What does the Medicaid HCBS Expansion in the OBBB Act actually do?

What the New Medicaid Law Actually Means for Families

Tucked inside the new “One Big Beautiful Bill” law is a provision originally called the Helping Communities with Better Support (HCBS) Act. It gives states some interesting new powers and responsibilities. So, what does this mean for your family, especially if you’re caring for a child or adult with significant disabilities who needs around-the-clock support? Here’s a breakdown in plain language.

What the new law changes:

It lets states create new kinds of HCBS waivers for people who don’t meet an “institutional level of care.”

Until now, Medicaid only covered home and community-based services for people whose care needs meet the “institutional” level. That means they qualify to live in a nursing home, intermediate care facility, or other institutional setting. This new law allows states to apply for a waiver to serve people with needs that fall below that institutional level. The new idea is to provide home and community-based services for people who still need a good deal of help but whose needs aren’t significant enough to qualify for institutional care.

It requires states to prove these new waivers won’t harm those already eligible.

The law says that if a state wants to open this new non-institutional level waiver category, it must show that adding more people won’t increase the average waiting list time for those who qualify for institutional care. That means kids and adults who are already eligible for waivers shouldn’t see their wait lists get longer because someone with a lower level of care “jumped the line.”

It forces states to be more transparent with their waiver data.

The new law says states must report every year on:

• The costs of the services, broken down by type (personal care, therapies, etc.)

• How long people actually receive each kind of service

• How those costs compare to institutional care

• The total number of people served

It allows up to 60 days of immediate home and community-based care.

States will have the option to give newly eligible people up to two months of home and community-based services right away under an interim plan so they’re not left waiting without care while their long-term service plan is finalized.

What the new law does not do

Despite some scary social media posts to the contrary, this new law does not “slash” existing HCBS waiver funding or rip away waivers from people who currently have them. It also doesn’t change the federal matching rate (FMAP) for states.

The law does contain deep cuts to Medicaid, primarily targeted at recipients other than those who access HCBS waivers, such as low income adults without institutional care level disabilities.

Bottom line

If your loved one already qualifies for an HCBS waiver because they meet an institutional level of care, this new law does not take that away. As always, HCBS waivers are optional and states can choose to end them at any time, so it's a good idea to follow the news and offer testimony if your state announces plans to take away HCBS waiver services and switch to institutional care.

Note to Ohio readers: Ohio has not announced any plan to end all waivers as of July, 2025, and has not cut waivers in its most recent budget bill. Ohio's most significant action to cut Medicaid for people with developmental disabilities so far has been to pursue creating an electronic asset monitoring system to identify people to remove from Medicaid if their assets go above the federal limit. Read more here.

If your loved one has some care needs but doesn’t meet the nursing home or intermediate care facility level of care, this new law gives your state the option to give your loved one a Medicaid HCBS waiver. This is optional for states, not required. Some (or many) states may decide not to expand waivers because the services are costly.

In other words, this new law doesn’t end existing waivers, and it does give states the option to expand waivers to people who have not been eligible before. But whether to take that step is entirely up to each state.