What OBBB Means For Healthcare

The One Big Beautiful Bill is now the law of the land. Signed on July 4, it’s being sold as a patriotic triumph of commonsense and fiscal sanity. But it cuts Medicaid dramatically, throws millions of people off of coverage, and erects a thicket of bureaucratic hassles for those who remain.

In this episode of CareTalk, John Driscoll and David Williams break down the sweeping healthcare implications of OBBB, from deep Medicaid cuts and strict eligibility rules to potential fallout for rural hospitals. While marketed as a win for personal responsibility and fiscal sanity, the hosts unpack how the law may actually drive up the deficit and leave vulnerable populations out in the cold.

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CareTalk is a weekly podcast that provides an incisive, no B.S. view of the US healthcare industry. Join co-hosts John Driscoll (President U.S. Healthcare and EVP, Walgreens Boots Alliance) and David Williams (President, Health Business Group) as they debate the latest in US healthcare news, business and policy. 

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Transcript

David: 0:00

Well, the one big, beautiful bill is now the law of the land signed on the 4th of July. It's being sold as a patriotic triumph of common sense and fiscal sanity, but it cuts Medicaid dramatically, throws millions of people off of coverage and Erects a thicket of bureaucratic hassles. For those who remain. Welcome to Care Talk, America's home for incisive debate about healthcare, business, and policy. I'm David Williams, president of Health Business Group. And

John: 0:34

I'm John Driscoll, the chairman of Yukon Health.

David: 0:36

Well, John, you and I are true patriots. We both celebrate our birthdays the same week as Uncle Sam. So how does that feel this year?

John: 0:43

Well, I'm kind of down, Dave. I mean, let's this, this, this, this, this kind of gruesome mishmash of a bill. Uh, but tell us Dave. What does the big beautiful bill mean for healthcare? High level.

David: 1:01

So it is a big one, John, and, uh, it means for healthcare, big cuts in Medicaid, stricter eligibility, uh, reducing access to the Affordable Care Act, and trying to prop up rural hospitals. And at the same time, they're being knocked down.

John: 1:18

I think Dave, the other thing that's really important to think about is the minimum of $3 trillion added to the national debt. I mean the, and that, and that's at the low estimate, the downstream effects of this bill. Are going to be higher interest rates for the country. What those higher interest rates also mean is higher interest rates for every hospital. So there's a two part effect here, one on healthcare and the second on the economy. And if the economists are right and interest rates interest on the debt goes up just because we owe a lot more money and are. Debt becomes then a little bit more expensive. The downstream knock on effects where it's gonna be a, it's gonna impact everyone, not just car loans for those and, and, and mortgages for those individual consumers. But it's also gonna affect every hospital in America. But maybe Dave, we dig into this Medicaid piece, maybe for our viewers. What is medic? What, what is Medicaid and who does it cover and how is it, you know, then let's get into the impact.

David: 2:24

Well, Medicaid is the, uh, joint federal and state program, uh, for those with low income, um, and those with disabilities, I. Medicaid, uh, that's originally kind of its focus now. It expanded significantly over the years, and in particular with the Affordable Care Act, one of the main ways of getting people into coverage was expanding the eligibility, including to, uh, men, people that don't necessarily have children. And so it expanded it and also to people with a little bit higher income levels. So Medicaid has become pretty big. And for states, John, it's typically the biggest item in their budget.

John: 3:00

Yeah, no, I is, Medicaid covers 73 million people in America. Over 40% of the births in the United States are covered by Medicaid. In the state of Connecticut where I live, it's one out of eight residents are covered by Medicaid. And to your point, that's a mix of the vast majority of them are people who were very poor or working poor or disabled. Moms serving children. And then there's this expansion category that during the, as part of the Affordable Care Act, extended coverage to workers who wouldn't typically get coverage from their employers. And all of that has added up to, you know, a, a fairly significant bill for Medicaid, but one that has extended insurance coverage at a higher level in the United States than it's ever been, which was actually. The original goal of the Affordable Care Act. So Dave, what's what? Maybe we get into what's the, what does this bill do to Medicaid, and then let's get into what the impacts might be.

