The Healthcare Costs of Trump’s Big Beautiful Bill

Summary

Summary of "The Healthcare Costs of Trump’s Big Beautiful Bill" – The Journal Podcast

Podcast Information:

• Title: The Journal.
• Hosts: Ryan Knutson and Jessica Mendoza.
• Description: The most important stories about money, business, and power.
• Co-produced by: Spotify and The Wall Street Journal.
• Episode: The Healthcare Costs of Trump’s Big Beautiful Bill
• Release Date: July 9, 2025

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Introduction

In this episode of The Journal, hosts Annie Minoff and Dominique Mossbergen delve into the ramifications of President Trump's signature legislation, dubbed the "Big Beautiful Bill," focusing primarily on its impact on the U.S. healthcare system. Signed into law on July 4th, the bill marks a historic shift in federal healthcare spending, particularly targeting Medicaid.

The Passage of the Big Beautiful Bill

The legislative journey of the Big Beautiful Bill was contentious, with narrow margins determining its passage. Senator Thom Tillis voiced significant reservations, expressing his opposition to the bill's extensive Medicaid cuts. Addressing the Senate Floor, Tillis stated at [00:34] "So what do I tell 663,000 people in two years or three years when President Trump breaks his promise by pushing them off of Medicaid because the funding's not there?" His concerns echoed those of several Republican senators, yet the bill ultimately secured passage.

Dominique Mossbergen highlights the magnitude of these cuts: "The big beautiful bill represents the biggest cuts to federal healthcare spending and to Medicaid specifically in history" ([01:26]).

Understanding Medicaid

Medicaid, established in 1965, serves as a vital safety net for approximately 70 million Americans, including low-income families, the elderly, and individuals with disabilities. Unlike Medicare, which provides coverage primarily for those over 65, Medicaid's flexibility allows states to administer programs tailored to their populations. As Mossbergen explains, "If you know one state's Medicaid program, you understand one state's Medicaid program. Like they're all so different" ([04:56]).

The Affordable Care Act (ACA) of 2010 expanded Medicaid to include adults without disabilities and with incomes up to 138% of the federal poverty level, approximately $20,000 annually for an individual in 2024. While this expansion was a significant stride in healthcare coverage, it faced staunch opposition, particularly from Republican lawmakers, leading to a Supreme Court ruling in 2012 that made Medicaid expansion optional for states. As of the episode's release, 40 states plus Washington D.C. have adopted the expansion, leaving 10 predominantly red-leaning states opting out.

Republican Opposition and Fiscal Considerations

The Republican critique of Medicaid expansion centers on both philosophical and fiscal grounds. Mossbergen discusses the libertarian perspective: "Some Republicans have issues with Obamacare. They believe that expanding Medicaid discourages self-sufficiency by providing a safety net that might reduce the incentive to work" ([06:54]). Additionally, Medicaid's substantial cost—$880 billion in the 2023 fiscal year, with the federal government covering 69%—posed a challenge for lawmakers seeking budgetary savings to fund initiatives like Trump's 2017 tax cuts.

In pursuit of fiscal restraint, Republicans targeted Medicaid as a significant area for budget cuts. Contrary to the White House's claims that the bill strengthens Medicaid by addressing waste, fraud, and abuse, Senator Thom Tillis criticized the inclusion of non-citizens in the program: "They're looking at fraud, waste and abuse. And nobody minds that if illegal immigrants are in the mix..." ([08:58]).

Projected Impact on Medicaid Coverage

Independent consultants estimate that the Big Beautiful Bill could result in approximately 8.7 million fewer individuals covered by Medicaid over the next decade. A primary mechanism for this reduction is the introduction of work requirements for Medicaid eligibility. Mossbergen outlines that adults aged 19-64 will need to work, volunteer, or attend school for 80 hours per month to qualify, with exemptions for specific groups such as those with disabilities or parents of young children ([09:33]).

