On July 4th, 2025, President Trump signed the ‘The One Big Beautiful Bill’ into law, enacting massive tax cuts to several sectors of the U.S. economy, including the healthcare industry. This article will explore economists’ and analysts’ predictions on how the bill may impact the healthcare sector and what it could mean for American citizens.
What does the bill do?
President Trump’s new bill is one of the largest tax cut legislations ever enacted in U.S. history. The bill cuts taxes from social security, tips and overtime, and Trump accounts, which are tax-advantaged savings accounts for children. These tax cuts are expected to take away from federal healthcare spending.
In 2024, the U.S. spent $1.9 trillion on Medicare and Medicaid (~27% of the federal budget). It is estimated that the new bill would cut up to $1 trillion from Medicaid funding through 2034 [1]. These tax cuts are expected to reduce funding towards and reverse many of Biden and Obama administrations’ healthcare policies that made health care more accessible to Americans [5].
Multiple sources state that the visions of this bill are to extend Trump’s first-term tax cuts and fund construction for the border wall, and that they will offset most of that spending with cuts to Medicaid and the social safety net, which helps Americans afford food and health insurance [3].
Let’s take a deeper look into how these cuts to healthcare spending will affect Americans directly.
Who will be affected the most?
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Low-income Americans enrolled in Medicaid:
According to CNN, more than 70 million low-income Americans are covered by Medicaid, and nearly 10 million of them will be left uninsured in 2034. Less federal funding for Medicaid will change how these Americans qualify and enroll in the program. The cuts in spending could possibly lead to the closure of certain Medicaid benefits or make maintaining them harder, especially for low-income Americans. For example, the new bill made work requirements for low-income Medicaid expansion enrollees more strict in order to maintain their Medicaid coverage. This could pose many challenges to low-income Medicaid enrollees [3].
The group that would be hit the hardest are Americans whose income is between $32,150 and $42,760 (100-138% of the federal poverty level) and are enrolled in Medicaid expansion; Most will lose their insurance due to the eligibility changes enacted by the bill [2].
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People enrolled in Affordable Care Act Policies (ACA):
ACA, or Obamacare, was a reform law enacted in 2010 that made health insurance more affordable for all Americans [5]. A possible effect of the bill is the raise in cost for ACA premiums, regular payments to maintain health insurance coverage, for some Americans. The bill also removes eligibility for lawfully present immigrants [1]. This could leave hundreds of thousands of legal immigrants who are refugees, victims of trafficking, etc. uninsured [5].
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Hospitals:
Additionally, the bill cuts provider taxes, taxes most states have used to fund Medicaid payments to hospitals [5]. The cut in hospital funding risks lack of care and uncompensated care costs for uninsured patients [4]. Hospitals in rural areas, hospitals that depend more on Medicaid payments, may even close. To cushion the blow, the Senate enacted a $50 billion fund to rural hospitals to reduce the effects of the bill, however, rural hospitals state that this will not be enough to compensate for the damage they will have incurred [5].
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People who wish to undergo abortion:
Sources also state that the bill could negatively impact Americans who wish to undergo abortion, even in legal states as the bill will cut federal Medicaid funds that pay clinics to offer abortions [2].
References
[2]https://thehill.com/policy/healthcare/5384707-how-trumps-megabill-will-impact-health-care/
[3]https://www.cnn.com/2025/07/01/politics/congress-senate-bill-tax-spending-trump-gop-explainer
[4]https://www.cnn.com/2025/07/03/business/trump-big-beautiful-bill-business-economy
[5]https://www.npr.org/sections/shots-health-news/2025/07/02/nx-s1-5453870/senate-republicans-tax-bill-medicaid-health-care
[6]https://kffhealthnews.org/news/article/trump-big-beautiful-bill-obamacare-repeal-aca-gop-medicaid/ (Image)