David: 4:03

Sure. So, John, one of the things, I think the big headline is that a, a lot of people are gonna lose Medicaid coverage, and so I think we should start there. So you mentioned 70 plus million people covered by Medicaid. The low estimates are this is going to, uh, reduce the number covered by 11 or 12 million. It may be up to 17 million. So that's, you know, that's larger than the populations of any states. Could be a

John: 4:26

massive hit. To Medicaid and, and, and Medicaid is a pretty popular program right now, Dave, isn't it? Well,

David: 4:33

it is a popular program. People, I hesitate for a second'cause sometimes people don't even know that they're on it. As I mentioned, uh, before you have, uh, you know, some nice, uh, branding like in Massachusetts called Mass Health Tencare in Tennessee, Mecal, California Care

John: 4:48

in in, in, in Connecticut.

David: 4:50

So I've asked sometimes people, yeah, you're on Medicaid. Oh no I'm not. Don't on Medicaid, I have mass health. And so yes, it's popular, but not necessarily by name. Now if you notice, John, um, because the Republicans realize that it is fairly popular, they've looked at good talking points to attack it. And the idea is to say, Hey, it's for people who truly need it, and we're gonna throw people off who don't need it. And so the talking point I saw over the weekend and before was about. Some 20 something guy in the basement playing video games instead of out there working. But there's not 10 million of those people, John.

John: 5:24

No. In fact, this has already been tested, so you're absolutely right. What the Republicans have argued about this, I. Bill, I can't call it the beautiful bill, is that it's going to bring, uh, workers back into the workforce because it's gonna require them to show that they are working or pursuing community work. But this, this has been tried in Arkansas. In fact, Arkansas was the model where they. Applied strict working requirements where Arkansas, if you can recall, is also trying to re, re, you know, reduce child labor laws. But let's not get into that. They actually imposed exactly this bill, this, these work requirements, and what they found is a lot of people lost Medicaid coverage, but employment didn't go up. What happens is that. And this has been a history of strict work working requirements that the person who's typically poor and working 40 or 50 hours a week, honestly doesn't have time to go to the Social Security or the Medicaid office because they're at work in order to pa in order to co take care of their families. In fact, uh, most studies show that 92% of able bodied people. On Medicaid actually have, are working 20 to more than 20 or 30 hours a week. So these, this work requirement is really a head fake for people who really just wanna cut the number of people covered in this program in the total dollars. That's exactly what happened in Arkansas, and it's hard to believe that won't be exactly what happens. Across the country,

David: 6:56

John. It's sort of a chicken way to take, uh, coverage away from people by just saying you're acquiring them, you know, to work, which makes sense. Somebody shouldn't be sitting around, you know, playing video games. I don't even play it, not even in my basement, you know, so I'm like, I'm out there working hard. But it's really, it doesn't actually impose new. Work requirements. It, it imposes new requirements for documentation, which is all the time. And if you just hassle people enough, you know, you're just erecting these, these really, these bureaucratic, uh, you know, barriers and it, and it just prevents people from being able to, well, we,

John: 7:29

the benefit, we've got 20 years of history of trying this, like excess bureau, you know, paperwork and documentation. It's ironic to me, Dave. The anti bureaucracy, anti-government party is basically extending government bureaucracy and overreach to try to use documentation as a way to deny people coverage. And, and again, we've been, we different Republican states have tried this over time, most recently, Arkansas, and it, it doesn't fail to cut costs. It does fail to increase employment.

David: 8:02

So the other area, John, to mention is that there, uh, Medicaid is typically even something which doesn't require copays or they're very nominal, any kind of cost sharing. And there is some requirement here to increase the, uh, copays, including something like $35 for, you know, office visits. And by the way, that's, that's a lot of money if you're making $10 an hour.

John: 8:24

Yeah. No, I think that the, the, the, the, the interesting thing about this bill is the Republicans actually were concerned about the impact on Medicaid, but not so much as to protect it. Uh, because there is an increase in copays, the, the, the amount individuals have to pay. And we know, again, historically this has been studied, the more you increase copays for folks who are income constrained, it reduces the number of times they go to see the doctor. By the way, the folks who lose coverage and don't go to the doctor to get, for example, primary care or prenatal care for pregnant and parenting moms, all that leads to is. More. More bad babies, more people hitting the hospital, more dia, more uncontrolled diabetes. Those patients still can get very sick end up in the hospital and they go into the cash pay or uncompensated care bucket, which puts more strain on hospitals and clinics who are required to see anyone. Based on regardless of income category, but it also is likely to reduce the number of doctors, the independent doctors in the community who have the choice as to whether to cover someone who's covered on Medicaid, Medicare, or commercial. So all of this is going to restrict coverage. And be, create obstacles to care, but that doesn't actually reduce the burden, the economic, the healthcare pain, and the economic burden to the rest of us. So how do you think that's gonna work out? Dave?

