Health Affairs: Health Care Provisions in the “Big Beautiful Bill”
The House-passed reconciliation package proposes massive Medicaid cuts, marketplace restrictions, and new benefits for higher-income earners.
Katie Keith’s latest analysis in Health Affairs offers one of the clearest explanations yet of what’s in the House Republicans’ newly passed reconciliation package – formally titled the “One Big Beautiful Bill Act.” Keith details how this dense, sweeping piece of legislation could reshape health care for millions of Americans if it becomes law.
As someone who’s worked inside the health insurance industry and seen how policy changes ripple through Americans’ lives, I want to call attention to some of the most important health care provisions she outlines.
1. Significant Changes to Medicaid
The bill would reduce federal Medicaid spending by nearly $700 billion over 10 years.
It introduces work requirements nationwide for many adult Medicaid enrollees, beginning as early as 2026.
States would be required to recheck eligibility for many enrollees more frequently.
Additional provisions include modest copays for certain enrollees, limits on retroactive coverage, and a 10-year ban on federal funding for Planned Parenthood.
A new policy would also bar federal Medicaid and CHIP funds from covering certain treatments related to gender dysphoria.
2. Adjustments to Marketplace Coverage Rules
The legislation would make it harder for some individuals to maintain or enroll in Affordable Care Act (ACA) plans.
It removes automatic re-enrollment, limits special enrollment periods, and adds new verification requirements.
Out-of-pocket limits would rise, and protections that prevent repayment of tax credits in certain situations would be rolled back.
3. Expanded Use of Tax-Advantaged Accounts
The bill expands access to Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs)—options that tend to benefit individuals with higher incomes or those with more predictable medical expenses.
Employers would also be offered temporary tax incentives to encourage the use of HRAs for individual coverage.
4. Revised Policies on State Medicaid Flexibility
States that use their own funds to expand access to coverage for undocumented individuals would face a reduction in their federal Medicaid match rate, though some exceptions are included for pregnant women and children.
States would also face new limitations on how they can raise revenue for their Medicaid programs.
5. Other Notable (and Arguably More Positive) Provisions
Updates to the Medicare physician fee schedule.
Adjustments to the orphan drug rule within Medicare’s drug pricing program.
New reporting requirements for pharmacy benefit managers (PBMs).
A $100 million appropriation to support regulatory review efforts within the Office of Management and Budget.
Resumption of cost-sharing reduction (CSR) payments to insurers, which help reduce out-of-pocket costs for low-income enrollees.
The bill would also freeze any state or local regulation of artificial intelligence systems.
While this legislation is still making its way through Congress, it’s clear that it proposes major changes to the structure of health coverage for tens of millions of Americans. Some provisions are aimed at controlling costs and tightening oversight. Others would shift responsibility to states or reshape coverage access for certain populations.
Whatever your perspective, Katie Keith’s analysis is a helpful starting point to understand what’s in the bill and what’s at stake. It’s a conversation we should all be paying close attention to.
Speaking for someone who works with clients enrolling in individual market plans primarily on the Marketplace, the proposed changes are significant.
The most impactful Marketplace specific changes in our opinion (quotes are pulled from the KFF summary):
End to autorenewals: An end to autorenewals will mean every enrollee will need to be actively renewed for 2026. We push active renewals far harder than most brokers, so this will be less of a hit to us than others, but I'd expect around ~12% of our clients ignored all of the outreach encouraging active renewal and autorenewed this year. Especially for enrollees in this market for multiple years who are accustomed to their plan autoenrolling, there will be a ton of confused enrollees who either lose coverage altogether or lose their premium/plan subsidies come January.
"Requires that all premium tax credit recipients repay the full amount of any excess, no matter their income." This would be a complete removal of the repayment caps regardless of income (over or under 400% FPL). This will increase the amount of premium tax credit repayment for enrollees. Many are already afraid that they will get burned when they file if they accept the subsidies as an advance. Often I would explain how the caps work and that would effectively allay those fears. The end result will be less enrollees as some either artificially inflate their income projection leading to premiums too high for them to pay and others who decide not to enroll at all out of fear or subsidy repayment.
Also, only immigrants who are LPRs or “green card” holders would be eligible to enroll (significant reduction in who is eligible) and, of those, immigrants who are not eligible for medicaid due to not being legally present for 5 years would lose subsidy eligibility. We probably have 20-30 people in this group.
Of course, the loss of the covid-era/american rescue plan expanded premium subsidies is the biggest impact though that's not being caused by this bill specifically as they were designed to sunset at the end of 2025.
One positive: "Return to funding CSRs through payments from the federal government with explicit congressional appropriation of funds." This could reduce premiums in my state. It's bad for states that allowed "silver loading" which dramatically increased premium tax credits overall, but Indiana never allowed that.
Finally, most of these changes are set to kick in 1/1/26 which is outrageously soon given that carriers are filing rates for 2026 right now. If passed, HHS and the carriers will struggle to implement and provide notice of all of these changes by the start of OEP.
The current administration and Congress could find themselves in damage control mode by Christmastime or earlier. This is because of the combined financial strain from: sharply rising health insurance costs for individuals and the loss of medicaid benefits, the restarting and increasing burden of federal student loan payments throughout the fall, and market disruptions caused by tariffs and general ongoing regulatory uncertainty across all industries.
Unfortunately, there are no silver bullets to address the very complicated U.S. healthcare system - no one wants to limit/restrict access to needed healthcare. However, some form of disruption is needed along with a return to self-responsibility. Historically, any policy will result in consequences that favor some and disadvantage others. By not taking action we will all lose - similar to building muscle, some breakdown is necessary - in the end we will all be better by taking action.