Deeper Insurance Cuts in Budget Bill

Col#253- 8/7/25

DEEPER INSURANCE CUTS
IN BUDGET BILL
By
Richard Davis

Digging deeper into the 2025 budget bill reveals that Medicaid is not the only insurance that will be in jeopardy. Premiums for people insured under the Affordable Care Act, (ACA or Obamacare) will see steep rises in insurance premiums and the Medicare program will see cuts that will indirectly harm the senior population.

According to a recent article in “The American Prospect”, “The combination of the One Big Beautiful Bill Act’s (OBBBA) cuts to Medicaid (and, unless Congress does something about it, to Medicare) and the failure to extend enhanced ACA tax credits for exchange participants will cause roughly 15 million Americans to lose their health insurance, according to the latest estimates. Those who hang on to pay the higher rates are disproportionately likely to really need insurance due to medical conditions. This will tend to create sicker insurance pools, meaning more claims payouts by insurers.”

More than 25% of ACA insurers are asking for premium increases of over 20% with a median of 15% which is double the increase from last year. Reliable estimates indicate that out of pocket premiums for the ACA will increase by 75% because Republicans refused to continue tax credits that have been part of the ACA. That means that a household above 400% of the Federal Poverty Level will no longer be eligible for premium assistance. A family of 2 with an income of $84,000 will have no subsidy assistance and a single person who earns $62,000 will also be hit with a 75% increase.

This kind of news doesn’t always make it into the mainstream media but these cuts will take affect in 90 days and people who try to renew their policies are going to have to make some tough decisions. They will have to decide if they can still afford health insurance. In these difficult times that will only add more stress to the already stressed out lives that too many of us lead.

In political terms, it is important that people realize that they are getting screwed by Trump and all of the Republicans who supported the 2025 budget bill. The only way we can make them accountable is to vote them out of office. People enrolled in red states should feel betrayed by their politicians when they realize that they may not be able to afford health insurance in 2026. All of these cuts are being done to offset tax cuts for rich people.

Healthy young people may be able to take the risk of not having insurance but people who are younger than 65 will put not only their own health at risk but also risk creating unsupportable increases in health care utilization. That puts a bulls eye on all health care providers, especially hospitals.

The Prosect article also notes that, “The other lever that insurance companies can pull besides hiking premiums is denying expensive treatment, which is also happening. Prescription drug denials, for example, have shot up 25 percent in the last decade. It’s unclear whether this huge cost shift will spur Republicans to extend the ACA subsidies into 2026. That would be a simple way to eliminate what will otherwise be a massive cost burden that millions will receive notification about in just a few months from today.”

There will also be a 4% cut in the Medicare budget in 2026 which is projected to decrease access to care and affordability significantly. The cuts will affect providers first and that means that hospitals and clinics and all other providers are going to have to make changes to systems that are already in financial jeopardy. Expect layoffs and programs cuts at levels we have never seen before as the Medicare program is once again attacked by entitled Republicans who could care less about the average American.