The One Big Beautiful Bill Act (OBBBA): Implications for Medicare Recipients, ACA Members, and Community Resources

Author: Alexander Efroymson, Licensed Life and Health Insurance Agent

Date: July 13, 2025

Location: Fort Myers, Florida, U.S.

Abstract

The "One Big Beautiful Bill Act" (OBBBA) introduces sweeping reforms to tax and healthcare policy in the U.S. and came into law in July 2025. This paper considers the effects on Medicare recipients, ACA marketplace members, and non-profit organizations. The factors include congressional budget office (CBO) data, congressional research service (CRS) research, as well as similar essays authored by nonprofit service groups across the United States. The report shows that America will have more uninsured people, less Medicaid and SNAP subsidy access and financing challenges for supporting systems at the grassroots level. Although there is a universal charitable deduction in the bill for people with high incomes and corporations to donate to causes of their choice, it also limits their current practice. The findings have implications for communities that may be under greater pressure than ever to help people in need and will see access open up to fewer vulnerable populations through health care schemes run at the local level.

Introduction

This past year has seen a surge of inquiries to me in my capacity as a licensed life and health insurance agent regarding the future status of clients’ health care benefits from clients and the general public alike. Many people are asking questions about their own positions, such as “What is happening with my Medicare?” or “Will I still be eligible for ACA subsidies next year?” It's not just a question of policy; it concerns the very lives and peace of mind that people have to look forward to.

In response to this apparent anxiety and uncertainty that we see around us, let me explain here the implications of Mr. Speaker's One Big Beautiful Bill Act (H.R. 1, 119th Congress), which was signed into law on July 4, 2025. This act constitutes a major reform of tax policy, Medicaid, Medicare, and the Affordable Care Act (ACA). My hope is that by providing a clear and impartial view, people will understand what the bill means for those insured on Medicare, ACA marketplace people, and such communities which support them — and therefore can have some idea of how best to respond to these changes.

Policy Background

In early 2025, the One Big Beautiful Bill Act (OBBBA) was put forward as a wide-ranging reconciliation initiative by the majority in Congress. Aimed at combating rising federal

deficits as well as perceived inefficiencies in our healthcare and welfare systems, this bill rolled tax reform, Medicaid restructuring, and spending cuts into one package. Sponsors portrayed it as an essential step toward re-establishing fiscal discipline, encouraging work incentives, and ending long-term government dependency. The bill squeezed through both houses of Congress by very small margins and was signed into law by President Donald Trump on July 4, 2025, following a tie-breaking vote in the Senate by Vice President J.D. Vance. (GovFacts, 2025; U.S. Congress, 2025)

Its advocates stressed the potential it had to streamline federal programs and stamp out fraud, while opponents warned of its likely impact on healthcare access, especially for low-income individuals and families. Scope-wise and scale-wise the bill rates as one of the major federal policy shifts since the Affordable Care Act, having implications for Medicaid, Medicare, the ACA marketplaces, and nonprofit providers of service throughout the country (Baumrucker et al., 2025; Congressional Budget Office, 2025).

Implementation Schedule: Phased Implementation

• July 2025: Signing of the bill. Immediate changes include retroactive tax adjustments for tipped and overtime wages (U.S. Congress, 2025).

  
  

• October 2025: States begin a six-month reapplication period for Medicaid eligibility. Work requirement pilot programs begin in five states (Committee for a Responsible Federal Budget, 2025).

  
  

• January 2026: Mandatory Medicaid work requirements enforced nationwide and income verification for ACA subsidies begin (Committee for a Responsible Federal Budget, 2025).

  
  

• July 2026: Medicaid financing (that is, provider taxes) abolished triggering state budget adjustments (Committee for a Responsible Federal Budget, 2025).

  
  

• 2027-2034: Gradual implementation of Medicare administrative changes and forecast coverage losses by the CBO (Baumrucker et al., 2025).

This timeline suggests that some tax-related benefits are realized at once, while those of the most significant healthcare impacts will unfold over the next 6-18 months, with long-term effects continuing through the next decade.

