OBBBA's impact on the healthcare industry: Sweeping changes on the horizon

The One Big Beautiful Bill Act (OBBBA) was signed into law by President Trump on July 4 after a narrow 218-214 vote in the House and 51-50 tie-breaker in the Senate, decided by Vice President J.D. Vance. Although the House initially passed a different version, it ultimately adopted the Senate’s modified version to meet the president's Independence Day deadline.

The 900-page law primarily extends the 2017 Tax Cuts and Jobs Act, which was set to expire at the end of the year, and increases spending for defense and border security. The costs are partially offset by modifications (effectively cuts) to healthcare programs, most notably Medicaid and the Affordable Care Act (ACA) Marketplaces. Despite the included cuts, the Congressional Budget Office (CBO) still estimates the bill will add $3.4 trillion to federal deficits over the next 10 years.

We've been tracking the evolution of the law here at Union and have plenty of thoughts about OBBBA's impact on the healthcare industry—both the direct impacts of the final provisions as well as the signals gleaned from the pieces that were ultimately left on the cutting room floor. So, in this post, we’ll cover our key takeaways, from three dimensions:

• What’s in the bill, and how realistic are the estimated impacts on the healthcare industry?

  • Takeaway #1: The GOP clearly views Medicaid as a safety net, NOT as an entitlement (as Democrats do and as many within the industry have become accustomed to post-ACA), and, barring a major political backlash, are likely to continue efforts to position the program as a temporary backstop for the neediest Americans.

  • Takeaway #2: We should expect a significant increase in the uninsured rate—eroding as much as a third of the coverage gains experienced in the wake of the ACA.

  • Takeaway #3: We will likely see continued consolidation within the rural hospital sector as safety net providers face increased financial strain (despite supports included in the law), and look to tap into a limited pool of special funds.

  • Takeaway #4: The drug price negotiation model continues to survive (albeit it in a weakened state)—but we can expect to see a continued tug-of-war between traditional Republicans and the populist faction of the party, which aligns more with traditional Democratic views of command-and-control.

• What was left out of the bill (and why does it matter)?

  • Takeaway #5: Provisions that were cut out of the bill—including, (notably for a Republican-led bill) cuts to MA—are likely to remain priorities for lawmakers to pursue through other channels.

• Parting thoughts: Who is most impacted—and when?

  • Takeaway #6: The delayed timeline of major healthcare provisions is a politically-strategic move to potentially minimize voter fallout—but also leaves room for potential changes.

  • Takeaway #7: The ACA expansion states and populations—and the providers and plans that serve them—will bear the brunt of the costs included in this bill.

What's in the bill, and how realistic are the widely-circulated estimates of the OBBBA's impacts on the healthcare industry?

Medicaid and the ACA Marketplace are the main healthcare targets of the law, with an estimated 16 million people expected to lose coverage from a combination of changes to the ACA Marketplace and more than a combined $1 trillion in expected cuts to Medicaid over the next decade. (See Takeaway 2 for our take on the likely accuracy of those estimates.) The law also includes provisions related to rural health, Medicare drug negotiation, and HSAs. Let's go through the major provisions, one subsection at a time.

Medicaid provisions in the OBBBA:

80-hour Medicaid work requirements

OBBBA introduces nationwide Medicaid work requirements. Medicaid enrollees aged 19-64 will be required to file paperwork proving that they are working, volunteering, or attending school at least 80 hours a month (or 20 hours per week). There are some exemptions for the medically frail, pregnant women and caregivers of dependent children. (Note: the Senate’s version—which is what was ultimately signed into law—defied initial expectations of a more moderate approach to Medicaid. It expanded the House’s proposed version by requiring parents of children over the age of 14 to work.) The new requirement is slated to start by December 31, 2026, and applies only to the 40 states plus the District of Columbia that have expanded Medicaid to non-disabled adults.

