The One Big Beautiful Bill Act: An Executive Perspective on the U.S. Healthcare Landscape

President Trump’s signing of the One Big Beautiful Bill Act on July 4, 2025, marks the most significant healthcare legislation since the Affordable Care Act (ACA). This bill, which enacts changes to Medicaid and impacts major ACA elements, is projected to reduce federal healthcare spending by approximately $1 trillion through fiscal year 2034. It achieves this by managing eligibility, expanding enrollment constraints, and modifying how states receive funding for Medicaid. The legislation represents a sweeping shift in federal healthcare policy with potential ripple effects across financing, access, and delivery models.  

The most significant shift this bill presents is a reduced federal role in safety-net care, placing more responsibility on states and private entities. While stakeholders like insurers and providers are expected to develop new, more affordable preventive care models, it remains unclear what incentives beyond solvency will drive such innovation or collaboration. A longer-term concern is the expansion of the federal deficit to $3.4 trillion, largely due to decreased tax revenue, which could result in slower overall economic growth.​​​

Beyond its direct impact on healthcare, this bill includes sweeping changes to education, taxation, and transportation, among other sectors. While we can anticipate some effects, other unintended consequences are likely to become apparent in the near future. Now is the time for health systems to think proactively about long-term solutions. 

Medicaid Cuts: Financial and Access Implications 

The bill includes substantial cuts to Medicaid funding, which could have a significant financial fallout for hospitals, particularly safety-net and rural facilities already operating on thin margins. While rural hospitals received a $50 billion funding provision through the Rural Health Transformation Program (RHTP), this five-year fund, starting in 2026, will not cover the projected $155 billion shortfall from other provisions. Additionally, the bill did not extend Disproportionate Share Hospital Payments, which expired on September 30, 2025. 

Patients will also face higher premium costs in the ACA marketplace as the advanced premium tax credit (APTC) subsidies expire. Taken together, these changes may lead to a wider underinsured population, adding financial pressure to vulnerable care systems and creating more uncompensated care.

A key provision of the bill introduces tighter Medicaid eligibility rules and community engagement requirements, also known as work requirements. These changes, to be tracked by states without additional federal funding, are expected to reduce Medicaid enrollment. This may lead to a greater underinsured and uninsured population, shifting the financial burden of care to providers. Under the Emergency Medical Treatment and Labor Act (EMTALA), emergency care providers cannot turn away patients with emergency medical conditions, regardless of their ability to pay. This creates a dangerous incentive for patients to defer primary care and seek more expensive, uncoordinated care in emergency departments, turning them into a de facto safety net. This could overwhelm emergency departments, leading to longer wait times, burnout, and staff leaving the profession. 

Social Determinants of Health (SDOH) and Mental Well-Being

The bill also significantly reduces federal SNAP spending by over $187 billion over 10 years, placing greater financial and administrative burdens on states. This is likely to increase food insecurity and poverty for vulnerable groups. These non-medical factors that influence health outcomes could further manifest across all six dimensions of well-being: emotional, physical, social, intellectual, meaning and purpose, and financial. 

Food insecurity is associated with nutritional deficiencies, increased risk of chronic and infectious diseases, and mental health issues, all of which lead to higher healthcare costs and increased use of emergency rooms. The belief that health systems can somehow invest in new technologies and care models to respond to these challenges seems to overlook the fact that these systems are already facing their own supply chain, medication, and wage pressures. 

Clinician and Patient Mental Health Crisis 

The healthcare sector was struggling with clinician and healthcare worker mental health well before the COVID-19 pandemic, which further exacerbated the crisis. This bill and its broad impact will affect all sectors in and outside of healthcare, with safety-net providers being most at risk.

To support the workforce, a foundation of well-being needs to become a pillar of every healthcare organization’s operational model. This includes addressing burnout and moral injury, smoothing workloads, and implementing creative scheduling. There is also an opportunity to leverage emerging technologies like artificial intelligence to decrease the cognitive load on the workforce. Additionally, organizations can help employees understand and leverage new employee benefits in the bill, such as those related to student loan repayment, health savings accounts, and childcare credits. 

Ultimately, you can’t simply remove $1 trillion from a sector and not expect destabilization. The structures that got us here will not help us survive. A critical evaluation of models like Fee-for-Service in view of this legislation is necessary. There needs to be disciplined and coordinated collaboration across states, payers, and providers. 

Strategic Response and Long-Term Outlook

In light of these challenges, healthcare leaders should initiate strategic conversations to mitigate the negative impacts on financial stability and community health. This includes enhancing compliance, optimizing financial operations, and modeling the financial impact based on payer mix and community needs. 

Supporting the workforce by addressing burnout and focusing on retention is also crucial. As patient access changes and shifts toward emergency care, leaders must focus on maximizing and cost-effectively managing this access. Finally, engaging in strategic advocacy, collaboration, and new partnerships with an eye toward innovative solutions is key. 

Socrates wisely said, "The secret of change is to focus all of your energy, not on fighting the old, but on building the new." This bill puts the future of the vulnerable infrastructure for care at risk. How we define ourselves as a country and society post-OBBBA is more important than some of the minutia in this bill.