While the details of how the One Big Beautiful Bill Act will impact the healthcare industry remain uncertain, experts speaking on a panel with CM&F Group’s parent company, HUB International, don’t mince words when inferring how massive its effects will be.
“The impact is going to be profound, and the ripples are going to go not just across the healthcare industry, but for anyone who may work with and within the industry,” says Peter Reilly, American Healthcare Practice Leader at HUB.
Click here to watch the panel.
How the One Big Beautiful Bill Act Will Impact the Healthcare Industry
The Congressional Budget Office (CBO) estimates as many as 16 million more people will be uninsured by 2034. This increased uninsured rates and cuts to Medicaid funding is expected to lead to financial strain on healthcare providers of all sizes –– especially those in rural areas.
Overall, the bill could have consequences for the industry’s coverage, access and financial stability. In practice, this means that when clinics lose funds, they’re likely to lay off staff and reduce hours, affecting anyone who seeks care.
Additionally, when people lose access to insurance coverage, they tend to delay preventive care, often requiring emergency care instead. Urgent cares and emergency rooms will be more crowded, just as fewer providers are available.
Smaller healthcare business owners, like Physical Therapists, Nurse Practitioners and Physician Associates, may experience shrinking profit margins if they serve a population on Medicaid or those whose insurance is at risk once enhanced premium tax credits for ACA marketplace coverage expire at the end of 2025.
While these changes are enough to keep anyone in healthcare up at night, they don’t take effect until 2026. That means there’s time to prepare. “The changes we foresee won’t happen overnight, and I’ve been speaking with organizations across the country who are finding innovative ways to collaborate both internally and externally to develop solutions,” says Ross Downing, Contingent Financial Risk Segment Leader at HUB.
Key Provisions of the One Big Beautiful Bill Act and Their Impact on Healthcare Businesses
The new bill proposes roughly $1 trillion in Medicaid cuts over the next decade. Some estimated cuts to Medicare are as high as $600 billion. In addition to putting people at risk for losing access to healthcare, this will have a significant effect on the bottom line for everyone in working in the industry.
Caption: States in dark blue are expected to face the most significant cuts to Medicaid.
The following are some of the main ways this bill is expected to affect healthcare.
Rural health providers: Critical access hospitals and Federally Qualified Health Centers (FQHC), which serve low-income and immigrant populations, face great uncertainty if reimbursements shrink.
Hospitals and clinics: These organizations may need to cut staff, reduce employee benefits, limit hours or even close down. Clinics in areas with a high concentration of Medicaid enrollment are going to be hit especially hard.
Staffing: A sharp decline in funding could exacerbate the nursing shortage for service lines.
Operations: Proposed operational improvements for patient care may need to be put on hold.
Preparing Healthcare Organizations for Financial Risks from the One Big Beautiful Bill Act
No matter your business size, if you accept insurance, you will feel this bill’s financial burden due to:
- An increase in uncompensated care costs
- Reimbursement cuts
The following are the panelists’ recommendations for how to begin preparing now:
- Budget: Work closely with your financial team to identify your sources of funding. Find ways to balance budget limitations with future hiring needs.
- Technology solutions: Partner with organizations that can help you increase your reimbursement rates through data-driven technology solutions.
- Collaboration: Consider partnering with strategic partners to form clinically integrated, high-value networks that can help you enhance care and control costs.
- Compliance: Improve or maintain your internal compliance procedures in case of an increase in audits.
Related article: Proactive Compliance Checkup
How the One Big Beautiful Bill Act Could Raise Employee Benefits Costs for Healthcare Providers
Just as healthcare organizations are expected to face funding cuts, many people with Medicaid are simultaneously likely to lose their insurance benefits. When that happens, those who are eligible for employee-based plans will seek them, which will increase the costs of employee benefits for healthcare business owners. Cory Jorbin, Employee Benefits Compliance Practice Leader at HUB, recommends consulting with your employee benefits broker to explore potential solutions available in the market.
Enterprise Risk Management Strategies for Healthcare Businesses Facing Funding Cuts
ERM is a proactive, strategic approach to making informed business decisions by focusing on measures to prevent or mitigate the impact of risk events before they occur. “Organizations that already have ERM in place will need to reevaluate and update risk registers through the lens of this new threat landscape, but for everyone else, things like scenario planning will be good tools,” says Chrystina Howard, ERM Leader, Complex Risk Practice of HUB International.
The good news is that even if you’re a small business, you have plenty of time to do these ERM exercises. “Being proactive is going to be essential for people and organizations to maintain some semblance of order,” says Howard.
Howard recommends bringing the best minds in your organization together to determine your risks and identify solutions. For example, this might include leaders from finance, compliance, clinical, human resources and quality assurance teams. If you’re a small healthcare business, your support network of your insurance broker, business attorney and accountant can help you identify risks and possible solutions.
Medicaid Work Requirements and Compliance Changes Under the One Big Beautiful Bill Act
New compliance laws, such as work requirements for Medicaid, may not only affect your compliance practices but also lead to increased enforcement. “I wouldn’t be surprised if, coupled with these Medicaid cuts, we see increases in enforcement of Medicaid compliance,” says Howard.
At the same time, the federal government is cutting taxes and funding, the government still obviously needs revenue. Strictly enforcing existing laws through increased Medicaid audits is a potential source.
To help you prepare for this, CM&F Group partners with compliance experts, who can help you with compliance checklists and calendars for healthcare businesses of any size. “The best time to start with compliance was actually yesterday,” says Jorbin.
Finally, Howard recommends planning for the worst and hoping for the best. “Nothing’s certain at this point, and a lot of things can still change, so it’s important to stay flexible.”
Malpractice Insurance Risks and Coverage Needs Under the One Big Beautiful Bill Act
As coverage gaps widen and compliance burdens increase, your liability risk could rise even if you do everything right. That’s because financial strain and more crowded healthcare environments often lead to an increase in claims and audits. Whether you’re a solo practitioner or a growing business, having the right malpractice insurance can help protect your career and financial future. At CM&F, our policies are designed for today’s evolving healthcare landscape, as well as for the changes ahead.
Frequently Asked Questions
- What is the One Big Beautiful Bill Act and how will it affect healthcare providers? The One Big Beautiful Bill Act is proposed legislation expected to significantly cut Medicaid and Medicare funding. Healthcare providers—especially in rural areas—may face reduced reimbursements, staff layoffs, and increased financial strain due to rising uncompensated care costs.
- How can small healthcare businesses prepare for Medicaid reimbursement cuts? Small healthcare providers can prepare by reevaluating budgets, investing in technology to maximize reimbursements, forming strategic partnerships, and strengthening compliance protocols to mitigate risks from audits or penalties.
- Will the One Big Beautiful Bill impact employee benefits costs for healthcare employers? Yes. As more patients lose Medicaid coverage, healthcare employees may turn to employer-sponsored plans, driving up benefit costs. Employers should consult with their benefits broker to explore cost-effective solutions and plan proactively.
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