Previously, states could implement work requirements only by obtaining a federal waiver from the Centers for Medicare & Medicaid Services (CMS). These state-level requirements were limited in scope, often overturned by courts, and most were rescinded by the Biden administration before taking effect.

Currently, only two states have actually implemented Medicaid work requirements:

• In June 2018, Arkansas became the first state to launch a Medicaid work requirement (80 hours a month, like the federal requirement introduced in the bill). However, the program lasted less than a year—it was halted by a court order in March 2019 with a federal judge ruling that it did not achieve the core objective of Medicaid.

• In July 2023, Georgia launched its own work requirement, requiring certain low-income adults (up to 100% of the federal poverty level) to meet work or community engagement requirements in order to qualify for Medicaid. The current waiver does not include any exemptions.

We'll talk more about how these requirements played out in practice a bit later.

More frequent Medicaid eligibility checks

Starting on December 31, 2026, the bill increases the frequency of Medicaid eligibility checks to every six months (up from every 12 months). The bill also delays rules finalized under the Biden administration that had aimed to reduce paperwork and streamline Medicaid eligibility and renewal processes. These Biden-era rules are delayed until at least 2035. So while they aren't technically repealed, they've been effectively nullified at a time when the political landscape is entirely unpredictable.

Closing the “Medicaid loophole” with cuts to provider taxes

Currently, states set “provider tax” rates. As the name suggests, these taxes are paid by healthcare providers. The money collected from these taxes is then used by the state to draw down matching federal Medicaid funds (i.e. get more money for their state programs, which are then used to pay the providers back). Critics have referred to provider taxes as the “Medicaid loophole," that essentially allows states to increase federal funding without adding to state residents' tax burdens.

The bill aims to close this loophole by incrementally lowering permissible provider taxes from 6% to 3.5% between 2028 and 2032 in Medicaid-expansion states. (Note: This final proposal is once again more aggressive than the initial House-passed bill, which proposed to lower federal costs by freezing states' provider taxes at current rates and prohibiting them from establishing new provider taxes.) Currently, 38 states have at least one provider tax over 5.5% of net patient revenue. While work requirements—and their potential impact on the uninsured rate—have received the most public attention, the impact of these changes to the provider tax system could be even more significant to the finances of the industry and on the uninsured rate.

Earlier this year (and prior to OBBBA), the CBO estimated that reducing the safe harbor limit for provider taxes could save tens to hundreds of billions of dollars depending on the size of the reduction. It estimated that a 5% threshold would save the federal government $48 billion over 10 years and a 2.5% threshold would save $241 billion over 10 years.

In short, this is a big deal for states that have relied on provider taxes as a significant source of increasing Medicaid funding on an effectively cost-free basis (at least to the state). Now the “gravy train” is over—especially for expansion states which will see a decrease in provider tax rates (not just a freeze). To be clear: there’s bipartisan dislike of provider taxes, with the most vocal of critics characterizing them as essentially nothing more than a money laundering scheme. The cuts, coupled with higher costs, mean that states will need to adjust Medicaid reimbursement rates for providers—and could lead a lot of states to limit who gets coverage, especially certain red expansion states with "trigger" laws.

Federal Medicaid funding of Planned Parenthood

There is a one-year federal ban (down from a 10-year ban in the House version) of Medicaid funding Planned Parenthood. (While Planned Parenthood is not named, the law is carefully worded to only apply to Planned Parenthood and a small handful of other family planning nonprofits.) The ban is effective immediately. Note: Federal Medicaid funds are already prohibited from being used for abortion services. This ban goes further by prohibiting all Medicaid reimbursements (such as for screenings and testing). An estimated 60% of Planned Parenthood clinics at risk of closure are in medically underserved or rural areas.

Emergency Medicaid for undocumented immigrants

Expansion states will no longer receive the enhanced federal match for emergency medical care provided to undocumented immigrants starting in October 2026. For context, the minimum for the standard match is 50%, while the enhanced rate is 90%.  (Note: This provision will likely have a smaller impact than you might expect: A CBO report estimated that the total cost of Emergency Medicaid for undocumented immigrants was about $27 billion, less than 1% of overall Medicaid spending.)

