The White House released a memo recently estimating that between 8.2 and 9.2 million Americans could lose their health insurance if the Trump administration’s proposed budget reconciliation bill fails to pass.
The analysis, titled “Health Insurance Opportunity Cost if 2025 Proposed Budget Reconciliation Bill Does Not Pass,” was produced by the Council of Economic Advisers and warned that, should the budget not be brought into action, the country could enter a “major recession.”
The analysis assumes that expiration of the 2017 Trump tax cuts in 2026 and other shocks would trigger a moderate to severe recession. Such a recession will be driven by higher tax rates which will result in a reduction in economic activity that will lead to significant unemployment. This in turn will strain state finances and likely lead to reductions in generosity of benefits including Medicaid for states providing greater benefits than the average Affordable Care Act Medicaid expansion state.
The research estimates that around 27 million people in the U.S. will be uninsured in 2025. But if the budget bill fails to pass, it says that number could rise to about 36 million—approaching the roughly 50 million who lacked coverage before the Affordable Care Act (ACA), commonly known as Obamacare, was enacted in 2010.
Many in the health care industry have raised concerns that the proposed budget—if enacted—could jeopardize millions of lives by forcing people off the Medicaid program. However, the White House counters this narrative in the analysis, arguing that the budget would actually prevent millions from losing their health insurance.
A May 20 White House memo also said the tax bill would protect “Medicaid for Americans by kicking 1.4 million illegals off the benefits” by eliminating “waste, fraud, and abuse” by illegal immigrants “who are gaming the system.”
Interestingly, the White House’s estimate that between 8.2 and 9.2 million would lose coverage if the tax bill is not passed is similar to the Congressional Budget Office’s estimate that passing the tax bill would result in approximately 8.6 million Americans losing their health insurance coverage, primarily due to significant cuts to Medicaid.
The CBO analysis says that the bill’s provisions—such as implementing work requirements, increasing co-payments for certain recipients, and tightening eligibility verification—would lead to a substantial reduction in Medicaid enrollment over the next decade.
President Trump’s “One Big Beautiful Bill” is progressing through Congress but faces significant hurdles before it can become law. If passed by the House, the bill would move to the Senate, where Republicans hold a slim majority. The reconciliation process allows for passage with a simple majority, but any defections could jeopardize the bill’s success.
