Contents of How the ‘Big Beautiful Bill’ Threatens Medicaid, HCBS, and Disability Rights
- Medicaid’s Roots: How the Katie Beckett Law Still Shapes HCBS in 2025
- How Medicaid Cuts Jeopardize HCBS and Disability Independence
- HCBS: The Backbone of Community Living for People with Disabilities
- What HCBS Looks Like: Key Services That Support Independence
- How HCBS Supports Real Employment for People with Disabilities
- What Past Medicaid Cuts Reveal About Today’s HCBS Crisis
- The 2008 Recession’s HCBS Lessons for 2025
- The ‘Big Beautiful Bill’ and Its Threat to HCBS in 2025
- Why Underfunding HCBS Violates the ADA and Disability Civil Rights
- How to Fight Medicaid Cuts and Protect HCBS in Your State
Medicaid’s Roots: How the Katie Beckett Law Still Shapes HCBS in 2025
In 1981, President Ronald Reagan signed the Omnibus Budget Reconciliation Act, also known as the “Beckett Bill,” which allowed states to provide Home and Community-Based Services (HCBS) as an alternative to institutional care. The idea was simple. If people with disabilities could live at home with the right support, they should be able to. And it would cost less. One of the key advocates for this change was Katie Beckett, a young girl with a disability whose family had to choose between institutionalization and losing Medicaid coverage. Reagan’s administration ensured that children like Katie wouldn’t fall through the cracks of a rigid, institution-focused system.
The policy wasn't perfect, but it laid the foundation for decades of bipartisan support for HCBS. It acknowledged that people with disabilities should have the chance to live at home, attend school, pursue employment, and be part of their communities. The principle was freedom. The promise was dignity.
That promise is now at risk.
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Cuts to Medicaid always come with promises. Lawmakers say people won’t lose care, states will adapt, and services won’t suffer. But history tells a different story. The last time states were left to manage a sudden drop in federal Medicaid funding, people with disabilities paid the price. Services were cut off. Waitlists grew. Independence was lost.
Now, the Big Beautiful Bill threatens to repeat that mistake. Though it may not pass the Senate in its current form, it reveals a troubling willingness by lawmakers to slash Medicaid without a plan, without consulting disabled communities, and without learning from the past.
Home and Community-Based Services (HCBS), which help people with disabilities maintain independence and remain connected to their communities, are on the chopping block. We’ve seen what happens when states are forced to cut these services. We can’t afford to let it happen again.
How Medicaid Cuts Jeopardize HCBS and Disability Independence
Medicaid is often considered a safety net for health care, but it does far more than cover doctor visits or hospital stays.
States have the option to provide a broader set of Medicaid services. These services support people with disabilities, older adults, and others with long-term needs. They are called optional Medicaid services because states aren’t federally required to provide them, not because they’re unnecessary.
Optional Medicaid Services at Risk in 2025
Home and Community-Based Services (HCBS) include personal care aides, supported employment, and adult day programs.
Dental care for adults.
Prosthetics and durable medical equipment.
Prescription drugs in some contexts
Mental health and substance use services beyond the basic minimum.
Therapies like speech, occupational, and physical therapy.
These services are often the first to be cut when states face budget pressure, precisely because they are considered "optional." But for people with disabilities, they’re essential. Losing them means losing access to the support needed to avoid institutions, stay healthy, find work, and remain engaged in daily life.
HCBS: The Backbone of Community Living for People with Disabilities
Home and Community-Based Services (HCBS) are vital for people with disabilities. Though states can optionally cover them under Medicaid, the category includes a wide array of supports that promote autonomy, health, and community involvement.
What HCBS Looks Like: Key Services That Support Independence
Personal Care Assistance- Help with daily activities like bathing, dressing, cooking, and using the bathroom, allowing people to remain in their homes rather than institutions.
Respite Care- Short-term relief for family caregivers helps prevent burnout and crisis placements.
Supported Employment- Job coaching and assistance to help disabled individuals enter or remain in the workforce.
Adult Day Services- Structured programs offering supervision, skill-building, and social engagement during the day.
Case Management- Coordination of services to ensure people receive the care and support that fits their individual needs.
Home Modifications and Assistive Technology- Installation of ramps, grab bars, or specialized equipment to improve safety and accessibility.
Behavioral Supports and Therapy- Counseling and interventions that help people manage mental health needs or cognitive disabilities in community settings.
These aren’t luxuries. They are often the only alternative to institutionalization and uphold the promise of civil rights protections like the Americans with Disabilities Act.
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How HCBS Supports Real Employment for People with Disabilities
Many companies provide robust career-focused services under the HCBS umbrella. These supports allow people with disabilities to discover their strengths and interests, build workplace skills, and explore how they perform in real job environments before beginning the formal job search. While Vocational Rehabilitation (VR) programs offer similar services, HCBS often fills critical gaps. Many individuals do not have an open VR case but still receive career support through Medicaid-funded HCBS providers.