Increased cost sharing

The law includes a federal mandate that requires cost sharing, up to $35 per service, for people in the Medicaid expansion population earning over 100% of the federal poverty level. This requirement will start in October 2028.

Takeaway #1: The GOP clearly views Medicaid as a safety net, NOT as an entitlement (as Democrats do and as many within the industry have become accustomed to post-ACA).

Perhaps the most sweeping—and surprising—element of the bill is the scale of the Medicaid restructuring. Why is it surprising? There’s been a prevailing attitude among Democrats—and, increasingly, most of the healthcare industry —that Medicaid is a secure entitlement. Even many Republicans (mostly in swing states) initially opposed the extent of Medicaid cuts in OBBBA, although most eventually voted in support of the bill. But the magnitude of the cuts, combined with new work requirements and administrative hurdles, have ended up representing the most substantial rollback of Medicaid in history. In fact, the scale of the finalized changes exceeded initial expectations. Many political analysts (and many Republican lawmakers in the House) were surprised that the Senate actually increased the scale of the Medicaid provisions relative to the House (for example, imposing a cap on provider taxes and broadening the work requirement provision).

On the other hand, it's not entirely surprising that Medicaid was a target for cost reduction considering: 1) It’s certainly not as politically popular as Medicare/Medicare Advantage (more on this later), and 2) it would have been virtually impossible to offset any of the increased spending from the tax cuts in the bill without touching Medicaid. The takeaway: Medicaid is far less secure as a post-ACA entitlement than many have come to expect.

ACA provisions in the OBBBA:

Enhanced premium tax credits are set to expire at end of 2025

The law does NOT extend the Biden-era enhanced premium subsidies that are set to expire at the end of 2025, which will revert to pre-pandemic (but post-ACA) levels. The enhanced subsidies were first enacted in 2021 under the American Rescue Plan Act and were later renewed through the end of 2025 under the Inflation Reduction Act. Since their implementation, ACA marketplace enrollment has grown each year, reaching over 21 million people in 2024.

In theory, Congress could find other ways to extend the subsides outside of the law, but it’s unlikely that a GOP-led Congress will chose to do so. If these enhanced subsidies are not renewed before the end of the year, the Kaiser Family Foundation estimates that ACA enrollee premium payments will increase by over 75% on average for those receiving premium tax credits (the Biden-era enhancements had reduced premiums by 44% for the same group), albeit with quite a bit of variation from person to person.

End of automatic reenrollment and shortened enrollment windows

ACA Marketplace policy holders won’t be able to automatically reenroll in either health insurance plans or the premium subsidies, starting in 2028. They will be required to enter income, immigration status, and other information to reenroll. This change targets individual and family coverage through the ACA Marketplaces and doesn’t appear to apply to SHOP, the ACA’s small business marketplace. (Note: more than 10 million people took advantage of automatic reenrollment in 2025). Supporters of the law believe this information update is necessary to prevent ineligible enrollees from continuing to receive subsidies.

OBBBA also eliminates provisional eligibility for premium tax credits while applicants wait on eligibility determinations. Today, if people need to reenroll outside of the designated period (for example, if they lose their job), they get up to 90 days of premium help during the application process. Under the changes made in the rule, they will have to wait for all their documents to be processed before receiving government subsidies to help pay their monthly premiums.

Takeaway #2: We expect a significant increase in the uninsured rate—eroding roughly a third of the coverage gains experienced in the wake of the ACA.

