President Donald Trump has signed the “One Big Beautiful Bill Act,” which includes major spending and policy changes for the Medicaid program and ACA markets.
Jarrod McNaughton, CEO of Inland Empire Health Plan, wrote on LinkedIn on July 3 that the bill will lead to “detrimental and devastating” effects across the healthcare system and detailed what they would look like for his organization.
“Regardless of what health plan you may be covered by, everyone in the country will be impacted by this bill,” Mr. McNaughton wrote. “As emergency rooms see more patients who once had access to primary care, wait times for everyone will increase. As hospitals and providers had supplemental payments to help offset costs that government payors don’t fully cover, private insurance rates will go up and cost shifting will once again be the norm in our country.”
Six notes:
1. IEHP predicts that its membership will decrease by 300,000 from its current 1.5 million, with the next two years “when the most significant losses of coverage will occur.”
2. Covered California, the state’s ACA exchange, is expected to lose 40% of its total 1.8 million members as premium tax credits expire.
3. The Medicare Advantage Value-Based Insurance Design Model will sunset at the end of 2025, affecting benefits for members who are eligible for both Medicare and Medicaid.
4. Special provider tax rates will decrease, with expansion states such as California seeing its Medicaid tax rate of 6% drop 0.5% a year until it reaches 3.5% in 2032.
5. In expansion states that have state directed payments in effect before May 1, 2025, reductions of 10% a year will take place, starting in 2028, until they reach payments equaling 100% of Medicare.
6. The bill allocates $50 billion over five years to rural hospitals beginning in fiscal year 2026. Half the funds each year will be distributed equally among all states and 50% will be allocated at CMS’ discretion.