Medicare Provisions and Impacts

Although the bill primarily targets Medicaid and ACA programs, Medicare is indirectly affected. The OBBBA adds $8.6 billion to Medicare outlays over ten years, primarily in the form of administrative changes and delaying cost-saving measures (Baumrucker et al., 2025). The bill also puts a hold on any enhancements to the Medicare Saving Program, which is supposed to assist low-income seniors with premiums and out-of-pocket costs. This may limit the ability of financially vulnerable Medicare beneficiaries to receive care (Baumrucker et al., 2025).

Medicaid Overhaul and ACA Marketplace Effects

The OBBBA's biggest changes affect Medicaid and ACA coverage levels:

Work Requirements

Adults under 65 who got Medicaid through ACA expansion must work, learn or volunteer for at least 80 hours per month in order to keep their coverage. The CBO figures this will cause 4.8 million people to lose Medicaid by 2034 (GovFacts, 2025).

Eligibility Verification

States must verify eligibility every six months, and this will raise the costs of administration and thus probably cause some coverage losses due to bureaucratic errors (Baumrucker et al., 2025).

State Financing Restrictions

States may no longer use taxes levied on providers to fund Medicaid, resulting in an estimated $340 billion cut (GovFacts, 2025). Additionally, the ACA marketplaces are hit. The bill tightens income verification requirements and reduces subsidies, with the CBO estimating that this will leave 1.3 million more people without insurance in 2034 (Baumrucker et al., 2025).

Under New Tax Law Nonprofits Face Funding Challenges

In addition to the constraints on their finances, the bill also makes massive cuts to Medicaid and SNAP that remove millions of people from access to healthcare and food assistance while laying even greater pressure at non-profits' door to fill these gaps. As it was, advocacy from nearly 2,300 non-profit groups eliminated many dreadful provisions in the early editions – such as powers for the Tax Office to revoke the tax-exempt status of non-profit organizations, or even taxes on their benefits. The National Council of Nonprofits (NCN) will continue to track the implementation of the bill and seek policies that favor the nonprofit sector’s ability to serve communities (National Council of Nonprofits, 2025).

Projected Coverage Losses and Costs

The CBO estimates that the OBBBA - the One Big Beautiful Bill Act - will add 9.1 million to America’s ranks of the uninsured by 2034, with 7.8 million of them due to cutbacks in Medicaid (Baumrucker et al., 2025). Although it claims to reduce the deficit, the bill is expected to increase it by $3.3 trillion over 10 years due to $4.5 trillion in tax cuts offset by only $1.2 trillion of spending cuts. (GovFacts, 2025).

Projected Coverage Losses by Income Level

According to CBO (2025) estimates, the One Big Beautiful Bill Act (OBBBA) will add around 9.1 million to America’s uninsured population by 2034. However, these coverage losses do not affect all income groups in equal proportion. The poor are mainly hit: about 7 million who will find themselves without insurance earn less than 138% of the Federal Poverty

Line (FPL), mainly because of Medicaid design changes and requirements for work (Baumrucker et al., 2025; GovFacts, 2025). Another 2 million are in the 138%–400% FPL group, mostly from subsidy reductions and tighter screens on income. A smaller group, about 400,000 tallies previously uninsured who now earn over 400% of the FPL, will also lose their coverage owing to modifications in ACA marketplace dynamics. This distribution underscores the disproportionate disadvantaging of low-and middle-income groups by the OBBBA, raising issues of access to care and financial insecurity.

Positive Aspects Of The OBBBA

Despite its widespread criticism, the OBBBA has some notably positive provisions. They include, for example, introducing a universal charitable deduction: anyone who gives to charity under the new law may claim $1,000 (for singles) or $2,000 (for marrieds) as a deduction even if they do not itemize. They claim that this will help expand the foundation of charitable work over the next ten years, and may also enhance the capacity of non-profit organizations to aid vulnerable groups (National Council of Nonprofits, 2025). The bill also offers immediate tax relief by making adjustments to tipped and overtime wages retroactive, and thus will bring short-term fiscal benefits to many low- and middle-income workers (GovFacts, 2025). Proponents of the bill also claim that it encourages self-sufficiency and responsibility. By introducing work requirements for Medicaid and tightening income verification standards for ACA subsidies, the Act aims to decrease dependence on government programs and increase workforce participation (GovFacts, 2025).