David: 10:01

John, you raise a good point, uh, regarding what the impact is on hospitals and physicians, because keep in mind that, uh, you know, 25-year-old in the basement playing video games, the Medicaid payment's actually not going to him. What it does is that when he's sick and goes to the hospital or the doctor, it, it provides a mechanism for the physician or the the hospital to get paid. So what's going away is the funding mechanism for provider organizations, inclu and, and individual, uh, practitioners. And so. There's gonna be a big impact there, John. And, and you mentioned that, uh, you know, Republicans didn't see they, you know, they're scared to do this in a way, but not enough to save Medicaid, but they did put this rural stabilization fund in, which is some sort of a, an indicator of they're fearful about this. Well, it's, you

John: 10:47

know, think it, like what, what is the rural stabilization, the $30 billion that the Republicans kind of. Stuffed into the bill last minute to buy some votes. What does that 30 billion rural hospital fund represent? And Dave, maybe, maybe we could dig into why it seems a little muddy.

David: 11:06

Yeah. I think they actually increased it to 50 billion. What I think it, uh, did, it was against Senator Murkowski's vote. Uh, that's, that's the actual impact of it.$50 billion. You know, it's, it's, it's unclear what it don't,

John: 11:17

don't forget the support for Alaskan whaling captains, that that was also part of buying her vote.

David: 11:23

Yeah. So. The idea is basically, here's the idea, John. It's like they cut it and they, you know, they cut Medicaid and realize this is gonna have an impact on basically Trump voters, you know, in places where they live. And so they said, I. Uh oh. You know, and they're sort of like, well, we're not gonna actually undo this because the president wants it, and we're just gonna have to have this in time for the fireworks, but maybe we'll put a little F up fund in there that's just, maybe we can stop some badness from happening. Well, you,

John: 11:55

you know, you raised a really important, you know, uh, poor, poor and lower working class people voted, uh, but I think it was 50 to 48%. For President Trump, and most of those folks are on Medicaid or Will, or their, their families at some point will be on Medicaid. So, and they, they know that when you take 11 to 16 million people off the rolls off of coverage, you're gonna put a lot of pressure on rural hospitals, many of which are, are basically on the bubble right now in terms of whether they'll survive when a rural hospital closes. It isn't just a, a loss for the healthcare system. It actually. Affects everyone in the community and it, and actually reduces the amount of people who want to invest in that community. Because most businesses and larger companies and people wanna raise their kids, want to be in a community where they can actually get taken care of. So it can really hollow out a community. In many cases, those rural hospitals are the largest employers in some of these areas, and so they put in this, it sort of crazy to me to. Cut coverage for, for the most part. Again, 92% of all people on Medicaid who are able bodied are already working, so they're gonna cut that coverage. And so rather than pay that for that coverage, keep people healthy and keep a reasonable revenue for the hospitals, they're somehow gonna do this backdoor 30 to $50 billion in support for hospitals. And Dave, I don't even think we know how that's gonna be administered.

David: 13:28

You know, they've got, uh, this, this plan that says you have to use it for at least three of the following things, and there's a long list of items, emergency services, maternity care, staffing, stabilization, whatever that means. But there's restrictions. They could limit how it's spent. And John, it's actually more bureaucracy for a hospital, little rural hospital, which keep in mind doesn't have a lot of extra staff to go and do this to research how they're gonna do it. Am I meeting three of these criteria? Who's gonna get it? The administrator has the ability to basically hand out. Isn't it

John: 13:59

ironic,

David: 14:00

David,

John: 14:01

that the, again, the do anti bureaucracy can't, like, can't state government. They're creating more, you know, complicated government mechanisms. To sort of come back to, to sort of, to, to sort of re-underwrite some of these communities.

