CBO Deficit Estimates & Healthcare Impacts of OBBBA

By Jessica I. Marschall, CPA, ISA AM
July 22^nd, 2025

This month, we renewed our company’s health insurance, with premiums up about 7% from 2024. Only “Applicable Large Employers” (50 or more full-time employees) are required to offer coverage, but most small businesses are not and cannot afford to. For many gig workers and small business employees, the ACA Marketplace has been the fallback. Yet those premiums are now projected to rise 6 to 15 percent, with some increases reaching 20 to 30 percent. We offer coverage because we want our team to stay alive, something that is surprisingly good for business. But among our 420 small business clients, most simply cannot afford to do the same.

The Congressional Budget Office (CBO) has released its final cost estimate for the “One Big Beautiful Bill Act” (OBBBA), revealing that the legislation will increase the federal deficit by approximately $3.4 trillion over the next decade, excluding interest. When the added cost of interest on the debt is included, the total rises to an estimated $4.1 trillion. These figures confirm earlier warnings about the fiscal strain this sweeping legislation could impose. Despite minor adjustments made during the House amendment process, the core impact remains largely unchanged: the bill delivers significant tax relief and incentives in the short term but adds a massive burden to long-term federal finances. The CBO’s findings suggest that these costs are not offset by commensurate spending reductions or revenue increases, making fiscal recovery over the next decade more difficult. Critics, including bipartisan budget watchdogs, note that the bill leans heavily on optimistic economic assumptions and temporary revenue boosts, while locking in permanent tax cuts that will reduce federal revenue for years to come.

Among the most pressing concerns is the bill’s impact on health insurance coverage and public health infrastructure. According to the CBO, approximately 10 million Americans are expected to lose health coverage by 2034 as a result of the bill’s provisions. Independent analyses and reporting from multiple outlets place that figure even higher, with The Guardian citing nearly 11 million individuals who may become uninsured. These projections stem from a combination of cuts to Medicaid, the rollback of Affordable Care Act (ACA) marketplace subsidies, and the introduction of new eligibility requirements. Medicaid alone is projected to face reductions of more than $900 billion over the coming decade. This includes new work requirements, shorter renewal periods, and administrative hurdles that are expected to result in millions of Americans being removed from the rolls, particularly among low-income, elderly, and rural populations.

The elimination of enhanced ACA subsidies further compounds the problem. Without these subsidies, many Americans will no longer be able to afford marketplace coverage. A recent article from CNBC confirms that insurers in nearly every state are filing for significant premium increases for 2026, with many citing the rollback of federal support as a primary driver. Health System Tracker notes that insurers on the individual market are requesting the largest rate hikes in more than five years, with proposed increases in some states exceeding 20 percent. In Tennessee, for example, the Tennessean reports that insurers are seeking average increases of 17 to 22 percent for marketplace plans. According to NPR and the Kaiser Family Foundation, a national trend of accelerating premium growth is emerging, as carriers brace for higher uncompensated care costs and fewer healthy enrollees due to the withdrawal of subsidies.

These developments are expected to disproportionately affect middle-income families who earn too much to qualify for Medicaid but can no longer afford unsubsidized premiums. While the wealthiest Americans benefit from expanded deductions and favorable tax treatment under the bill, those in the working and middle class may face rising out-of-pocket costs, reduced plan availability, or complete loss of coverage. The destabilization of the individual market, triggered by policy uncertainty and subsidy reductions, threatens to reverse gains in coverage made since the ACA was first enacted.

Hospitals and healthcare providers, especially in rural areas, are expected to bear the downstream effects of increased uncompensated care. The bill does allocate a $50 billion fund to support struggling rural hospitals, but experts note that this amount is unlikely to offset the broader financial disruption. Providers will face more patients unable to pay, increasing bad debt and threatening access to services in medically underserved regions. As coverage shrinks, delayed care and poorer health outcomes are anticipated, placing additional pressure on emergency services and community clinics already operating with limited resources.

While the One Big Beautiful Bill promises significant benefits for taxpayers through enhanced deductions and new savings vehicles, the CBO’s final score underscores the extent to which these benefits come at the expense of fiscal stability and public health infrastructure. The bill prioritizes tax relief and economic incentives, but does so by shifting costs onto the healthcare system and vulnerable populations, creating a long-term trade-off that policymakers and the public will need to reckon with in the years ahead.

Sources:

https://www.crfb.org/press-releases/final-obbba-score-confirms-long-road-fiscal-recovery

https://www.investopedia.com/here-s-what-s-in-trump-s-one-big-beautiful-bill

https://www.cbo.gov/publication/61533

https://www.washingtonpost.com/politics/2025/06/09/trump-tax-spending-cbo-omb

https://www.marketwatch.com/story/this-is-how-much-trumps-megabill-could-add-to-the-deficit

https://moneyweek.com/economy/us-economy-donald-trump-one-big-beautiful-bill-consequences

https://www.ft.com/content/01052f13-f5cb-4dae-859f-c43a4d1e0ed9

https://apnews.com/article/medicaid-trump-tax-cuts-deficits-6a58710651382dcce5083b31ac985042

https://www.houstonchronicle.com/health/article/texas-medicaid-cuts-big-beautiful-bill-20774741.php

https://www.investors.com/news/big-beautiful-bill-trump-budget-health-care-coverage

https://www.cnbc.com/2025/07/22/aca-health-insurance-trump-taxes.html