In addition, its phased introduction will provide states and agencies with time to adapt. This may help reduce the amount and effect of any administrative upset caused by the changeover; it means too that while longer-term fiscal implications are open to argument, advocates regard these reforms as steps back towards budgetary discipline and efficiency in spending by Washington (Congressional Budget Office, 2025).

Potential Unintended Consequences

While the One Big Beautiful Bill Act (OBBBA) pursues fiscal responsibility and seeks to reduce dependence on government programs, it may also produce unintended consequences that disadvantage non-self-supporting groups. One major concern is the administrative burden placed on state agencies tasked with implementing new eligibility verification systems and enforcing work requirements. Significant investment in staffing, training, and technology is needed by these changes, which may not be economically feasible for all states--especially those with limited administrative capacity (Congressional Budget Office, 2025).

A further potential problem is the threat of coverage disruptions due to bureaucratic errors. Frequent eligibility redeterminations, now required every six months under the new law, can lead to eligible individuals losing coverage merely because they didn't get the forms in on time or because there was a glitch in the computer. This phenomenon, known as “churn,” ends up raising healthcare costs and lowering continuity of patient care. In addition, putting work requirements in place where few local job opportunities exist, and no transportation links will make the poor even poorer and widen still more the emerging health divide. (Congressional Budget Office, 2025)

Discussion

Regarding their bill: It brings back prudent money management and makes paying for work. But whether a similar policy has worked is too in the air, as shown by the experience of the Arkansas Medicaid work requirements in 2018 (GovFacts, 2025) A criticism of the bill is that it harms disproportionately poor people, seniors, and disabled who rely heavily on Medicaid and ACA subsidies. Such facilities are overstrained by this new legislation.

Conclusion

With The One Big Beautiful Bill, America envisions a radical new health policy. But it envisages a great pruning, and faces various disparities in opposition's growth including heavy losses of coverage, added financial pressure on Medicare beneficiaries ACA members, as well as increasing homelessness, etcetera around the search for community support systems. Both sides must weigh up seriously these likely consequences as the law is launched.

References

Baumrucker, E. P., Fernandez, B., Forsberg, V. C., Hahn, J., Houston, M. B., Kolker, A. F., Mitchell, A., Morgan, P. C., Morton, W. R., Saraswathula, V., Villagrana, M. A., & Wreschnig, L. A. (2025, June 13). Health coverage provisions in One Big Beautiful Bill Act (H.R. 1) (CRS Report No. R48569). Congressional Research Service. https://www.congress.gov/crs-product/R48569

Congressional Budget Office. (2025, July 1). Information concerning the budgetary effects of H.R. 1, as passed by the Senate on July 1, 2025 [PDF]. https://www.cbo.gov/publication/61537

Committee for a Responsible Federal Budget. (2025, May 29). Five ways the Senate can improve OBBBA. https://www.crfb.org/blogs/five-ways-senate-can-improve-obbba

GovFacts. (2025). How the “One Big, Beautiful Bill” targets Medicare and Medicaid. https://govfacts.org/explainer/how-the-one-big-beautiful-bill-targets-medicare-and-medicaid/

National Council of Nonprofits. (2025, July 3). Congress passes major tax package; nonprofits directly impacted. https://www.councilofnonprofits.org/articles/congress-passes-major-tax-package-nonprofits-directly-impacted

U.S. Congress. (2025). H.R. 1 – One Big Beautiful Bill Act, 119th Congress (2025–2026). Congress.gov. https://www.congress.gov/bill/119th-congress/house-bill/1/text/enr