In the early hours of May 22, 2025, after an all-night session when numerous last-minute changes were made, the U.S. House of Representatives voted to extend the 2017 Tax Cuts and Jobs Act that expires on December 31. Both in 2017 and in 2025, the tax cut legislation that disproportionately benefited corporations and the wealthy passed with only Republican votes. This time, however, Republicans voted to partially pay for the ten-year, over $4 trillion tax breaks with $1.6 trillion in federal spending reductions. Around $1 trillion of these reductions would come from raising health care costs and reducing coverage for everyday Americans, with only 3.5 percent of Medicaid cuts from eliminating legitimate waste, fraud, and abuse.
The House-passed bill, officially named the “One Big Beautiful Bill Act,” would have profound negative implications for Americans’ health if passed by the Senate and signed into law. We summarize its provisions and its potential health effects, including snapshots from the vantage points of North Carolina and Maine, where we were recently state officials.
How the One Big Beautiful Bill Act Weakens Health Programs
The reconciliation bill includes over fifty sections on health policy. Most affect Medicaid (the federal-state health program for low-income people) and the health insurance marketplace (the system offering tax credits to primarily middle-income people who purchase private insurance).
Medicaid spending reductions would come from the following provisions:
- Reducing Medicaid coverage of eligible people: The bill would reduce Medicaid enrollment by adding multiple new and cumbersome paperwork requirements for eligible Medicaid enrollees, including work reporting for the millions of people already working, red tape for caregivers and people too sick to work, and twice-a-year reenrollment for expansion enrollees. It would also selectively increase out-of-pocket costs, limit eligibility, and reduce benefits.
- Restricting how states fund and pay health care providers: The bill would restrict how states finance Medicaid and pay hospitals, clinics, and others for services.
- Limiting waste, fraud, and abuse: Republican proponents claim the Medicaid savings come from eliminating waste, fraud, and abuse. However, only four of the bill’s provisions would produce savings for doing so, accounting for 3.5 percent of the gross Medicaid spending reductions.
Figure 1
Marketplace spending reductions would be achieved by:
- Raising working people’s share of health care costs: The bill would allow health insurance premiums for 22 million people to increase by 93 percent on average by not extending premium tax credit increases that have been in effect from 2021 to 2025. The bill would also make technical changes that further increase out-of-pocket premiums and also raise the maximum annual cost sharing for all privately insured people by $900 for a family plan.
- Restricting who can get premium tax credits: The bill would limit premium tax credit eligibility by capping who can get the tax credit, creating new exclusions (including for people losing Medicaid due to work requirements and legal immigrants), and imposing new barriers for eligible people, such as mandatory, manual verification before getting premium assistance and elimination of automatic renewal of coverage; automatic renewal is regularly used in Medicare and employer-sponsored insurance.
While the House-passed bill minimally affects Medicare (the program for the elderly and certain persons with disabilities), it would result in cuts nonetheless if enacted. The nonpartisan Congressional Budget Office (CBO) preliminarily anticipates that the House-passed bill would increase the deficit by a large enough amount to trigger automatic “sequester” or spending cuts, which would reduce Medicare spending by $45 billion in 2026 and $490 billion from 2027 to 2034.
The Likely Effects of the House-Passed Bill on Americans’ Health
The House-passed bill would negatively impact Americans’ health by scaling back health coverage, straining health care providers and state budgets, and pushing more Americans into economic uncertainty—all of which have a demonstrated, negative impact on people’s health and lifespan.
Large Reductions in Health Coverage
The CBO continues to work on comprehensive estimates of the House-passed bill, but projected on May 7, 2025 that the number of uninsured Americans would increase by 13.7 million due to the bill and related changes. On May 20, 2025, CBO stated in a footnote that additional marketplace policies would increase the uninsured by another 2.1 million, although it continues to work on interactions between the provisions. When done, CBO will likely project that the bill will result in 15 million people losing coverage—a 50 percent increase in the number of uninsured. A long list of studies show that being uninsured undermines people’s health, from causing them to delay or skip care to dying prematurely. A recent comprehensive study confirmed that covering people in Medicaid reduced the risk of death by 21 percent—progress that would be reversed with the loss of coverage.
Increased Strain on States, Hospitals, Doctors, and Clinics
One way the legislation would reduce federal spending is through new limits on how states fund health care. Faced with restrictions on using federal Medicaid funds, states would have to choose whether to raise taxes to support current Medicaid services or, more likely, cut benefits or reduce what they pay to hospitals, doctors, clinics, and other providers. The House-passed bill could push already-burdened health care providers, especially those in rural areas, over the edge to closure—reducing access to critical services for all people, not just those with Medicaid.
The One Big Beautiful Bill Act also explicitly constrains “state-directed payments” that support, for example, rural hospitals, maternity units, and health workforce training programs. States have also used such payments to get at root causes of illness—sometimes called social determinants of health—without which, individuals, employers, and the government end up paying more for health problems like diabetes or heart disease.