The big headline coming out of the law's passage, of course, is its expected impact on the uninsured rate, given the combined impact to Medicaid and the ACA exchanges. The CBO projects the law will result in nearly 16 million Americans losing their coverage—undoing a more than decade-long trend of reductions in the uninsured rate—and eroding about one-third of the roughly 44 million people who obtained coverage since the implementation of the ACA. (Note: The CBO's estimate came out before the Senate made significant changes to the bill—like decreasing provider tax rates—meaning the actual increase in the uninsured rate could be even higher than this estimate.) We said in the wake of the election that while we were unlikely to see another full attempt at "repeal and replace," many major remaining provisions of the ACA were likely to be reformed, if not outright undone. This law is a big step in that direction. 

(Note: You might be seeing conflicting estimates of the projected coverage losses, with some sources citing coverage losses of 16 million people and others citing 12 million people. The 12 million estimate accounts for only the changes in OBBBA, while the 16 million estimate also accounts for the expiration of the ACA marketplace subsidies).

Let's do a quick reality check here. We never like to take things at face value, so we dug into these estimates in quite a bit of detail. You might be wondering, for example, why so many people are expected to lose coverage as opposed to maintaining Medicaid or moving to employer-sponsored insurance or other ACA Marketplace plans. As it turns out, there are a few solid reasons for the scale of the estimates (and we double-checked to make sure the CBO’s estimates, in particular, take these factors into account):

1) Historical precedent suggests that most people who lose Medicaid coverage are unable to successfully shift to other plans. For example, in 2018, less than 4% of adults who were disenrolled from Medcaid moved to an exchange plan. And following the process of Medicaid unwinding in April 2023 (the end of the pandemic-era policy of continuous coverage regardless of eligibility), about half of the 25 million people who lost Medicaid coverage became uninsured. We probably would have seen even higher rates of coverage losses, but many states implemented new processes, like increased education/outreach and auto-enrollment pilots, to help people who lost coverage transition to the ACA Marketplace. Even with streamlined processes, there are still barriers that prevent people moving from Medicaid to Marketplace coverage. For one, exchange plans (even with subsidies) are still more expensive than Medicaid (which is free). And, in some cases, non-compliance with work requirements makes people ineligible for marketplace subsidies.

2) Although work requirements are intended to boost employment and help people get off Medicaid and onto alternative forms of insurance, such as employer-sponsored insurance, evidence suggests that they are largely ineffective. Because they introduce additional administrative hurdles into the Medicaid enrollment process,—and because many eligible adults are actually already working—experiments with work requirements to-date have reduced the number of adults with health insurance coverage, with no discernible effect on employment. For example, more than 180,000 people lost coverage in less than a year in Arkansas (one of the two states that implemented work requirements), with no upward effect on employment. Subsequent analyses have confirmed that most who lost coverage were in fact already working (the majority of Medicaid enrollees work full- or part-time), but the process of confirming said employment was simply too confusing and burdensome to navigate. The bottom line is that states will have to take the initiative to lower hurdles, and few have the political or fiscal incentive to do so.

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3) Some proponents of the bill point toward welfare reform in the 90s as a successful example of decreasing dependency on government assistance through increased work requirements. But there are some notable differences in the current environment: OBBBA takes a broader and more aggressive approach to work requirements, and includes fewer supports (i.e., OBBBA included significant cuts to SNAP where welfare reform increased nutritional support, and welfare reform included substantial investment into child care infrastructure and caregiver support).

It's important to note that the loss of coverage won't be felt evenly across the country. States who experienced the largest growth in ACA Marketplace enrollment since the enhanced premium tax credits became available are expected to be impacted the most—Texas, Florida, and Georgia (though we should also note that states that did not expand Medicaid will be mostly spared from the impact to cuts to that program).

Note: Patient financial experience was already shaping up to be a major research priority for us across H2, given the big spike in claims denials that we’ve seen across the industry. But with the bill’s expected impact on uncompensated care rates, we’ll be dialing up our focus here for the rest of this year, and beyond.

Rural health provisions in the OBBBA:

Rural hospital fund

One notable change made by the Senate to the final version of the bill is a $50 billion fund called the Rural Health Transformation Program. States have until the end of the year to apply for funds. Half of the funding will be distributed among all states with approved applications, while the other half will be allocated entirely at the discretion of the CMS Administrator, Mehmet Oz. The Senate added this fund after some GOP senators expressed concern over how rural hospitals could be impacted by the Medicaid restrictions.

