It’s not repeal, but Congress is about to slash ‘Obamacare’
Republicans aren’t trying to repeal and replace “Obamacare” this time around, but the massive healthcare cuts Congress and President Donald Trump are poised to enact would have a similar effect on the healthcare system.
Add in actions the Trump administration has taken or plans to take and a pending Supreme Court ruling, and the outcome would look pretty similar to unraveling the Affordable Care Act of 2010, even though the GOP is not reviving controversial proposals to weaken the law’s protections for people with preexisting conditions or dismantle the health insurance exchanges
The biggest and most immediate challenges to the exchanges and Medicaid expansion come from One Big Beautiful Bill Act of 2025, which the House approved last week and the Senate is due to pick up next week. Congressional Republican leaders aim to send a bill to the White House by July 4.
The House-passed legislation would extend expiring tax cuts from Trump’s first term and add a few new ones at a cost of $3.8 trillion over 10 years. It’s partially paid for by extracting enormous savings from the healthcare sector, including around $700 billion from Medicaid and more than $100 billion from the health insurance exchanges.
No lawmaker is using the words “repeal and replace” as they did eight years ago, but the size of the spending cuts and their targets are directionally similar, advocates and analysts said.
Enacting the One Big Beautiful Bill Act and allowing enhanced marketplace subsidies to expire at the end of this year would take more than $1 trillion out of the healthcare system, according to an analysis the Urban Institute and the Robert Wood Johnson Foundation published Thursday. Providers would be on the hook for $278 billion in uncompensated care for newly uninsured people, the report concludes.
“The cuts that they propose are on the same scale in terms of funding cuts and people losing coverage,” Anthony Wright, executive director of the left-leaning Families USA, said during a news conference April 28. “It’s repeal, just without the replacement.”
People who do business connecting insurers and providers see a similar potential outcome. MacroHealth CEO Virgil Bretz said because so many provisions in the bill make it harder for people to get coverage, it could trigger a “death spiral” in the risk pool as healthier people opt out, leaving insurers with costlier memberships.
“It’s kind of like boiling a frog,” Bretz said. “There’s no one big cut where there’s this epic vote where they’re going to kill off the ACA or Obamacare or kill off Medicaid. It’s just lots of little things that make it more difficult. In the case of an exchange-type marketplace where you need private insurers to provide coverage, there’s a breaking point when you don’t have enough participation. Then it just stops working.”
Some Republicans are clear that they would still like to repeal Obamacare and want the final bill to go further than what the House approved. These lawmakers particularly would like to end funding for the Medicaid expansion, for which the federal government pays 90% of the cost.
Senate Majority Whip Dr. John Barrasso (R-Wyo.) said the expansion was “nuts” because federal taxpayers cover such a greater share of costs than under traditional Medicaid funding formulas. “The enhanced funding was a Democrat bribe to bait states into expanding their programs under Obamacare,” the orthopedic surgeon said at the American Hospital Association annual meeting in Washington on May 6.
Similarly, Rep. Chip Roy (R-Texas) stalled the bill just before it hit the House floor last week, in large part because he favors cutting funding for the Medicaid expansion. “Congress has no excuse for failing to seize the moment to address this failing Obamacare policy just as Republicans have said they would for the last 15 years,” Roy said in a new release May 9. “If we do not, we will be one step closer to a fully socialist healthcare system.”
One big, beautiful bill
The House-passed bill would not go as far as these Republicans would like, but it contains provisions that take big bites out of the ACA.
The biggest come from the House Energy and Commerce Committee’s portion of the legislation. These elements would cut hundreds of billions in revenue for providers and insurers by instituting new work and eligibility requirements for Medicaid, some of which are specific to the expansion population. According to the nonpartisan Congressional Budget Office, imposing those rules in 2029 would cut about $280 billion over six years, but the revised bill that passed the House moves the start to 2027, likely cutting at least $70 billion more.
There are also stepped-up reviews of eligibility and residency in Medicaid that would cut another $70 billion. The CBO estimated the Medicaid changes would leave 7.6 million people without coverage.
The disappearing $1 trillion
Enacting the One Big Beautiful Bill Act and allowing enhanced health insurance subsidies to expire would decrease spending on healthcare services by more than $1 trillion over a decade, according to the Urban Institute.
Total: $1.03 trillion
People who run afoul of the work requirements and eligibility checks also would be barred from getting subsidies on the exchanges. This part of the House Ways and Means Committee’s section of the bill would reduce tax credit payments to health insurance companies by $50 billion, according to an analysis the nonpartisan congressional Joint Committee on Taxation issued Wednesday.
Other Ways and Means Committee provisions targeting the ACA include tougher eligibility verifications, saving $41 billion; barring premium tax credits during certain special enrollment periods, saving another $41 billion; and eliminating upper limits for recapturing excess subsidies to save $20 billion.
Exactly how all of these provisions would interact is unclear, but the CBO estimated that the Energy and Commerce Committee section of the legislation would reduce spending on the exchanges by $101 billion. According to CBO and other analysts, about 4 million people would lose marketplace coverage.
Enhanced ACA subsidies
While the tax-and-spending-cuts bill goes after the expansion population and whittles away at marketplaces, those are not the only threats to the ACA. The Centers for Medicare and Medicaid Services has proposed shortening the open enrollment period and slashed funding for enrollment assistance by 90%, for instance.
The Supreme Court heard arguments last month in a case backed by GOP state attorneys general that would limit the ACA’s rules requiring insurers to cover preventive healthcare services without cost sharing. The Trump administration is defending this part of the law.
And the tax bill leaves out a major priority for health insurance companies, providers and others: renewing the enhanced exchange subsidies President Joe Biden enacted in 2021, which are due to expire at the end of the year. The loss of those more generous tax credits would push another 4.2 million people out of the marketplaces, according to the CBO.
Marketplace sign-ups hit record levels over the last two years, exceeding 24 million during open enrollment for 2025. The combined losses would cut that by a third or so, the CBO projected.
Then there are bills some Republicans would like to pass that are not included in the tax bill, which would also be a drag on the marketplaces.
House Education and Workforce Committee Chair Tim Walberg (R-Mich.), for instance, wants to revive short-term, limited-duration health plans and association health plans that are not subject to ACA benefit rules and therefore would cost less, which could lure healthy customers from the exchanges.
Anne Shoup, senior adviser for strategic planning and projects at the liberal Protect Our Care, said it all effectively adds up to Obamacare repeal.
“They’re not calling it a repeal, of course, because that’s deeply unpopular. They learned their lesson here, so they’re chipping away at all of these things,” Shoup said during the April 28 news conference. “It doesn’t say, ‘Kick a bunch of people off of healthcare,’ but that’s the outcome.”
—-TheBeat Daily
