdominal pain and hope for the best if she’s just worried about herself, but she will not risk the life of her baby. And when she comes to the hospital, the on-call Ob/Gyn and labor nurses will still take care of her, even if they can be sure they won’t get paid. That is the law.

But there is no more fat to cut in their budgets or their lives. My own private practice went out of business in the relative halcyon days of 2018. 42 Iowa hospitals have closed their Labor and Delivery units since 2000, and many others are hanging on by a thread.

More practices and hospital labor units will close. I don’t know how many. Many will be rural. Some will be in cities. Some Ob/Gyns who lose their jobs will move their families and start over somewhere new. Some will choose to commute long-distance, working part-time as a sort of temp doctor called a locums tenens. Some of us will start telehealth practices focusing on menopause and weight loss. Some of us will retire, maybe to a new career. As Ob/Gyn services consolidate in fewer locations, I imagine that a few winning locations will actually attract more physicians and have better services. But the number of places where women can deliver a baby safely will be fewer and farther between.

My recommendation for all Ob/Gyns is to prepare for the possible closure of their practices or hospitals and have a Plan B. Remember that you do not need to work yourself to death for free to keep your local labor unit open. You did not create this situation, and you alone are not responsible for fixing it. If you do not see a viable path forward for keeping your practice or department open, you are allowed to stop. Try to divest your personal identity from your job. Consider what it would be like to commute to a different state for a week at a time to support your family. Don’t move just for a job – that job may be the next to go.

Thank you all for your service, and I wish you all the best.

Sincerely,

Dr. Karla Solheim, MD, FACOG