Major 2026 Healthcare Policy Changes Under One Big Beautiful Bill Act Impact Coverage and Costs

The 'One Big Beautiful Bill Act of 2025' (OBBBA), a significant budget reconciliation law signed in July 2025, introduces substantial changes impacting Medicaid, the Affordable Care Act (ACA) marketplace, medical student loans, and federal health funding, set to take effect starting January 2026. The American Medical Association (AMA) highlights that these changes may result in up to 10 million people losing health insurance coverage by 2034, with uninsured numbers potentially increasing by more than 14 million if ACA enhanced premium tax credits are not extended beyond 2025. On the Medicaid front, OBBBA ends the incentive for states to expand Medicaid programs by discontinuing the two-year enhanced Federal Medical Assistance Percentage (FMAP) for expansion expenditure, impacting 10 non-expansion states and possibly deterring future expansion. It also introduces more frequent eligibility redeterminations, imposes work requirements for Medicaid expansion enrollees, and tightens financial mechanisms on state payments to healthcare providers. Regarding the ACA marketplace, OBBBA shortens enrollment windows, ends automatic reenrollments, and eliminates the continuous special enrollment period for individuals with incomes below 150% of the federal poverty line, making premium tax credits less accessible and ACA marketplace coverage less affordable for many. Tax credit repayment caps protecting low-income earners have been removed, increasing the risk of significant financial liabilities for enrollees with income discrepancies. Additionally, noncitizen eligibility for ACA premium tax credits is narrowed substantially to lawful permanent residents and select groups, excluding categories like refugees and asylees. Student loan provisions under OBBBA will cap unsubsidized federal loans for professional students at $50,000 annually, with a lifetime cap of $200,000, and overall federal borrowing capped at $257,500 with limited repayment options starting July 1, 2026. Economic hardship and unemployment deferments will end by July 1, 2027. These changes are anticipated to increase financial pressure on medical students and exacerbate the ongoing physician shortage. The AMA underscores that these policy changes will likely result in delayed care, poorer health outcomes, financial hardships for patients, and increased challenges for physicians managing uninsured and underinsured populations. Safety net financing is expected to become less stable, and healthcare providers may face intensified operational pressures. The AMA is actively working with state medical societies and specialty associations to influence how states implement these changes, focusing on minimizing potential harms. Physicians are encouraged to educate their patients on maintaining health insurance coverage, understanding premium increases, and utilizing enrollment assistance to navigate the evolving landscape. This legislation signifies a considerable shift in federal healthcare policy with far-reaching implications for payer/provider interactions, regulatory compliance, and market dynamics. The AMA continues to advocate for medical professionals and patients as these changes unfold, providing resources and guidance to navigate the complex environment post-OBBBA.