How Trump’s tax bill could affect the healthcare industry

The tax bill recently signed by President Trump represents the largest cut to federal healthcare spending ever, according to several experts, and could leave as many as 12 million Americans without insurance by 2034.

That’s according to the Congressional Budget Office, but some think tanks and analysts suggest that number could be lower. In June, Jefferies analysts estimated the impact would result in between 6 million and 7 million uninsured.

The bill does not extend subsidies for the Affordable Care Act market health plans introduced during the COVID-19 pandemic, which will raise premiums for some individuals, and removes eligibility for legal immigrants. The bill also takes away bridge coverage from job losses or other life-altering events, which could further increase the cost and burden on some individuals.

In addition, the bill would cut a significant amount of funding — some estimates show up to $1 trillion — from Medicaid funding through 2034. That includes state taxes that are used to help increase the amount of Medicaid dollars health providers receive, often described as underfunding since it doesn’t reimburse hospital costs dollar for dollar.

Read more: What is a healthcare FSA? A way to save on medical costs.

In 2024, the US spent $1.9 trillion on healthcare, or about 27% of the total federal budget. That includes Medicare and Medicaid, with the latter accounting for 8% of that total, according to KFF.

On Monday, Jefferies analysts said that while the bill is likely to have the most impact on healthcare providers such as doctors and hospitals, the delayed timeline for implementation provides enough of a cushion.

“Near-term, we remain positive on the fundamental outlook for [healthcare] service providers given our belief that utilization trends remain strong, translating to continued volume/revenue growth. That said, given the phased or later implementation of many of these policies, we do not expect an impact on fundamentals until 2026,” the analysts wrote.

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.

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