Takeaway #3: We will likely see continued consolidation within the rural hospital sector as safety net providers face increased financial strain, and look to tap into a limited pool of special funds.

Despite the introduction of the new $50 billion rural hospital fund, rural and safety-net providers are still likely to face outsized financial stress—and possible closures. Rural providers rely much more heavily on Medicaid than urban providers—Medicaid covers at least a quarter of adults in rural areas. And rural hospitals are already in a tight financial spot: about 46% of rural hospitals are in the red and hundreds of rural hospitals are at risk of closure. Medicaid spending in rural areas is expected to decline by $155 billion as a result of the bill (this includes the Medicaid cuts, limits on provider taxes, and fewer insured patients). The $50 billion fund doesn’t come anywhere close to covering those losses. Additionally, it takes significant resourcing (staff, administrative resources, grant-writing expertise) to apply for federal funds—making it unrealistic for many independent rural hospitals to access these resources. And last, there's nothing in the bill guaranteeing that every state that applies will get money (or how much money) or that the money will go to rural areas.

As rural hospitals look to tap into what is likely to be a limited and insufficient funding pool, they may seek to gain leverage (as well as additional financial security) through consolidation with larger systems.

Note: We’ll be doing a deeper dive into the state of hospital/health system margins, including rural hospitals, for our August Board Briefing webinar. You can register for that session here.

Medicare provisions in the OBBBA:

Medicare drug negotiation:

While the OBBBA did not include sweeping changes to Medicare, there was one provision of note related to Medicaid drug pricing. The Biden-era Inflation Reduction Act included a provision that exempted “orphan drugs” (approved for the treatment of a single rare disease or condition) from Medicare drug price negotiations. The OBBBA expands the orphan drug exclusion to include a broader range of drugs that fall under the “rare disease” category. This provision will apply to negotiated prices available on or after January 1, 2028. It effectively limits or handicaps CMS's authority to negotiate drug prices for more blockbuster drugs.

Takeaway #4: The drug price negotiation model continues to survive (albeit it in a weakened state)—but we can expect to see a continued tug-of-war between traditional Republicans and the populist faction of the party, which aligns more with traditional Democratic command-and-control views.

The introduction of the drug price negotiation model under the IRA was an unusual loss for the pharma industry. It was also unpopular among many Republicans who, if they had it their way, would have liked to use the OBBBA as an opportunity to eliminate drug negotiation completely. Still, the model persists (albeit in a weakened state) despite its general unpopularity among Republicans, intense lobbying from the pharma industry, and the fact that the allowance will avert (an albeit modest) $4.87 billion in federal savings from the Medicare drug price negotiation program—almost certainly because of direct support from President Trump and the growing populist faction of the Republican party. Given the growing divide within the Republican party on drug pricing, we’d expect to see a continued tug-of-war here. As many political observers have predicted, once the government opened the door to price controls, that power will become a political battlefield for the foreseeable future.

Health savings accounts (HSA) provisions in the OBBBA:

Expand HSA access and flexibility

While the House version of the bill included many changes to enhance the use and benefits of HSAs, the version that ultimately passed included only three of those proposed changes (more on what didn't make it in a minute): 

• Concierge medical care qualifies: Under current law, many of these arrangements are not eligible to be paid for with HSA money. In the new bill, certain direct primary care (DPC) fees would be HSA eligible if the fee does not exceed $150 monthly for individuals, or $300 monthly where more than one individual is covered.

• More health insurance plans can provide HSAs: All bronze and catastrophic plans offered on the ACA exchanges are now classified as HSA-qualified HDHPs.

• Permanent telehealth coverage: The bill allows HDHPs to cover telehealth services before the deductible is met.

