Congress Passes Healthcare Bill Putting 16 Million at Risk of Losing Coverage

In a landmark legislative move, Congress passed the One Big Beautiful Bill Act (OBBBA) in early January 2025, ushering in what experts are calling the most significant reduction in federal healthcare support in history. The sweeping legislation, which affects Medicaid, the Affordable Care Act (ACA) marketplaces, and Medicare, could leave approximately 16 million Americans without health insurance by 2034.

The Scale of Impact

According to the Congressional Budget Office (CBO), the legislation will have far-reaching consequences:

• 11.9 million people will lose insurance coverage by 2034 due to reduced federal support for Medicaid and ACA marketplaces
• $1.02 trillion in federal spending cuts to Medicaid and the Children's Health Insurance Program (CHIP)
• 10.5 million people expected to be eliminated from Medicaid and CHIP programs by 2034
• 4.2 million additional people will become uninsured if enhanced ACA premium subsidies expire as scheduled at the end of 2025

Key Provisions Affecting Health Coverage

Medicaid Work Requirements

The legislation introduces stringent work requirements for Medicaid recipients in the 40 states and Washington, D.C. that have expanded Medicaid under the ACA:

• Recipients must work, volunteer, or attend school for at least 80 hours per month
• Regular paperwork must be filed to prove compliance
• Exemptions available for those caring for young children
• Requirements begin as early as January 2027

ACA Marketplace Changes

The bill brings significant modifications to how Americans access subsidized health insurance:

• End of immediate premium help: People applying for coverage outside open enrollment must wait for full document processing before receiving subsidies
• No extension of enhanced subsidies: Without Congressional action, premiums will rise by an average of 75% when pandemic-era subsidies expire
• Stricter enrollment verification: New pre-enrollment verification requirements for Special Enrollment Periods starting in 2026

Medicare Impacts

Low-income Medicare beneficiaries face substantial changes:

• 1.4 million people projected to lose Medicare Savings Program coverage
• $490 billion in Medicare cuts from 2027 to 2034 due to statutory budget rules
• Elimination of Medicare eligibility for certain lawfully present immigrants who have paid into the program

Rural Healthcare at Risk

The legislation poses particular threats to rural healthcare infrastructure:

• Over 300 rural hospitals face potential service reductions or closure
• States most affected include Kentucky, Louisiana, California, and Oklahoma
• While the bill includes $50 billion in relief funding for rural hospitals over five years, experts say this falls far short of offsetting the $1 trillion in Medicaid cuts

What This Means for Insurance Brokers

For insurance brokers, these changes present both challenges and opportunities:

1. Increased demand for private coverage: As millions lose public coverage, demand for private insurance options will surge
2. Client education needs: Brokers must stay informed about eligibility changes and deadlines
3. Rural market challenges: Brokers serving rural areas may face unique difficulties as healthcare infrastructure contracts
4. Enhanced advisory role: Clients will need expert guidance navigating the changing landscape

Looking Ahead

The implementation timeline stretches through 2034, with different provisions taking effect at various points:

• 2025: Enhanced ACA subsidies set to expire unless extended
• 2026: New enrollment verification requirements begin
• 2027: Medicaid work requirements start; Medicare cuts triggered
• 2034: Full impact realized with projected 16 million uninsured

Action Items for Stakeholders

For Brokers:

• Review client portfolios for those who may lose public coverage
• Develop contingency plans for enhanced subsidy expiration
• Strengthen relationships with carriers offering affordable options
• Invest in education about new requirements and timelines

For Carriers:

• Prepare for influx of previously publicly insured individuals
• Develop products targeting the subsidy-loss market
• Consider rural market strategies as hospital closures impact network adequacy

For Employers:

• Reassess benefits strategies as employee healthcare needs evolve
• Consider expanded offerings to support workers losing public benefits
• Evaluate impact on workforce in states with new Medicaid requirements

Conclusion

The One Big Beautiful Bill Act represents a seismic shift in American healthcare policy. With 16 million people at risk of losing coverage and fundamental changes to how Americans access healthcare, the insurance industry must prepare for unprecedented challenges and opportunities. Brokers, carriers, and employers who proactively adapt to these changes will be best positioned to serve the evolving needs of the American healthcare consumer.

As implementation unfolds over the coming years, staying informed and agile will be crucial for all stakeholders in the health insurance ecosystem. The true impact of these changes will depend not only on the legislation itself but on how the industry responds to protect and serve those at risk of losing coverage.