Projected Federal Savings
>$1.2T
Over ten years (2025-2034), primarily from reduced Medicaid and ACA Marketplace spending.
Projected Coverage Loss
16M
Up to 16 million people are projected to lose health insurance coverage by 2034.
The Medicaid Squeeze
The law imposes a dual pressure on state Medicaid programs: new administrative burdens increase costs while new financing restrictions reduce revenue, creating a significant fiscal challenge.
The New Disenrollment Pathway
The combination of mandatory community engagement ("work") requirements and more frequent eligibility checks creates a high-friction system where procedural hurdles, not just ineligibility, can lead to coverage loss.
Community Engagement Mandate
Beneficiaries must document 80+ hours/month of work or other qualifying activities.
6-Month Eligibility Redeterminations
Coverage must be fully re-verified twice per year, doubling the administrative burden.
Increased Risk of "Procedural" Disenrollment
Failure to navigate complex reporting leads to coverage loss, even for eligible individuals.
Declining State Financing Power
The law phases down the cap on state provider taxes, a critical tool used by nearly all states to fund their share of Medicaid costs.
ACA Marketplace Overhaul
The law reshapes the individual market by tightening access to subsidized plans while expanding consumer-directed, HSA-based options, creating a bifurcated system.
A Tale of Two Markets
New rules create divergent paths for consumers based on their income and health needs.
Higher Hurdles for Subsidized Plans
- Full repayment of excess subsidies required
- Stricter pre-enrollment verification
- Narrowed eligibility for immigrants
- Fewer Special Enrollment Periods
Expanded Path for HSA Plans
- Bronze/Catastrophic plans now HSA-qualified
- Permanent telehealth safe harbor
- Direct Primary Care pairing allowed
Potential Shift in Market Composition
This policy shift could drive healthier individuals toward HSA plans, potentially increasing premiums for those remaining in the traditional, subsidized risk pool.
Medicare & The Rural Lifeline
The law makes targeted changes to Medicare, including creating a significant loophole in drug price negotiation, while also providing a temporary, but substantial, fund for rural health.
The "Orphan Drug" Loophole
A key change allows drugmakers to shield products from Medicare price negotiation for longer by "resetting the clock" when a drug approved for a rare disease gets a new approval for a common condition.
A Temporary Lifeline for Rural Health
The new $50B Rural Health Transformation fund is a direct response to the law's deep Medicaid cuts, but it's temporary, while the cuts are permanent.
A Decade of Disruption: The Long-Term Outlook
The law's provisions will unfold over many years, creating distinct phases of implementation, realignment, and long-term consequence.
Short-Term (1-2 Years): Implementation & Disruption
States begin building complex systems for new mandates. Providers model the impact of funding cuts, leading to budget uncertainty and potential hiring freezes. Insurers begin redesigning plans for the new market structure.
Mid-Term (3-5 Years): Realignment & Coverage Loss
Work requirements and redetermination cycles become fully operational, causing projected coverage losses to accelerate. The Rural Health Fund is fully disbursed, temporarily masking deeper financial damage. The individual market visibly bifurcates.
Long-Term (6-10+ Years): The New Baseline & The Cliff
A higher uninsured rate becomes the "new normal." A critical inflection point arrives around 2031 as the Rural Health Fund expires, exposing rural providers to the full force of permanent Medicaid cuts and creating a severe "funding cliff" that could trigger a wave of facility closures.