Study Reveals Up to 9 Million Americans at Risk of Losing Health Insurance Amid Budget Uncertainty

Study Reveals Up to 9 Million Americans at Risk of Losing Health Insurance Amid Budget Uncertainty

The White House has recently released a significant study forecasting that between 8.2 and 9.2 million additional Americans could find themselves without health insurance in the event of a recession—a scenario tied to the potential failure of President Donald Trump’s budget proposal.

This alarming finding originates from a memo produced by the White House Council of Economic Advisers, entitled “Health Insurance Opportunity Cost if 2025 Proposed Budget Reconciliation Bill Does Not Pass.” The implications of this memo could reshape discussions surrounding healthcare accessibility in the United States.

Understanding the Potential Impact

The memo hinges on the assumption that, in 2025, approximately 27 million Americans will lack health insurance. Should the Trump budget bill fail, this number might escalate to roughly 36 million uninsured individuals. This scenario brings the figure uncomfortably close to the nearly 50 million uninsured Americans recorded before the Affordable Care Act, or ACA, was implemented in 2010.

The findings reflect a disturbing trend that could challenge efforts made over the past decade to reduce the number of uninsured citizens.

Assumptions and Economic Projections

The memo clarifies that its projections are based on certain assumptions. It assumes that states which expanded Medicaid with more significant eligibility requirements will reduce services to meet balanced budget mandates. This shift would likely occur as states seek to provide enhanced unemployment support during a serious recession.

Moreover, the analysis indicates that no policy countermeasures will be implemented, a stance the White House describes as an unlikely but plausible worst-case scenario.

The Economic Landscape

Looking ahead, the White House warns that the expiration of the 2017 Trump tax cuts in 2026, alongside other economic pressures, could drive the nation into a moderate to severe recession. The economic advisers within the White House explain that a major recession would bring about various adverse effects. These include decreased consumer spending due to higher individual taxes and diminished investment from small businesses because of elevated pass-through taxes. Additionally, global confidence in the U.S. economy may falter, alongside concerns regarding competitiveness, contributing to a tighter credit environment.

Job Loss and Health Coverage

According to the advisers’ most concerning estimates, failing to extend the Trump tax cuts could lead to a U.S. GDP contraction of roughly 4% over two years, paralleling the economic impact witnessed during the 2008 recession. Unemployment could surge by four percentage points, translating into an estimated loss of around 6.5 million jobs—60% of which include employer-sponsored insurance. As a consequence, the White House projects that about 3.9 million individuals would lose their health coverage and become uninsured.

This situation would not only affect the newly unemployed but also those who already lack employer-sponsored insurance. Many of these individuals would find themselves unable to afford private insurance premiums, leading to a substantial drop in coverage from approximately 22 million enrolled in 2026 down to an estimated 3.3 million.

The Challenge of Health Insurance Enrollment

The potential failure of the budget bill may have broader implications for Medicaid enrollment and ACA subsidized plans. Without the passage of the proposed legislation, enrollment in these programs could face significant barriers. The memo notes that there could be a 10% enrollment friction rate, which may result in anywhere from 500,000 to one million individuals losing their coverage or failing to secure health insurance in the first place.

Vulnerable Populations at Greater Risk

The expiration of the tax cuts would disproportionately impact various segments of the population. Non-citizens, gig economy workers, and early retirees could experience increased difficulty in maintaining affordable health coverage due to economic downturns. The advisers assert that these vulnerable groups could collectively face insurance losses ranging from 500,000 to one million individuals.

Political Dynamics in Congress

House Speaker Mike Johnson, a Republican from Louisiana, is actively working to advance the “One Big Beautiful Act” through the House in a race against a self-imposed Memorial Day deadline. Johnson faces an uphill battle, as divisions within the Republican Party have emerged, complicating efforts to get the bill passed. Currently, Republicans hold a slim majority in the House, and unity is crucial for the success of this legislative effort.

The comprehensive legislation spans 1,116 pages and incorporates over $5 trillion in tax cuts, which are offset partially by cuts in other spending and reforms to the tax code. The bill aims to make permanent the tax cuts implemented during Trump’s first term, fulfilling many campaign promises.

Campaign Promises and New Initiatives

Beyond tax cuts, the proposed budget bill encompasses various initiatives designed to alleviate financial burdens for everyday Americans. Among these measures are temporary eliminations of taxes on overtime and tips for many workers, as well as the introduction of a $10,000 tax break on interest from auto loans for American-made vehicles. Additionally, the proposal introduces a new tax-free “MAGA account,” which aims to contribute $1,000 for each child born during Trump’s potential second term.

Reporting by The Associated Press contributed to this article.