David: 14:19

John, I, I think that I, you've used that term ironic a couple times, and I think it's, that's a very charitable word in this case, it's cynicism. Well, thank you Dave. It's cynicism. John is what it is. It was never an intention really to streamline things. There's no problem making barriers to people that are, you know, like not, uh, you or people, things that you don't favor. Immigration being, you know, point number one on that. There's not really about streamlining. Uh, so I don't think I, I, yes, I find it ironic, but I think the intent is just very cynical. There's no real commitment to efficiency. Well, you know, if

John: 14:50

you really wanna, and you, you could argue that it's cruel. I mean, we have that. One of the other aspects of this bill that I find most offensive is 7 million people are gonna lose their snap or food benefits. 2 million children. It's really hard to argue. That has anything to do with the health of a country, the richest country in the world, that we can't afford to provide food benefits for those families that are hungry. And those 2 million kids, I mean, all we're doing is really impacting their health. I. When you reduce food benefits, uh, for people who are income and food insecure, what you're doing is, is putting more pressure on them, more stress. And frankly, we know that when people, uh. Are not getting two or three healthy meals a day. It increases their likelihood of diabetes. It impacts for kids their development, uh, of, of iq. It increases the number of hospitalizations. Um, so what I think the, the, the, that a bill that, again, the majority of the benefits of this bill are going to. Wealthy and near wealthy people. In fact, some estimates say that the top one PERS will get as much as a million dollars of tax benefits a year, while actually for the poorest 10% of America increasing their effective taxes by about $1,700. But there's a whole slew, whether it's Medicaid cuts or food stamps or other impacts, excess bureaucracy required for them to actually. Justify their qualifications for benefits that effectively I think are gonna have some pretty cruel impacts on some of the poorest people in America.

David: 16:39

John, I wanna touch on two more topics before we close here. Uh, one of them has to do with Obamacare, and the other one is the impact I. For 2026 politically. So for Obamacare, you know, for a long time after the Obamacare's passage, the real mantra was about rep, repeal and replace. And there were never, you know, plans, there was concept of a plan and so on. And you didn't hear a lot about Obamacare directly during this debate and hasn't really been raised as an issue. One reason I think is 'cause Obamacare is pretty popular. Um, so did this big bill repeal and replace Obamacare finally.

John: 17:17

No, it's just shredding and undermining it. I mean, the, the, the Obamacare is health, health insurance for all Americans, or for as many Americans as we could afford, is incredibly popular among Americans. They know that Obamacare extended. Access to insurance beyond a, through the exchanges and through the me, through the Medicaid extensions of, of, of subsidies. So effectively what Obamacare does, or the buildup or the prior regime under Obama and Biden. It extended through Medicaid, the subsidies for folks who otherwise wouldn't get individual or group insurance. Um, by taking those away, they've just undermined coverage for the most vulnerable. And again, it's, it's, uh, a cynical's probably the best word, rather than attack the bill directly, they've undermined its. At and underminded at the edges by attacking the most vulnerable folks who have the har, who have the least voice. I mean, what's interesting David, is I think this is gonna have a direct electoral impact, uh, because people will feel this, although, uh, there's some nuance there. Do you wanna, maybe, maybe let's go to, unless you've got other co thoughts on how this affects the. The traditional coverage in under the a CA? Uh, let's get into maybe the political impact of this.

David: 18:53

Yeah, I mean, I think even though people don't really know exactly what's in the bill, hopefully, first of all, they know a little bit more now after we've discussed it as it relates to healthcare. But there's a general lack of, uh, enthusiasm for it. People have a general idea. This is about taking something away and it's really not about. Putting the country on a better, uh, fiscal footing because it's also clear that the, uh, the debt and the deficits are going to rise. So you should, you would say normally I'd say, yep. You know what? This is gonna, interim elections are coming up next year. This is really gonna be the thing that puts the Republicans out because, uh, just because of the nature of the bill. Now there's a couple of reasons to think that might not be the case. Uh, one of them is that the Democrats have been bad. At, uh, framing the alternative and, you know, doing things that are, that are actually effective. Instead, you see some things that, uh, actually give more ammunition to, um. Republicans to say the Democrats are, are crazy. So it depends on Democrats doing a good job. And it also, um, depends on the, you know, broader beyond healthcare, kind of manipulation of the whole system and whether we really have free and fair elections as early as 2026. And I honestly think that if it appears, uh, to the administration that they're likely to lose the election, you may see even more aggressive approaches to suppress, uh, at least to suppress the vote.