Furthermore, the bill mandates more frequent requalification processes, shifting from annual to biannual assessments of eligibility. This increased bureaucratic burden is expected to disqualify many eligible individuals who may struggle with the administrative demands, as Mossbergen notes: "People who are eligible... are going to lose coverage because they just can't keep up with the paperwork" ([10:37]).

Effects on Healthcare Providers

Beyond individual coverage losses, the Big Beautiful Bill poses significant challenges for healthcare institutions, particularly hospitals that serve large Medicaid populations. In Louisiana, hospitals have raised alarms, describing the Medicaid cuts as "historic in their devastation" ([12:15]). These institutions argue that Medicaid reimbursements are often insufficient, resulting in financial losses for each dollar spent on patient care. The bill's reduction of Medicaid payments by nearly $665 billion over the next decade exacerbates this issue, threatening the viability of rural and urban safety-net hospitals alike.

Mossbergen emphasizes the precarious position of hospitals: "Hospitals say that if not, we're going to really struggle" ([13:17]). The provision of a $50 billion relief fund for rural hospitals was included in the Senate negotiations, yet its sufficiency remains in question. Institutions like Our Lady of the Angels Hospital in Louisiana and the University of Kentucky have signaled potential closures and pauses in critical expansions due to financial strains ([16:11]).

Administration's Stance and Long-Term Implications

The Trump administration maintains that media portrayals of the Medicaid cuts are exaggerated, asserting that the bill focuses on eliminating inefficiencies: "This bill is really targeting waste, fraud and abuse and is really making sure that the most vulnerable Americans are getting the care that they need" ([16:40]).

However, many view the Big Beautiful Bill as a partial rollback of the ACA, reshaping the legacy of Obamacare. As Mossbergen articulates, "Some people are seeing this bill as a sort of partial repeal of Obamacare... there is a rolling back that we're seeing here" ([16:49]).

The full consequences of the bill are anticipated to unfold over several years, with key provisions like work requirements set to activate in 2027 and the relief fund allocated for rural hospitals expected to sustain operations for five years ([17:36]). The interplay between reduced federal funding and increased uninsured populations could create a domino effect, impacting not only Medicaid beneficiaries but the broader healthcare infrastructure ([17:54]).

Conclusion

The Big Beautiful Bill represents a significant pivot in U.S. healthcare policy, marking the most substantial reduction in federal healthcare spending and Medicaid in history. While intended to curb waste and ensure efficient allocation of resources, the bill's sweeping changes have ignited debates about healthcare accessibility, fiscal responsibility, and the future of the Medicaid program. As the healthcare landscape adapts to these reforms, the real-world implications for millions of Americans and healthcare providers will continue to unfold.

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Additional Reporting: Joseph Walker and Liz Eslie White.

**Listen to more episodes of The Journal on Spotify and find show merchandise here.

Transcript

[Senator Thom Tillis]

Mr. President, I come today to explain my vote yesterday for voting against the motion to proceed on this bill.

[Annie Minoff]

That's Republican Senator Thom Tillis speaking on the Senate floor last month. He was explaining to his colleagues why he'd voted no on advancing President Trump's signature legislation, his big, beautiful bill. The problem, Tillis said, was the bill's extensive cuts to Medicaid.

[Senator Thom Tillis]

So what do I tell 663,000 people in two years or three years when President Trump breaks his promise by pushing them off of Medicaid because the funding's not there?

[Annie Minoff]

Tillis wasn't alone in his concerns. The bill's Medicaid provisions gave several key Republican senators pause. But in the end, the president's bill passed by the narrowest of margins.

[Dominique Mossbergen]

The bill is passed.

[Annie Minoff]

On July 4th. Trump signed it into law. The final version slashes over $1 trillion in federal health care spending, mostly from Medicaid. Now patients and healthcare providers are puzzling through what those cuts could mean for them.

