Popping Open the BBB - Healthcare
By Scott Bailey, District 2 Neighbors’ Resident Economist
Congress recently passed, and the President signed, a budget bill that has to rank as one of the most cruel and destructive pieces of legislation in the history of our great country. The BBB (use your imagination to come up with your own “B”s, but this is a family friendly publication so we’ll stick with BBB) will be phased in over the next three years, and includes:
Changes in personal taxes and corporate taxes.
The phasing out of subsidies for renewable energy.
Huge cuts to Medicaid and smaller but significant cuts to Affordable Care Act (“Obamacare”) coverage.
Cuts in Supplemental Nutrition Assistance Program (SNAP, also known as food stamps).
Big increases in military spending and a doubling of Immigration and Customs Enforcement (“ICE”) budget.
Impacts on the timber industry.
Beginning with this issue, our newsletter will have a regular feature reviewing what’s in the BBB and link it with other related actions of the administration. There is a LOT in this bill. A few items have gotten some press coverage; many others have so far gone under the radar. In isolation, many of the policy and funding changes look bad; taken as a whole, this bill may have dire consequences for families and communities, the economy, and even our democracy. In this series of short articles, we’ll highlight some of the most significant impacts of this sprawling bill, in gory detail.
I’ll begin with an important part of the social safety net: health care.
The Trump Administration is already having a long-term impact on health care in the US through (for example) major cuts in health research, firing 20,000 workers in the Department of Health and Human Services, and replacing scientists with conspiracy theorists on a vaccine advisory task force. The proposed budget cuts for the National Institute of Health would decimate health research. According to one estimate, the budgetary savings of $500 billion over a 25-year period would be offset by the loss of 82 million years of life for Americans. Translating that into dollars in terms of economic impact (how much is a year of life worth?), a conservative estimate would be a loss of $8.2 trillion. In other words, this is awful because it would shorten people’s lives AND it would have a massively large negative impact on the economy.
Medicaid
The changes in Medicaid promise more of the same. About 71.4 million people were enrolled in Medicaid in January 2025. About 36% of those were children, 44% were adults, and 20% were elderly, blind and/or disabled. From another perspective, 41% of all children in the country and 15% of all adults were covered by Medicaid. In Oregon, 1.1 million people—26% of our population overall —were covered, versus 21% of the U.S. population. More than half of all children in Oregon (57%) are covered by Medicaid.
The BBB will cut Medicaid coverage for an estimated 11.8 million people nationwide by 2034. In addition, another 4.2 to 5 million people will be unable to afford health insurance due to Congress not extending enhanced tax credits for insurance. A total of 220,000 people in Oregon will lose coverage. Here’s what’s happening:
“Medicaid applicants who are between 19 and 64 years old will need to certify they are working at least 80 hours a month or spending that much time engaged in comparable activities, such as community service. When these rules have been introduced to other safety net programs, most people lost their benefits due to administrative hassles, not because they weren’t logging enough hours on the job.”
Currently, states “can only conduct eligibility determinations for people who are aged, blind, and disabled once a year”, and that “state cannot require in-person interviews during eligibility redeterminations for that group of enrollees.” The BBB eliminates these rules, making it more of a burden for the aged, blind and disabled to maintain their enrollment, leading to an estimated 600,000 of our most vulnerable neighbors losing Medicaid.
States will be forced to check Medicaid eligibility every six months instead of once a year, which will lead to people losing eligibility sooner than current practice. This will require more staffing at the state level, and could lead states to decrease coverage because of higher administrative costs.
“An additional 1.4 million would lose coverage because they may not meet new citizenship or immigration requirements.” Certain categories of legal immigrants will no longer be eligible for Medicaid, unless states forgo the 90% federal matching funds, making it prohibitively more expensive.
“Many of those who aren’t kicked out of Medicaid would also face new copayments of up to US$35 for appointments and procedures – making them less likely to seek care, even if they still have health insurance.”
“The new policies also make it harder for states to pay for Medicaid, which is run by the federal government and the states. They do so by limiting the taxes states charge medical providers, which are used to fund the states’ share of Medicaid funding. With less funding, some states may try to reduce enrollment or cut benefits, such as home-based health care, in the future.”
ACA Marketplace (Obamacare)
In addition to Medicaid, the number of people being able to buy “marketplace” health insurance through the Affordable Care Act (Obamacare) will decline by an estimated 4 to 5 million. The BBB cuts the “enhanced” tax credit for health insurance, which will make premiums unaffordable for millions. Also, some legal immigrants will become ineligible for ACA coverage (similar to the changes in Medicaid).
Medicare
Because the BBB greatly increases the federal budget deficit, it activates a 2010 law known as Pay As You Go or PAYGO (championed by Democrats!) which requires proportional budget cuts in some federal spending categories. In particular, as things now stand, Medicare will be subject to a $45 billion budget cut next year, with a total projected cuts of $500 billion over the next eight years. It’s unlikely that Congress will vote to protect Medicare, since Senate PAYGO rules require a 60 vote supermajority.
I haven’t found an analysis of how Medicare cuts will impact services, but I would guess it would be some combination of higher premiums for seniors and a reduction in coverage.
Timing is everything:
A 10-year ban on all Medicaid funding for Planned Parenthood would take effect as early as August 2025.
ACA premiums will go up in November 2025.
Medicare budget cuts begin in 2026.
New Medicaid eligibility rules go into effect in January 2027. Congress delayed enactment in order to lessen voters’ anger before the midterm elections—just another example of them trying to avoid accountability.
The upshot?
The number of Americans without health insurance, which has dropped steadily since the passage of the ACA, will likely rise from 25.3 million in 2023 to around 42 million—a decade of improvement almost entirely wiped out. While the ACA and Medicaid fall well short of the universal health care system we deserve, they are better than nothing. And remember the cuts were done in order to pay for tax cuts for the rich.
About the Author
Scott Bailey has a master's degree in economics from PSU, worked as an economist for 37 years (mostly for the state of Washington), and still teaches and makes presentations on the economy.