Millions set to lose government health coverage after new tax law takes effect
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A recent federal report warns that millions of Americans could be left without crucial health coverage in the coming years.
Changes under a new tax and spending law will make it harder for some to keep public insurance, and premium hikes are expected to make private coverage less affordable.
Analysts say low-income households will be hit the hardest, while wealthier Americans are set to gain the most from the law’s provisions.
The changes are expected to ripple through both government health programs and the Affordable Care Act marketplace.
About 10 million people are projected to lose health insurance under the legislation, according to the Congressional Budget Office (CBO).
The CBO says 7.5 million will lose Medicaid coverage over the next decade.
Nondisabled adults on Medicaid will be required to work, volunteer, or enroll in school to remain eligible. States must also verify Medicaid eligibility twice a year instead of once.
Another 2.1 million will lose Affordable Care Act coverage, and 400,000 more will lose coverage due to other impacts of the law.
The measure—nicknamed the One Big Beautiful Bill—extends the 2017 tax cuts, ends taxes on tips and overtime, and increases border security spending.
The CBO previously estimated it would add $3.4 trillion to the federal deficit.
Lower-income Americans earning less than $23,750 annually will lose about $1,200 per year in benefits due to Medicaid changes and reductions in food assistance.
Also read: Nearly 1.8 million Texans have lost Medicaid coverage—here’s what that means for health care access
Middle-income households are expected to gain between $800 and $1,200.
Wealthier Americans, earning more than $690,000 annually, will see an average tax cut of $13,600, though they will still pay nearly $200,000 in federal taxes each year.
Sabrina Corlette, co-director of Georgetown University's Center on Health Insurance Reforms, said the report shows “who benefits and who doesn’t under the legislation.”
Earlier, the CBO warned that the original Senate version of the bill could have left 11.8 million without coverage by 2034.
That number is smaller in the final version because it excluded a penalty for states that expand Medicaid to undocumented residents.
Still, nearly 5 million more could lose coverage if pandemic-era Affordable Care Act tax credits are not renewed.
Those credits have kept marketplace plans affordable, but they are set to expire.
If that happens, consumers would see their costs rise by an average of more than 75%, according to KFF.
Also read: Is your healthcare at risk? Millions could lose coverage if Medicaid cuts become law
Rising medical costs are also expected to push premiums higher for everyone.
A Peterson-KFF Health System Tracker report says insurers are planning a median ACA premium increase of 18% in 2026—the biggest jump since 2018.
“This is one of the most regressive pieces of legislation I’ve seen,” Corlette said. “The rich will get richer and the poor will get poorer.”
Read next: Taxpayers stand to save $30 billion with Medicaid reform
What do you think about the Medicaid work requirements and premium hikes? Do you believe these changes will help or harm most Americans? Drop a comment and share your thoughts with The GrayVine community.
Changes under a new tax and spending law will make it harder for some to keep public insurance, and premium hikes are expected to make private coverage less affordable.
Analysts say low-income households will be hit the hardest, while wealthier Americans are set to gain the most from the law’s provisions.
The changes are expected to ripple through both government health programs and the Affordable Care Act marketplace.
About 10 million people are projected to lose health insurance under the legislation, according to the Congressional Budget Office (CBO).
The CBO says 7.5 million will lose Medicaid coverage over the next decade.
Nondisabled adults on Medicaid will be required to work, volunteer, or enroll in school to remain eligible. States must also verify Medicaid eligibility twice a year instead of once.
Millions set to lose government health coverage after new tax law takes effect. Image Source: Nappy / Unsplash
Another 2.1 million will lose Affordable Care Act coverage, and 400,000 more will lose coverage due to other impacts of the law.
The measure—nicknamed the One Big Beautiful Bill—extends the 2017 tax cuts, ends taxes on tips and overtime, and increases border security spending.
The CBO previously estimated it would add $3.4 trillion to the federal deficit.
Lower-income Americans earning less than $23,750 annually will lose about $1,200 per year in benefits due to Medicaid changes and reductions in food assistance.
Also read: Nearly 1.8 million Texans have lost Medicaid coverage—here’s what that means for health care access
Middle-income households are expected to gain between $800 and $1,200.
Wealthier Americans, earning more than $690,000 annually, will see an average tax cut of $13,600, though they will still pay nearly $200,000 in federal taxes each year.
Sabrina Corlette, co-director of Georgetown University's Center on Health Insurance Reforms, said the report shows “who benefits and who doesn’t under the legislation.”
Earlier, the CBO warned that the original Senate version of the bill could have left 11.8 million without coverage by 2034.
That number is smaller in the final version because it excluded a penalty for states that expand Medicaid to undocumented residents.
Still, nearly 5 million more could lose coverage if pandemic-era Affordable Care Act tax credits are not renewed.
Those credits have kept marketplace plans affordable, but they are set to expire.
If that happens, consumers would see their costs rise by an average of more than 75%, according to KFF.
Also read: Is your healthcare at risk? Millions could lose coverage if Medicaid cuts become law
Rising medical costs are also expected to push premiums higher for everyone.
A Peterson-KFF Health System Tracker report says insurers are planning a median ACA premium increase of 18% in 2026—the biggest jump since 2018.
“This is one of the most regressive pieces of legislation I’ve seen,” Corlette said. “The rich will get richer and the poor will get poorer.”
Read next: Taxpayers stand to save $30 billion with Medicaid reform