[Dominique Mossbergen]

So the one big beautiful bill, it represents the biggest cuts to federal healthcare spending and to Medicaid specifically in history.

[Annie Minoff]

That's our colleague Dominique Mossbergen.

[Dominique Mossbergen]

It's about 1 in 5 or about 70 million Americans are covered by Medicaid. So hospitals and doctors and patient advocacy groups have express stocks a lot of concerns about the far reaching impacts that this bill could have.

[Annie Minoff]

Welcome to the Journal, our show about money, business and power. I'm Annie Minoff. It's Wednesday, July 9th. Coming up on the show had Trump's big beautiful bill could reshape healthcare in the US.

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[Annie Minoff]

Just quick recap 101. What is Medicaid?

[Dominique Mossbergen]

What is Medicaid? Yeah. So Medicaid is the safety net health insurance program that is funded by both states and the federal government. It started in 1965 as a program for needy Americans, including low income children and their families, as well as elderly, blind and people with disabilities.

[Senator Thom Tillis]

The need for this action is plain. And it's so clear indeed that we marvel not simply at the passage of this bill, but what we marvel at is that it took so many years to pass it.

[Dominique Mossbergen]

And so Medicaid was seen as this, yeah, safety net program for the most vulnerable members of Society.

[Annie Minoff]

Since the 80s, every state has had a Medicaid program. Medicaid, by the way, is distinct from Medicare, which provides insurance for people over 65 regardless of their income. States Medicaid programs go by a variety of names. Connecticut has Husky Health. In Alaska, there's Denali Care. Washington state has Apple Health. And the programs work differently in each state.

[Dominique Mossbergen]

They say that if you know one state's Medicaid program, you understand one state's Medicaid program. Like they're all so different.

[Annie Minoff]

And good luck with the rest of the 49.

[Dominique Mossbergen]

Yeah.

[Annie Minoff]

Over the years, Medicaid coverage has expanded to cover more people, especially under Obama.

[Dominique Mossbergen]

And we have now just enshrined, as soon as I signed this bill, the core principle that everybody should have some.

[Annie Minoff]

Basic security when it comes to their health care.

[Dominique Mossbergen]

So in 2010, the Affordable Care act or Obamacare expanded Medicaid to adults who weren't disabled and didn't have children who had an income of up to to about 138% of the federal poverty level. So in 2024 that was about $20,000 annually for an individual.

[Annie Minoff]

Obama's expansion of Medicaid was controversial from the beginning and it was challenged in Court. A 2012 Supreme Court ruling made expanding Medicaid optional for each state, but over the years most have opted in.

[Dominique Mossbergen]

So 40 states and Washington D.C. have since expanded Medicaid. So that means in Those states and D.C. medicaid now covers this bigger group of people, including what are sometimes referred to as so called able bodied adults.

[Annie Minoff]

But 10 states have not opted in. And these states are red or red leaning. Why not?

[Dominique Mossbergen]

That's a great question. And I think a lot of Republicans for a long time have had issues with Obamacare. Right. For many years there was a movement to repeal it and replace it. And so I think there are many parts of Obama, Obamacare that Republicans didn't like. And I think this was one piece of it.

[Annie Minoff]

Some states also worried about their ability to fund the expansion. And philosophically, kind of, what is the criticism of this expansion of Medicaid? Why would some folks oppose it?

[Dominique Mossbergen]

There's sort of this, you know, libertarian idea held by some Republicans that by expanding Medicaid this much and allowing people who they may say should be out there working, they're not being encouraged to do that because there's this safety net program that is sort of taking away their self sufficiency, if you will. They say that there are these video game playing men who are living at home with their parents and there's no incentive for them to go out and work. And so, you know, why should they be on Medicaid and you know, shouldn't we be compelling them to get out there and get a job and, you know, make something of themselves?

