Why the Big Beautiful Bill Will Send Health Insurance Costs Higher

At this point, Americans are still trying to wrap their heads around the Big Beautiful Bill and its many consequences. And one area that the bill targeted was healthcare.

In the wake of the bill, Americans are now looking at steep Medicaid cuts that could have far-reaching consequences. However, one of those consequences may not be so obvious.

Many Americans could become uninsured

The Big Beautiful Bill could change the health insurance landscape in the coming years — and not necessarily in a good way. One thing that the bill did was allow the enhanced subsidies for Americans who get health insurance through the Affordable Care Act (ACA) to expire.

It was those subsidies that made that coverage affordable — or reasonably affordable — for many low- and middle-income Americans. Now, the Congressional Budget Office estimates that more than 4 million Americans could become uninsured over the next 10 years due to the aforementioned enhanced tax credits expiring coupled with other changes.

Health insurance could become more expensive on a whole

The Big Beautiful Bill may not just cause many Americans to lose their health insurance. It could also drive costs up for Americans in a significant way.

It’s estimated that about 92% of current ACA plan enrollees receive premium tax credits, including those enhanced under recent legislation. With those enhanced tax credits for ACA plans going away, it’s likely that in the near term, we’ll see many younger people leave the health insurance market. But it’s these same enrollees who tend to be healthier, costing insurers less money.

As these healthier people make their exit, it could create a situation where more health insurance enrollees are, on average, older and therefore prone to more health issues. It’s people in this category who are typically a lot more expensive to insure.

Health insurers will need a way to offset the higher costs of insuring an older and, by proxy, sicker population. And the easiest way for them to cover those higher costs is to raise the cost of health insurance for everyone looking for an ACA plan.

The Kaiser Family Foundation estimates that in the wake of this change, premiums for ACA plans will increase by an average of 75% in 2026. And in at least 12 U.S. states, premiums are expected to more than double.

All told, the Big Beautiful Bill could have a severe impact on Americans’ health insurance. As it is, in 2023, an estimated 26 million Americans did not have health insurance coverage. In the wake of the aforementioned changes, that number could increase significantly.

And while it’s certainly easy to look at that as someone else’s problem, the reality is that when uninsured patients need emergency care and can’t pay for it, hospitals have to absorb the cost. To compensate, they often have to raise rates, hurting everyone in need of health coverage and care. So all told, the Big Beautiful Bill could make healthcare a lot more expensive for Americans of all ages and income levels.

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