Like VR, these services are goal driven. Clients set employment objectives, and service providers help them work toward success. Often, this includes guided job exploration, resume development, and interview preparation. Once placed, many clients are supported by a job coach who gradually fades support as the individual gains independence. These are not placements in sheltered workshops or subminimum-wage environments. The aim is integrated, competitive employment. Real jobs, in real workplaces, with fair pay.
For those who choose to work—and it must always be their choice—the impact goes far beyond a paycheck. Employment brings a sense of purpose, pride, and belonging. HCBS makes that possible.
For a deeper exploration of how federal policies can inadvertently discourage employment among disabled individuals, consider reading The SSDI Benefits Cliff: How It Impacts Disabled Workers and Why Reform Is Essential. This article examines the abrupt loss of benefits that can occur when disabled workers earn above certain thresholds, highlighting the need for policy reforms to support sustained employment.
What Past Medicaid Cuts Reveal About Today’s HCBS Crisis
Let’s be clear. No one knows exactly how each state will respond to Medicaid cuts. Any speculation must be grounded in the historical record.
In 2008, the United States entered a deep recession. To ease the strain on state budgets, Congress temporarily increased the federal share of Medicaid spending. However, in 2011–2012, that support ended while the economic fallout continued. States weren’t prepared to carry the full financial burden, and hard choices had to be made.
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The 2008 Recession’s HCBS Lessons for 2025
Every state cut HCBS services in one way or another. Some reduced spending per person, others served fewer people, and many did both. Florida cut home health by 10 percent and intellectual and developmental disability (IDD) waivers by 25 percent. Tennessee cut other waivers by 8 percent and personal care services (PCS) by 9 percent. Texas cut IDD waivers by 42 percent and PCS by 16 percent. Michigan reduced home health spending by 39 percent, and Oregon by 46 percent.
The consequences were immediate and devastating. Waitlists grew. Providers received less funding, which meant they could serve fewer clients. In a job market already hostile to disabled workers, fewer people with disabilities entered or remained in the workforce. Others lost the daily support they relied on, and with it, the skills they had worked so hard to develop.
The ‘Big Beautiful Bill’ and Its Threat to HCBS in 2025
The Big Beautiful Bill, recently passed by the House, proposes devastating cuts to Medicaid to offset its sweeping deficit increase. Estimates range between 10 and 20 percent.
If signed into law, states would be responsible for the additional 10 to 20 percent of missing funds from the federal government within a year. This would force states to make cuts to Medicaid without public input. Last time, they didn’t ask for the public’s opinion about HCBS services—and history tells us who paid the price.
If states were given more time to adapt, they could limit the impact or find another way to fund them. At the very least, the Senate should amend the bill to implement any reductions gradually, beginning no earlier than 2029. This would allow states time to explore alternative funding mechanisms, hold public hearings, and develop local plans that avoid institutionalization. Although cuts to Medicaid are not ideal, a delayed implementation would give states a fighting chance. As it stands now, the reductions could wreak havoc in every state.
Why Underfunding HCBS Violates the ADA and Disability Civil Rights
The Americans with Disabilities Act (ADA) and the Olmstead decision by the U.S. Supreme Court aimed to reduce the institutionalization of people with disabilities and ensure their right to full participation in society.
The Court recognized what today’s lawmakers seem to have forgotten. Institutionalization is more expensive for taxpayers. It strips people of autonomy, separates them from family and community, and reduces quality of life.
Home and Community-Based Services offer a better, more cost-effective alternative. Yet when lawmakers underfund these services, they push people back toward institutions not because it’s better, but because it’s cheaper on paper and politically easier. Rather than holding disabled people to high expectations, institutionalization reinforces the low expectations that have long shaped public policy.
How to Fight Medicaid Cuts and Protect HCBS in Your State
Congress has one job: funding the federal government. That means now is the time to act. Right now, our senators and representatives are negotiating how and whether to preserve the services millions of us rely on. This is when they are listening. This is when they need to hear us.
Call your senators and representatives. Explain how Home and Community-Based Services affect you or your loved ones. Share which optional Medicaid services matter in your daily life, and what losing them would mean for your independence, safety, and ability to participate in your community.
Share your story. Send your experiences to advocacy groups, news outlets, and congressional offices. Post them online. Tag your senators and representatives on social media. Use video. Use your voice.
Make them see you.
Keep Reading: Related Advocacy Blog Posts
To better understand how federal and state policies impact disabled communities, check out these related reads:
References
H.R.1 - 119th Congress (2025-2026): One Big Beautiful Bill Act | Congress.gov | Library of Congress
Georgetown University Health Policy Institute, Center for Children and Families. (2025, May 20). Medicaid cuts grow harsher as GOP attempts to ram Trump agenda through House before Memorial Day.