US Insurance Market Poised for Major Change Under 'One Big Beautiful Bill Act'
The recent passage of the 'One Big Beautiful Bill Act' marks a pivotal shift in the U.S. insurance industry, impacting health insurance and property and casualty (P&C) sectors significantly. Healthcare coverage is expected to contract due to extensive Medicaid funding cuts totaling nearly $1 trillion over the next decade and the introduction of new eligibility work requirements. ACA marketplace users face tightened subsidy access, shortened enrollment periods, and stricter eligibility verifications, potentially leading to premium increases up to 75% and a projected rise in the uninsured population by 16 million by 2034.
In response, a $50 billion fund aims to support rural hospitals; however, stakeholders remain cautious about its sufficiency to counterbalance coverage losses. On the P&C insurance front, the legislation incentivizes business reinvestment through reinstated 100% bonus depreciation for qualifying properties from 2025 to 2030 and a $2.5 million increase in Section 179 expensing limits, improving liquidity for policyholders and opening avenues for expanded coverage portfolios.
Additional modifications include changes to casualty loss deductions and extensions of energy-efficiency tax credits with an eventual phase-out, potentially driving a temporary increase in sustainable construction. These fluctuations may influence risk exposure and underwriting strategies within the property insurance domain. Beyond insurance-specific provisions, the act introduces new individual tax deductions addressing tips, overtime, and car loan interest, alongside expanded standard deductions for seniors.
The cumulative effect of these provisions necessitates strategic adaptation by insurers and stakeholders in underwriting, claims management, and risk assessment processes. Compliance and regulatory monitoring will be crucial as changes in subsidy and funding structures unfold. This legislation represents a complex blend of fiscal policy and insurance market regulation signaling significant transformation across insurance sectors over the coming decade.