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The media is clamoring over the Congressional Budget Office’s estimate that 16 million people will lose health insurance by 2034 because of the Trump administration’s policies—10.9 million due to the One Big Beautiful Bill Act alone. Most of the news coverage misses three important details. While it’s true that many people will lose insurance, that doesn’t mean a significant loss of healthcare.
First, most of those who will lose coverage are almost certain to be healthy and not in need of medical care. The bulk of the loss from One Big Beautiful Bill (7.8 million) will be a reduction in Medicaid enrollment. Nearly five million of these are able-bodied people without dependents, who the CBO predicts will balk at the requirement to work 20 hours a week (or go to school or engage in community service). The remaining losses are mainly due to paperwork—more-frequent eligibility verification, the need for proof of citizenship or immigration documents, and changes in processing applications and renewals.
Second, if people who lose coverage later get seriously sick, they can easily re-enroll and get Medicaid to pay their bills retroactively. There’s a three-month look-back period for coverage. Beginning in 2027, retrospective payment will be limited to one month for Medicaid expansion enrollees and two months for traditional enrollees. This should be more than enough time for a patient to get the coverage he needs. If a hospital or nursing home can’t manage to enroll a patient in 30 days, it needs new management.
It’s a similar story with the other largest portion of insurance loss. The CBO estimates that 7.3 million people on the ObamaCare exchanges will soon be without coverage for two reasons: a Biden-era expansion of enhanced tax credits will expire at the end of the year, and the One Big Beautiful Bill’s increased administrative barriers to enrollment. Those who end up without insurance because of this will almost all be healthy, because they are the most likely to give up in the face of more paperwork. One of the reasons health insurers are announcing an 18% increase in premiums in next year’s exchanges is because they expect healthy people to leave, making the remaining pool sicker and more costly.
If someone who drops out of ObamaCare gets sick, it isn’t difficult to get back on. Theoretically, he’s supposed to wait until the next open enrollment period (Nov. 1 through Jan. 15). But he can qualify for immediate enrollment if there is a “qualifying event” such as getting married, having a baby or moving to a new ZIP Code. Native Americans and Alaskan Natives have access to continuous open enrollment.
Third, having health insurance isn’t the same as having healthcare. While ObamaCare (including the Medicaid expansion) has helped cut the number of uninsured people in the U.S. nearly in half, all that spending has resulted in very little benefit—including for enrollees.
Medicaid enrollees actually place a low value on enrollment. Low-income adults value their Medicaid coverage at about 20 to 50 cents on the dollar of what their plans actually cost the government.
Medicaid also doesn’t seem to make much difference to enrollees’ health. The most rigorous study of the matter was the Oregon Health Insurance Experiment—a one-of-a-kind randomized controlled trial. Researchers selected Medicaid enrollees by lottery. After two years, researchers compared the medical conditions of those on Medicaid and those not on it. Those who had enrolled had less financial stress and were less likely to be depressed, but there was no significant improvement in their physical health.
As one of the Oregon investigators, MIT economist Amy Finkelstein, explained in a recent interview, people without health insurance still get about 80% of the healthcare that Medicaid enrollees do. When they’re confronted with high medical bills, they usually pay only a small portion of them. Sometimes this means taking on debt, but as Ms. Finkelstein said elsewhere, “the nominally uninsured have a fair amount of implicit insurance.” This can include help from nonprofit hospitals or government-funded health clinics.
This makes Medicaid of little marginal value. Among the lottery winners who were offered enrollment in the Oregon study, more than half turned it down.
ObamaCare likewise has done little to improve healthcare access. A study in the American Journal of Public Health found that after the introduction of ObamaCare, there was a small increase in the number of low-income patients who had at least one doctor’s office visit. But that was offset by “small, nonsignificant reductions” among the rest of the population. There was no change for the population as a whole.
The nation has spent almost $200 billion a year on ObamaCare subsidies. If the One Big Beautiful Bill can reduce some of this waste, it will cause little harm while saving taxpayers a lot of money.
Read the original post on the Wall Street Journal
This article makes some interesting points about health insurance and Medicaid, but Im not convinced it fully captures the complexity of the issue. The assumption that those losing coverage are healthy seems unlikely in practice.