John: 20:20

Well, I, let's, let's, before we go there, I think that there are some, what, what is the, the, the where, where does this bill sit right now? Well, there's a lot of noise and fanfare about this bill. I think, you know, Quinnipiac found that only 27% of registered voters supported this bill with a 53% oppose Fox News. Found that 38% of its uh, uh, poll responses support the bill while nearly 59% oppose it. So even with all of the. The, the, the, the package, uh, um, horse stuff and promotion and the flyover and the patriotic nonsense, you've got nearly 60% of all Fox News watchers who tend to be pretty conservative opposing this bill. So I do think that the Republicans have their work cut out for them in terms of explaining this kind of mosh of a, of a bill that really is, cuts benefits for the poor and increases benefits for the rich. One of the things that they've done in this bill, which is particularly cynical, is they post, they pushed the deadline for, for e executing some elements of this bill so that they, the, the results really won't be felt by average consumers until after the 2026 election. So I do think, Dave, they're concerned about that. But what's interesting is 60% of Fox News of their own constituents, their most loyal constituents, already oppose it. I think this is a, it's a, it's a, uh, a takeaway for many Americans, but it's a gift for the Democrats if they know what to do with it.

David: 22:06

I agree, John. I mean, objectively, this should be an easy bill to run against. It doesn't benefit many people individually. It's a very small number of individuals that would benefit from it. It definitely harms people directly. And you could also see that even at the headline level, uh, it increases the debt and the deficit. So you're not really. You not really have a trade off. Okay, well we more fiscally responsible, but you know, there's this pain, there's no, there's no, there's plenty of pain and no gain.

John: 22:34

There, there's a, there's a, there's a, there's a, there's a belief, I think it's almost religious in the, in the Trump administration, that by extending these tax cuts to the rich and pushing even more benefits that that are, I mean, including to kinda real estate. Titans and others that somehow there'll be by, uh, and the combination with tariffs will increase the rate of growth, which will overcome the massive deficits that they're creating. But the results would suggest, and no economist without a political agenda has. Agreed with them that that debt and deficit will, you know, increase the, the, the debt and deficit and frankly increase the concentration of wealth at the very high end. And those wealthy people are not those who are part of the consumer economy, they'll just invest in the market. I mean, I think it was the, um, you know, the US Council of Catholic Bishops not typically a. Terribly progressive organization that when was talking about this bill, said it takes from the poor to give to the wealthy. I don't think we need to, there's not much to contradict in, in what the bishops wrote. Uh, and I think that message is one that undermines Trump's appeal and the Republicans appeal to the working in the lower class. I think it's, it's gonna be very, very interesting to see how this plays politically. There's a, a lot of other, you know, small cuts to healthcare that are, they're not so small when, when, when done at a national level, whether it's the different ways that hospitals and states have typically funded Medicaid through taxes or tweaks to the, the system called fmap. That's the way the states and the feds actually match. There are beyond the headline number of the 11 to 16 million people who lose coverage, which is the biggest healthcare impact and the cut in food stamps or food benefits to 7 million people. There are a whole series of other cuts and and changes that UL ultimately undermine the states and the federal government's commitment to make sure that poor people can actually get health insurance and that the system. Hospitals and federally qualified health centers, the, the local health centers are funded in a way that can sustain themselves in poor and middle class neighborhoods.

David: 25:02

Well, that's it for you and, uh, yet another episode of Care Talk. We've been talking about the one big, beautiful, uh, birthday week, John, for the country, and for you and for me. Uh, if you like what you heard, I hope that you're gonna subscribe. John, maybe you could get a second subscription to, uh, to Care Talk. I'm David Williams, president of Health Business Group.

John: 25:19

And I'm John Driscoll, the chairman of the Yukon Health Assistant. If you liked what you heard or you didn't, particularly on this upbeat, uh, review of the of the big budget bill, we'd love you to subscribe on your favorite service.