What was left out of the bill (and why does it matter)?

Despite the many healthcare provisions of the bill, many other structurally significant proposals were left on the cutting room floor—reflecting both the limits of using the reconciliation process for sweeping healthcare reform, as well as the politically-sensitive nature of making large-scale changes to government healthcare programs. But that doesn’t mean that the GOP will abandon these priorities—in fact, we think they offer important signals as to what we can expect to see in future lawmaking (or rulemaking) efforts:

For those of you who were tracking the bill's progress through Congress, here are some provisions you may have read about that were excised or altered in the final version, and why those changes matter for the future:

• Sweeping Medicare/MA cuts:

  • Delayed (but not canceled) implementation of enrollment and staffing rules: Congress delayed implementation of a September 2023 CMS final rule that would reduce barriers to enrollment for Medicare beneficiaries in Medicare Savings Programs (state-run programs that help people with limited income and resources pay for some or all their Medicare costs) until October 1, 2034. The bill also prohibited the implementation of minimum staffing levels in long-term care facilities until October 1, 2034. Note: Republicans would have preferred to cancel these two rules all together, but could only defer them under the rules of the reconciliation process.

  • No provision to use AI to identify improper payments: The House version included a provision that would provide funding to Health and Human Services (HHS) to use AI to identify and reduce improper Medicare payments. This provision was ultimately dropped from the Senate’s version, mostly likely to make room for other priorities.

  • No MA payment reform: There were rumors circulating that MA was on the table, with discussions specifically targeting upcoding in MA, but those ideas were dropped and never made it onto paper.

  • No permanent Medicare physician payment reform: Physician groups had pushed for a long-term fix to how Medicare reimburses doctors, addressing what they describe as an outdated and unpredictable payment formula. But the bill only passed a short-term funding bump that provides a one-year increase of 2.5% to the Physician Fee Schedule conversion factor for all services furnished between January 1, 2026 and January 1, 2027. We should note here that a "permanent fix" to Medicare physician payment almost certainly doesn't exist. We have covered many laws (MACRA being the most recent example) that purported to be a permanent fix. Fast forward, and here we are.

  • No new mental health parity or transparency mandates: Provisions to strengthen enforcement of mental health parity laws and require more transparency from insurers were under discussion but did not have a sufficient budgetary impact to survive reconciliation.

• Medicaid provisions that didn't meet the strict budgetary guidelines required under reconciliation:

  • Cutting federal funds to states covering undocumented immigrants under Medicaid: This measure (which did not make it past congressional parliamentarians) aimed to penalize states that use state funds or Medicaid administrative infrastructure to offer health coverage to undocumented immigrants.

  • Reduced federal match for expansion populations in states providing coverage to certain immigrant populations: This provision would have reduced the expansion match rate from 90% to 80% for states that use their own funds to provide health coverage or financial assistance to certain groups of immigrants.

  • Ban on Medicaid coverage for gender transition services: This provision would have barred Medicaid from paying for gender-affirming treatments or surgeries for transgender individuals. Medicaid coverage for gender-affirming care remains a state-level decision.

• Many of the original HSA provisions were excluded after public backlash to the size and cost of the original bill.

  • Universal HSA eligibility: Earlier drafts allowed anyone with an ACA plan (including Silver, Gold, or Platinum) to open an HSA. The final bill restricts it to only Bronze and Catastrophic plans.

  • No cap on fitness/ wellness expenses: This provision would have added the ability to use an HSA for gym memberships and other similar physical exercise and activity costs.

  • Increased contributions: The original draft increased the HSA contribution limit by an additional $4,300 per individual or $8,550 per family and allowed both spouses to contribute.

Takeaway #5: Provisions that were cut out of the bill—including (notably for a Republican-led bill) cuts to MA—are likely to remain priorities for lawmakers to pursue through other channels.

