House Bill Projects Millions to Lose Health Insurance via Medicaid and ACA Cuts
The House tax and spending bill proposes significant cuts to health insurance programs, which are projected to cause approximately 11 million Americans to lose health coverage through Medicaid and the Affordable Care Act (ACA). An additional 4 million individuals may lose insurance due to the expiration of enhanced Obamacare subsidies, which the bill does not extend. These measures include new work requirements for Medicaid recipients, which would affect individuals aged 19 to 64 and require documentation of 80 hours of qualifying work or activity monthly. The Congressional Budget Office estimates this will result in 5.2 million adults losing federal Medicaid coverage, contributing to a rise in the uninsured population by an estimated 4.8 million.
Federal funding cuts to Medicaid exceed $800 billion over ten years, compelling states to either reduce coverage or reallocate budgets away from other sectors. States will also face restrictions on provider taxes used to fund Medicaid and potential reductions in federal matching funds if they cover undocumented immigrants. The bill delays until 2035 certain Medicaid enrollment and renewal rules aimed at simplifying access for vulnerable groups.
The legislation would drastically reduce ACA enrollment by eliminating enhanced premium subsidies, shortening the open enrollment period, and removing automatic plan renewals. The enhanced subsidies during the pandemic significantly increased ACA enrollment and reduced premiums, especially for middle-income households; their expiration would increase premium costs by over $2,400 annually for some families. Removing repayment caps on subsidies further amplifies financial risks for low-income enrollees due to income volatility.
The bill institutes greater administrative barriers by requiring upfront verification of eligibility criteria including income and immigration status before subsidies can be applied, and limits ACA marketplace eligibility for certain legal immigrants, including refugees, asylees, and Deferred Action for Childhood Arrivals (DACA) recipients. This could reduce insurance options for these groups starting in 2027.
If enacted, these policy changes represent a significant contraction in health insurance coverage in the U.S., reversing decades of progressive increases in healthcare access fostered by Medicare, Medicaid, and the ACA. The bill faces uncertain prospects in the Senate due to opposition from some Republican senators over Medicaid cuts. The increased uninsured rates, higher costs, and administrative challenges would have broad implications for health insurers, providers, states, and insured populations, affecting market dynamics, compliance requirements, and coverage stability.
In summary, the House tax and spending bill would markedly reduce the scope of Medicaid, phase out key ACA subsidies, elevate financial and administrative burdens on consumers, and restrict coverage for certain immigrant populations, resulting in millions losing insurance coverage and increased market volatility in the U.S. health insurance sector.