[Annie Minoff]

Expanding Medicaid didn't just rankle many Republicans on a philosophical level. It was also expensive. Medicaid spending totaled $880 billion in the government's fiscal year in 2023. The federal government paid 69% of that, about 600 billion. And that's where some Republicans saw an opportunity to make changes. After his re election, President Trump was on a mission to make his 2017 tax cuts permanent. This would be costly.

[Dominique Mossbergen]

This was a lot of money that they needed to find somewhere and they needed to find sort of the budgetary savings to be able to pay for them.

[Annie Minoff]

They were looking for cuts.

[Dominique Mossbergen]

They were looking for cuts. Exactly. And so then they had to think about, well, where are those cuts going to come from? And so Medicaid sort of became the most obvious kind of target.

[Annie Minoff]

The White House said in a statement that the President's bill does not cut Medicaid and in fact strengthens the program for those who rely on pregnant women, children, seniors, people with disabilities and low income families. Trump has argued that the bill solely targets waste, fraud and abuse in the program.

[Senator Thom Tillis]

They're looking at fraud, waste and abuse. And nobody minds that if illegal immigrants are in the mix, if people that aren't supposed to be there, people that are non citizens are in the mix. Nobody minds that waste, fraud and abuse.

[Annie Minoff]

So we now have this bill, the big beautiful bill has passed and according to independent consultants you spoke to, the millions of Americans are potentially over the next decade going to lose health insurance as a result of this bill. Why is that?

[Dominique Mossbergen]

I think when it comes to Medicaid. One of the biggest reasons that folks think that coverage losses is going to happen is something called work requirements. So what that means is people aged between 19 through 64 will be required to work or volunteer or go to school for. For 80 hours per month in order to qualify for Medicaid. You know, there are certain exemptions, so they can be exempt if they're disabled, are pregnant, have children 13 or younger. And then there are a few other exemptions, too. But the projections say that, you know, because of these work requirements, a lot of people may fall off the rolls.

[Annie Minoff]

Most adults on Medicaid who are under 65 and not on disability are already working, according to the health policy nonprofit kff. But under the new law, they'll have to prove it. Medicaid enrollees will also have to prove their eligibility more often every six months instead of every year.

[Dominique Mossbergen]

The thinking is that a lot of people are going to fall off the rolls because they aren't able to keep up with the paperwork and the other sort of hurdles that the red tape will engender. So I think that's a concern, that people who are eligible, who are working, who meet the require, are going to lose coverage because they just can't keep up with the paperwork because they don't understand how to fulfill the requirements, that kind of thing.

[Annie Minoff]

Nearly 8.7 million fewer people will be covered by Medicaid over the next decade because of the bill's new rules. That's according to an estimate by the consulting firm Manet Health. But even if you're not one of the one in five Americans who's on Medicaid, the big beautiful bill may change your health care because of its impact on hospitals. That's next. Psst.

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[Annie Minoff]

As Congress was finalizing Trump's Big beautiful bill, the anxiety among many hospitals, especially rural hospitals, was growing. In Louisiana, a group of hospitals published an open letter expressing their concerns about the impact of the Medicaid cuts on their business. They said the cuts would be, quote, historic in their devastation, and they urged policymakers to, quote, recognize the essential role public funding plays in providing access to quality, life saving health care for all Americans. That public funding that the Louisiana hospitals were calling out, it's become crucial to many hospitals. Bottom lines, for hospitals, treating Medicaid patients isn't a big moneymaker.

[Dominique Mossbergen]

Hospitals say that, you know, they lose money for every dollar that they spend to care for a Medicaid patient. You know, they're losing money. And so there needs to be a way for them to make up that shortfall.

[Annie Minoff]

One of those ways has been additional federal funding routed through the states.

[Dominique Mossbergen]

And these supplemental payments are one way that they say that they're able to kind of bridge that gap. So I think, you know, a lot of hospitals say that, you know, it's a lifeline for them, especially hospitals that care for a large proportion of Medicaid patients.

[Annie Minoff]

But the big beautiful bill clamps down on that funding and even more so for states that expanded Medicaid coverage under.