Just because these provisions were left out of the final bill doesn’t mean they will be abandoned. We can (and should) expect them to reemerge as priorities for the GOP in the future. Most of the focus areas above are unsurprising—adding more flexibilities to HSAs, immigration reform, and limiting gender-affirming care are all core priority areas for the Republican party. But potential cuts to MA are particularly notable since the GOP has long been a proponent of MA. In his first administration, President Trump even passed an executive order with the explicit goal of growing MA. In the wake of the 2024 elections, the widespread expectation was that this administration and Congress would be friendlier to MA plans, which have seen declining profitability amid utilization swings and shifts to the reimbursement model introduced during the Biden administration.

So far, those expectations have not been realized. Not only has the Trump administration thus far opted to maintain the Biden-era changes to the star ratings and risk coding models (as we covered in an earlier post), but the fact that cuts to MA payment were a part of the negotiation process for the OBBBA (even if they weren’t ultimately passed) points to a new political reality for MA. Now that more than 50% of the Medicare-eligible population is enrolled in MA, it’s going to be hard for lawmakers to ignore it in any conversation about curtailing healthcare spending. MA is safe for now, but there's bipartisan support in reworking it. (This does not, by the way, apply to traditional Medicare, which is still very secure.)

Note: MA—and its role in both health plan and provider margins—is a perennial area of focus for us. More to come on this topic later in the year, including in our upcoming fall refresh of our State of Healthcare.

Parting thoughts: Who is most impacted—and when?

While understanding the specific provisions of the bill is helpful, it’s equally important to consider the broader and longer-term implications, including who will be most impacted and when those impacts will be felt. The bill will not impact all groups or states equally, and the timing of coverage losses or service reductions may vary depending on how states implement the law and how quickly federal guidance is issued.

So we have two more takeaways that look at the bigger picture of who will be most impacted by the bill and when those impacts will hit.

Takeaway #6: The delayed timeline of major healthcare provisions is a politically strategic move to potentially minimize voter fallout—but also leaves room for potential changes.

Let's start with the when: Despite the huge estimated impacts of the bill, it will be years before many of these changes go into effect—especially the Medicaid provisions.

The delayed start of some of the most significant Medicaid and ACA changes is widely viewed as a political strategy (one that’s been deployed by both parties in the past) to reduce the most visible coverage losses and disruptions until after the 2026 midterm elections. In the meantime, patient advocates and provider groups will likely press Congress to further delay the provisions or stop them all together. Because these changes were enacted through the budget reconciliation process, they could also be reversed using the same process—which requires only a simple majority in the Senate, rather than the supermajority of 60 votes typically needed to avoid a filibuster. But given that the bill passed along party lines in both the House and Senate, it’s unlikely that Congress would revisit or reverse most of these provisions unless there’s a shift in political control (i.e. if Democrats can win the majority in one or both houses in the upcoming midterms). That said, even if Democrats get the House in 2026, there would still be substantial gridlock. It will likely take unified control of government to enact major new changes, which is a long way of saying: OBBBA is here to stay for at least the next few years.

Takeaway #7: The ACA expansion states and populations—and the providers and plans that serve them— will bear the brunt of costs included in this bill.

While this law does not change the federal poverty level (FPL) threshold that was expanded under the ACA (138% of the FPL), the realities of the congressional reconciliation process mean that many of its provisions disproportionately affect expansion populations—both Medicaid and the ACA Marketplaces. To maintain current coverage levels, states would need to dramatically increase their own spending, which most are unlikely (or unable) to do, ultimately having an outsized impact on patients, providers, and plans in expansion states (with some downstream impacts on life science companies). 

Register for our July Board Briefing: Mid-Year Policy Update

Join our upcoming board briefing on July 24 at 1pm EST where we will cover the OBBBA in more depth, as well as take stock of how the second Trump administration and the GOP-led Congress have approached health policy in other ways thus far.

If you'd like to learn more about access to Union Healthcare's expert insight, schedule time with us to learn more about how to join, and what's included in membership: https://www.unionhealthcareinsight.com/overview.