What might US healthcare look like after One Big Beautiful Bill Act? 

If you are like us, you have been reading about how the “One Big Beautiful Bill Act” may affect public health insurance programs and healthcare providers. In the highly interconnected US healthcare system, changes in one area generally reverberate in others. In this post, we’ll outline the changes set in motion that will likely have implications for employer health plans — and offer some considerations for health plan sponsors as they plan for 2026 and beyond.

Loss of enrollment in Medicaid and ACA marketplace plans is predicted

The preliminary estimate from the Congressional Budget Office for the OBBBA projects nearly 11 million people losing coverage over the next ten years due to reductions in federal spending for Medicaid and changes to the Affordable Care Act.

The enhanced ACA marketplace coverage subsidies that were put in place during the coronavirus pandemic are set to expire at the end of the year unless Congress takes action to extend. Over 24 million Americans are enrolled in the insurance marketplace this year, and about 90 percent — more than 22 million people — are receiving enhanced subsidies. If these are allowed to expire, premiums are expected to increase by more than 75 percent on average, with people in some states seeing their payments more than double, according to health policy research group KFF. Because some won’t be able to pay the higher premiums, the CBO expects four million will end up uninsured.

Provisions in the OBBBA law that the CBO predicts will result in lower enrollment in Medicaid include new work requirements and the need to verify eligibility every six months. In the ACA marketplace, shorter enrollment periods and elimination of auto-enrollment are likewise expected to dampen enrollments. Assuming this leads to greater concentrations of high-risk individuals in ACA marketplace plans — those with the greatest need of health services — premium rates will increase.

Hospitals and clinics that serve large numbers of Medicaid patients will face significant financial pressure as Medicaid enrollment declines and states face new limits on revenues from provider taxes that they have been using to fund Medicaid payments. The combination of loss of revenue and increased uncompensated care could force service reductions and staff layoffs. States and rural health advocacy groups warn that cutting Medicaid will hit already fragile rural hospitals hard and could cause some to close (even taking into account the potential $50 billion in funding to support rural health transformation). This could leave some people living in remote areas without nearby emergency care.

Potential impacts on employer-sponsored health plans

As enrollment in Medicaid becomes more challenging and ACA plans become less affordable, employer-sponsored health plans will likely become more valuable in the eyes of current and potential employees — and even more important than they are already to recruitment and retention. Other possible impacts might include:

• Fewer employees may choose to opt out of employer coverage, increasing costs to the employer plan, especially in industries with more low-wage workers
• Employees who are not yet eligible for Medicare might delay their desired retirement date if they feel they can’t afford an ACA plan
• Employers may feel more pressure to provide health coverage to part-time employees
• More employees may choose to go without health insurance, which could impact their health and productivity

Disruption in the healthcare industry will likely affect employer payors to some extent. As hospitals lose Medicaid funds and experience higher rates of uncompensated care, they may attempt to make up lost revenue by charging higher rates to commercial plans. If some health systems are stressed to the point of bankruptcy, we’ll likely see greater provider consolidation — and these larger players will have more bargaining power with insurers, which also leads to higher costs for employer plans.

Considerations for 2026 planning and beyond

Some changes, such as the expiration of enhanced ACA subsidies, will likely hit next year, while various changes affecting Medicaid will likely phase in over a few years. While it’s not possible to predict exactly what the future holds, employers can take actions that will leave them better prepared to handle the changes that are coming. You can start to analyze how your employees and plans will be affected:

• Review current medical plan opt-outs. Is it likely that some workers might return to employer coverage? If so, what would the associated cost be? You might also consider the potential impact on early retirement.
• Analyze access to care, especially if you have workers in rural locations. If this is an issue, you may want to start working on it now. Consider direct primary care and virtual first care plan options.
• Work closely with your actuary and health plan to estimate the impact of changes on future plan performance. If budgets are sensitive to unplanned increases, you may choose to increase your margins.

In anticipation of the potential for greater cost shifting in the market, you can start to double down on financial management. In addition to network strategies that steer employees to higher value providers, employers might also review some cost management basics:

• Monitor wire activity and high-cost claims more closely with increased sensitivity to fluctuations in claims and insurance company fees.
• Revisit your audit strategy. When was the last time you conducted an audit of your health plan? Electronic audits are a good way to ensure benefits are being administered according to your contract, and the data may suggest possible plan design changes or clinical areas for more focused strategies.
• Evaluate current performance guarantees. Do they still support your current objectives, or do they need to be updated? Along with putting plans out to bid, obtaining meaningful performance guarantees is one of the most effective levers plan sponsors can pull to control cost.

Finally — and perhaps most importantly — you can establish priorities and validate them with leadership. For example, a priority might be to manage the annual health plan cost increase to a specific amount, or to maintain one low-cost or first-dollar plan to provide an affordable option for lower-earning employees. Clear priorities can be your north star when navigating challenging times.

Check out our earlier post — One Big Beautiful Bill includes employer-friendly provisions — for a run-down of the changes related to employer health and welfare programs that take effect starting January 1, 2026.