And, the House-passed bill would reduce funding for the Supplemental Nutrition Assistance Program (SNAP), the nation’s major food program, by nearly $300 billion over ten years. In addition to shifting costs to states, the proposal would result in older people and working families, among others, paying more for groceries or buying less, resulting in poor nutrition and increased chronic illness.
Decreased Support for Lowest-Income Americans While Cutting Taxes for Highest-Income Americans
CBO preliminarily examined how the bill would affect people by income. Even without taking into account health insurance marketplace and other changes, it found that, when fully implemented in 2033, people with the lowest income would be worse off while people with the highest income would be better off (Figure 2). A subset of policies illustrates this: the cost of tax breaks for people with income above $500,000 costs $1.1 trillion—about the same as the federal funding cuts in Medicaid and SNAP. People with low income typically have higher morbidity and shorter lifespans, in part due to limited access to services and supports. The One Big Beautiful Bill Act would lower the resources available to the poorest, contributing to worse health.
Figure 2
The Damage to States: North Carolina and Maine
As former state officials who worked on advancing health coverage, we know first hand the benefits of effective, efficient health systems—and anticipate that the proposals fast-tracked through the House will harm Americans’ health if they become law. State taxpayers are already on the hook for projected state revenue shortfalls and structural deficits; this would be made much worse if these provisions were enacted. Congress should redraft the One Big Beautiful Bill Act so it follows the hippocratic oath of, “do no harm.”
Examples of the House-Passed Bill’s Impact on North Carolina
- Coverage Loss: An estimated 522,000 North Carolinians would lose health insurance: 270,000 covered by Medicaid and 252,000 covered through the health insurance marketplace. This would pull the rug out from under the recent gains made through the state’s bipartisan effort to expand Medicaid. Coverage losses along with capping state directed payments would be particularly detrimental to rural communities, where nearly a dozen hospitals have closed in the last decade.
- Increased Premiums: Nearly 1 million North Carolinians buy health insurance through healthcare.gov, the federally run marketplace, with 96 percent receiving advanced tax credits to help pay their premium. The One Big Beautiful Bill Act would force a 60-year-old couple earning an annual income of $82,000 per year to pay nearly $19,000 more in premiums for insurance.
- Shifting Costs to States: The state and the counties would have to pitch in an additional $700 million to cover SNAP costs. The cumulative effect of all proposed changes would result in approximately $30 billion in federal Medicaid cuts to North Carolina over ten years. Already-stretched county governments would face significant strain because of new requirements that individuals be redetermined for Medicaid expansion every six months, instead of annually.
Examples of the House-Passed Bill’s Impact on Maine
- Increased Uninsured: An estimated 51,000 Maine residents would become uninsured in 2034 if the House-passed bill becomes law: 34,000 from MaineCare (Maine’s Medicaid program) and another 17,000 from CoverME.gov (Maine’s state-based marketplace).
- Increased Out-of-Pocket Premiums: About 55,000 people receiving premium tax credits through CoverME.gov would pay more for coverage due to expiring tax credits not extended in the House-passed bill. Rural enrollees would be particularly hard hit, paying $31 million more for coverage, with those in the most rural counties, Aroostook and Washington, paying 70 percent more on average for their private health plans. For a middle-income person with income from $60,240 to $75,300, out-of-pocket cost for health coverage would be $8,460 higher annually, consuming 10 percent of their income.
- Cost Shift to Maine’s Budget: Because it covers low-income children, regardless of immigration status, Maine stands to lose $77 million annually in federal Medicaid matching payments. The administrative costs for the state mandates to verify MaineCare eligibility would cost $8.5 million to implement and $6 million annually thereafter. The proposed changes to SNAP would require Maine to fund $242 million to $815 million over the next decade.
The analyses on which this article is based was supported by the Commonwealth Fund, a national, private foundation based in New York City that supports independent research on health care issues and makes grants to improve health care practice and policy. The views presented here are those of the author and not necessarily those of the Commonwealth Fund, its directors, officers, or staff.
Tags: donald trump, house budget, medicaid
House-Passed Tax Cuts for Wealthy People and Corporations Come at a Cost to Americans’ Health
In the early hours of May 22, 2025, after an all-night session when numerous last-minute changes were made, the U.S. House of Representatives voted to extend the 2017 Tax Cuts and Jobs Act that expires on December 31. Both in 2017 and in 2025, the tax cut legislation that disproportionately benefited corporations and the wealthy passed with only Republican votes. This time, however, Republicans voted to partially pay for the ten-year, over $4 trillion tax breaks with $1.6 trillion in federal spending reductions. Around $1 trillion of these reductions would come from raising health care costs and reducing coverage for everyday Americans, with only 3.5 percent of Medicaid cuts from eliminating legitimate waste, fraud, and abuse.1
The House-passed bill, officially named the “One Big Beautiful Bill Act,” would have profound negative implications for Americans’ health if passed by the Senate and signed into law. We summarize its provisions and its potential health effects, including snapshots from the vantage points of North Carolina and Maine, where we were recently state officials.
