The Journal. - The Healthcare Costs of Trump’s Big Beautiful Bill

Episode Date: July 9, 2025

President Trump’s megabill cuts over $1 trillion in healthcare spending over the next decade, mainly from Medicaid. Experts project nearly 8.7 million fewer people covered by Medicaid, and hospitals face reduced payments and higher costs. WSJ’s Dominique Mosbergen reports on the bill’s historic cuts. Annie Minoff hosts.  Further Listening: - How Trump’s Megabill Squeaked Through the Senate  - Can the GOP Unite Around Trump's 'Big, Beautiful Bill'? Sign up for WSJ’s free What’s News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Mr. President, I come today to explain my vote yesterday for voting against the motion to proceed on this bill. That's Republican Senator Tom 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. 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." 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. The bill is passed. USA! USA! USA! USA! The bill is passed. — 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 health care providers are puzzling through what those cuts could mean for them. So the one big beautiful bill, it represents the biggest cuts to federal health care spending and to Medicaid specifically in history. That's our colleague Dominique Mossbergen. It's about one in five or about 70 million Americans are covered by Medicaid. So hospitals and doctors and patient advocacy groups have expressed a lot of concerns about the far-reaching impacts that this bill could have. Welcome to The Journal, our show about money, business and power.

I'm Annie Minow. It's Wednesday, July 9th. Coming up on the show, how Trump's big, beautiful bill could reshape healthcare in the US. What's better than a well-marbled ribeye sizzling on the barbecue? A well-marbled ribeye sizzling on the barbecue that was carefully selected by an Instacart shopper and delivered to your door. A well-marbled ribeye you ordered without even leaving the kiddie pool.

Whatever groceries your summer calls for, Instacart has you covered. Download the Instacart app and enjoy $0 delivery fees on your first three orders. Service fees, exclusions, and terms apply. Instacart, groceries that over-deliver. Just quick recap 101. What is Medicaid? 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. 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. And so Medicaid was seen as this safety net program for the most vulnerable members of society.

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. They say that if you know one state's Medicaid program,

you understand one state's Medicaid program, like they're all so different. And good luck with the rest of the 49. Yeah. Over the years, Medicaid coverage has expanded to cover more people, especially under Obama. We have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their health care. 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 about 138% of the federal poverty level.

So in 2024, that was about $20,000 annually for an individual. 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. So 40 states and Washington, DC, have since expanded Medicaid. So that means in those states and DC,

Medicaid now covers this bigger group of people, including what are sometimes referred to as so-called able-bodied adults. But 10 states have not opted in, and these states are red or red-leaning. Why not? That's a great question, and I think a lot of Republicans for a long time have had issues with Obamacare. For many years, there was a movement to repeal it and replace it.

And so I think there were many parts of Obamacare that Republicans didn't like, and I think this was one piece of it. 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? There's sort of this 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 the 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? Expanding Medicaid didn't just wrinkle 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 reelection, President Trump was on a mission to make his 2017 tax cuts permanent.

This would be costly. 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. They were looking for cuts. 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. 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 it — 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. 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 fraud and abuse. So we now have this bill, the big, beautiful bill has passed. And according to independent consultants you spoke to, millions of Americans are potentially over the next decade going to lose health insurance as a result of this bill. Why is that? 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 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. But the projections say that, you know, because of these work requirements, a lot of people may fall off the rolls.

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. The thinking is that a lot of people are going to fall off the roles

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 requirements, you know, are going to lose coverage because they just can't, you know, can't keep up with the paperwork because they don't understand how to, you know, fulfill the requirements, that kind of thing.

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, Manit 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 healthcare because of its impact on hospitals.

That's next. That's next. This episode is brought to you by Adidas. When the frustration grows and the doubts start to creep in, we all need someone who has our back. To tell us we'll be okay. To remind us of our ability. To believe. Because their belief in us transfers to self-belief and reminds us of all that we're capable of.

We all need someone to make us believe. Hashtag, you got this. 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. Hospitals say that, you know, they lose money for every dollar that they spend to care for a Medicaid patient. They're losing money.

And so there needs to be a way for them to make up that shortfall. One of those ways has been additional federal funding routed through the states. 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 But the big beautiful bill clamps down on that funding and even more so for states that expanded Medicaid coverage under Obamacare Medicaid payments to hospitals will be reduced by nearly $665 billion over the next decade. Are there certain types of hospitals that would face bigger impacts? 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 gonna really struggle. Cuts to funding are one concern, but hospitals say the bill also creates another problem, more uninsured patients walking through their doors. 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. So they're saying, you know, we're going to struggle if we don't get this kind of extra money for these Medicaid patients.

I mean, struggle how much? Are we talking about hospitals could close, could cut services? 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 we might 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 going to be bad. 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, 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. We talked about the expansion of Medicaid under Obamacare. Does this bill fundamentally change the legacy of Obamacare? I think one thing I've heard is that some people are seeing this bill as a sort of partial

repeal of Obamacare. 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. It's a moment of rolling back. 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. 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.

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. That's all for today, Wednesday, July 9th. The Journal is a co-production of Spotify and The Wall Street Journal.

Additional reporting in this episode from Joseph Walker and Liz Esley White. Thanks for listening. See you tomorrow.