[Dominique Mossbergen]

Obamacare, Medicaid payments to hospitals will be reduced by nearly 665 billion over the next decade.

[Annie Minoff]

Are there certain kind of types of hospitals that would face bigger impacts?

[Dominique Mossbergen]

Yeah, you know, certain rural hospitals, certain safety net hospitals, some urban hospitals too, like hospitals in large urban centers tend to have large Medicaid populations. Those are the ones that say, you know, these payments have been really critical because we see so many Medicaid patients and they say we lose so much money on those patients that we need a way to make up that gap. If not, we're going to really struggle.

[Annie Minoff]

Cuts to funding are one concern, but hospitals say the bill also creates another. More uninsured patients walking through their doors.

[Dominique Mossbergen]

Just because someone is uninsured doesn't mean that they stop having health issues. And so the hospitals say, well, these uninsured people are going to come to our ER and they're going to seek care, but they're not going to be able to pay for it. And so that means that our uncompensated health care costs are going to go up. People I've spoken to say that there's sort of a double whammy effect on hospitals.

[Annie Minoff]

So they're saying, you know, we're gonna struggle if we don't get this, this kind of extra money for these Medicaid patients. I mean, struggle. How much are we talking about? Hospitals could close, could cut services?

[Dominique Mossbergen]

Yeah, I think hospitals say that, you know, the impacts could be quite severe. So, like, for example, labor and delivery units tend to be less profitable. And so hospitals say, well, you know, that's one area that have to pull Back on. It is a little early to say just how big of an impact these changes will have on hospitals, but they're certainly ringing the alarm bell and saying that it's, that it's going to be bad.

[Annie Minoff]

At the end of the negotiations around the bill, the Senate added a $50 billion relief fund for rural hospitals, but it's unclear whether that money will be enough to cover hospital shortfalls. Our lady of the Angels Hospital in Louisiana has said it may have to consider closing its doors. And the University of Kentucky says it might have to pause construction on a new building dedicated to cancer treatment. What's the administration said about that, about the impact of this bill on hospitals in general?

[Dominique Mossbergen]

I think the Trump administration has said that the media coverage of these cuts and what the critics of this bill, you know, what they're saying is overblown. And really this, again, this bill is really targeting waste, fraud and abuse and is really making sure that the most vulnerable Americans are getting the care that they need. But, you know, reining in this sort of unchecked expansion of this program.

[Annie Minoff]

We talked about the expansion of Medicaid under Obamacare. Does this bill kind of fundamentally change the legacy of Obamacare?

[Dominique Mossbergen]

You know, I think one thing I've heard is that some people are seeing this bill as a sort of partial repeal of Obamacare. You know, Republicans weren't ever able to fully replace and repeal Obamacare despite their many efforts to do so. But this is sort of a partial repeal of it.

[Annie Minoff]

It's a moment of rolling back.

[Dominique Mossbergen]

Yeah, it's rolling back what they have seen as sort of this unchecked expansion. On the one hand, it's like the ACA is still intact and it's still very much woven into the fabric of American healthcare. And it's hard to imagine it going away completely. But certainly, you know, there is a rolling back that we're seeing here.

[Annie Minoff]

The full impact of the big beautiful bill's Medicaid cuts may take years to come into view. Many of the changes phase in slowly. Work requirements don't kick in until 2027. And that $50 billion fund to protect rural hospitals will last for five years.

[Dominique Mossbergen]

Medicaid touches many Americans lives. You know, one in five Americans are on Medicaid and chances are, you know, someone who is on Medicaid. And so these changes could have impacts on those people, but also on the program as a whole. You know, again, many hospitals say that this is going to have a real domino effect and could have impacts on the healthcare industry for years to come.

[Annie Minoff]

That's all for today. Wednesday, July 9. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode from Joseph Walker and Liz Eslie White. Thanks for listening. See you tomorrow.