How the One Big Beautiful Bill Act Weakens Health Programs
The reconciliation bill includes over fifty sections on health policy. Most affect Medicaid (the federal-state health program for low-income people) and the health insurance marketplace (the system offering tax credits to primarily middle-income people who purchase private insurance).
Medicaid spending reductions would come from the following provisions:
Figure 1
Marketplace spending reductions would be achieved by:
While the House-passed bill minimally affects Medicare (the program for the elderly and certain persons with disabilities), it would result in cuts nonetheless if enacted. The nonpartisan Congressional Budget Office (CBO) preliminarily anticipates that the House-passed bill would increase the deficit by a large enough amount to trigger automatic “sequester” or spending cuts, which would reduce Medicare spending by $45 billion in 2026 and $490 billion from 2027 to 2034.
The Likely Effects of the House-Passed Bill on Americans’ Health
The House-passed bill would negatively impact Americans’ health by scaling back health coverage, straining health care providers and state budgets, and pushing more Americans into economic uncertainty—all of which have a demonstrated, negative impact on people’s health and lifespan.
Large Reductions in Health Coverage
The CBO continues to work on comprehensive estimates of the House-passed bill, but projected on May 7, 2025 that the number of uninsured Americans would increase by 13.7 million due to the bill and related changes. On May 20, 2025, CBO stated in a footnote that additional marketplace policies would increase the uninsured by another 2.1 million, although it continues to work on interactions between the provisions. When done, CBO will likely project that the bill will result in 15 million people losing coverage—a 50 percent increase in the number of uninsured. A long list of studies show that being uninsured undermines people’s health, from causing them to delay or skip care to dying prematurely. A recent comprehensive study confirmed that covering people in Medicaid reduced the risk of death by 21 percent—progress that would be reversed with the loss of coverage.
Increased Strain on States, Hospitals, Doctors, and Clinics
One way the legislation would reduce federal spending is through new limits on how states fund health care. Faced with restrictions on using federal Medicaid funds, states would have to choose whether to raise taxes to support current Medicaid services or, more likely, cut benefits or reduce what they pay to hospitals, doctors, clinics, and other providers. The House-passed bill could push already-burdened health care providers, especially those in rural areas, over the edge to closure—reducing access to critical services for all people, not just those with Medicaid.
The One Big Beautiful Bill Act also explicitly constrains “state-directed payments” that support, for example, rural hospitals, maternity units, and health workforce training programs. States have also used such payments to get at root causes of illness—sometimes called social determinants of health—without which, individuals, employers, and the government end up paying more for health problems like diabetes or heart disease.
And, the House-passed bill would reduce funding for the Supplemental Nutrition Assistance Program (SNAP), the nation’s major food program, by nearly $300 billion over ten years. In addition to shifting costs to states, the proposal would result in older people and working families, among others, paying more for groceries or buying less, resulting in poor nutrition and increased chronic illness.
Decreased Support for Lowest-Income Americans While Cutting Taxes for Highest-Income Americans
CBO preliminarily examined how the bill would affect people by income. Even without taking into account health insurance marketplace and other changes, it found that, when fully implemented in 2033, people with the lowest income would be worse off while people with the highest income would be better off (Figure 2). A subset of policies illustrates this: the cost of tax breaks for people with income above $500,000 costs $1.1 trillion—about the same as the federal funding cuts in Medicaid and SNAP. People with low income typically have higher morbidity and shorter lifespans, in part due to limited access to services and supports. The One Big Beautiful Bill Act would lower the resources available to the poorest, contributing to worse health.
Figure 2
The Damage to States: North Carolina and Maine
As former state officials who worked on advancing health coverage, we know first hand the benefits of effective, efficient health systems—and anticipate that the proposals fast-tracked through the House will harm Americans’ health if they become law. State taxpayers are already on the hook for projected state revenue shortfalls and structural deficits; this would be made much worse if these provisions were enacted. Congress should redraft the One Big Beautiful Bill Act so it follows the hippocratic oath of, “do no harm.”
Examples of the House-Passed Bill’s Impact on North Carolina
Examples of the House-Passed Bill’s Impact on Maine
The analyses on which this article is based was supported by the Commonwealth Fund, a national, private foundation based in New York City that supports independent research on health care issues and makes grants to improve health care practice and policy. The views presented here are those of the author and not necessarily those of the Commonwealth Fund, its directors, officers, or staff.
Notes
Tags: donald trump, house budget, medicaid