Impact of Trump’s Tax Legislation on Health Insurance Coverage
A recent analysis by the nonpartisan Congressional Budget Office (CBO) highlights a significant shift in the U.S. healthcare landscape. According to the report, approximately 10 million Americans are projected to lose health insurance due to changes under President Donald Trump’s tax cut and spending law.
Medicaid Changes and Their Consequences
The CBO’s analysis, released on August 11, reveals that 7.5 million individuals could lose Medicaid coverage over the next decade. This is largely attributed to new requirements for nondisabled adults on Medicaid to secure employment, volunteer, or enroll in educational programs to maintain their coverage. Furthermore, states are mandated to increase Medicaid eligibility checks to twice annually.
Affordable Care Act and Additional Coverage Losses
In addition to Medicaid changes, the CBO estimates that 2.1 million people will discontinue their Affordable Care Act (ACA) coverage over the next decade. Moreover, 400,000 more individuals are expected to lose coverage due to the legislation, colloquially referred to as the “one big, beautiful bill,” which was supported by congressional Republicans.
Financial Implications of the Legislation
The CBO had previously indicated that this legislation, signed by President Trump on July 4, would contribute an additional $3.4 trillion to the federal deficit. Key components of the law include the extension of the 2017 tax cuts, the elimination of taxes on tips and overtime, and enhanced border security measures.
The legislation’s financial impact varies significantly across different income groups. Americans earning less than $23,750 annually are expected to lose approximately $1,200 each year due to changes in Medicaid and reductions in food assistance. Conversely, middle-income households may see an increase in their annual income ranging from $800 to $1,200. Wealthier Americans, those earning over $690,000 annually, stand to benefit significantly, receiving approximately $13,600 in annual tax cuts, although they will continue to pay nearly $200,000 in federal taxes annually.
Expert Opinions and Further Projections
Sabrina Corlette, co-director of Georgetown University’s Center on Health Insurance Reforms, commented on the CBO report, stating, “This is one of the most regressive pieces of legislation I’ve seen. The rich will get richer and the poor will get poorer.”
Looking Ahead: Potential for Additional Coverage Losses
While the initial estimate suggested that 11.8 million Americans could lose health insurance over the next decade, the exclusion of a provision penalizing states that extend Medicaid to undocumented residents softened the impact. However, the potential expiration of COVID-19 pandemic-era tax credits could result in nearly 5 million more individuals losing coverage if Congress does not act to extend them.
According to the nonprofit health policy organization KFF, consumers relying on these tax credits may face a 75% increase in their insurance costs. The convergence of the tax law, expiring tax credits, and rising medical costs contributes to increasing insurance premiums. Insurers are planning a median premium hike of 18% for 2026 plans, marking the most significant ACA insurance price increase since 2018, as noted in a report by the Peterson-KFF Health System Tracker released on August 6.
For further details on this topic, please visit the original article on USA TODAY: Millions will lose Medicaid under Trump’s tax law, CBO says.
