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WH study warns 9 million Americans could lose health insurance in ‘major’ recession if Trump budget bill fails

by admin May 18, 2025
May 18, 2025
WH study warns 9 million Americans could lose health insurance in ‘major’ recession if Trump budget bill fails

The White House on Saturday released a study estimating that 8.2 to 9.2 million more Americans could be without health insurance as a result of an ensuing recession if President Donald Trump’s ‘big, beautiful bill’ on the budget does not pass. 

The finding comes from a White House Council of Economic Advisers memo titled, ‘Health Insurance Opportunity Cost if 2025 Proposed Budget Reconciliation Bill Does Not Pass.’ 

The research assumes that the U.S. had approximately 27 million uninsured people in 2025. If the budget bill does not pass, that could increase to approximately 36 million uninsured people, far closer to the approximately 50 million people who were uninsured before the implementation of the Affordable Care Act (ACA), also known as Obamacare, in 2010, according to the memo.

The memo says the estimate is ‘based on the assumption that states which expanded Medicaid with relatively generous eligibility will pull back to meet balanced budget requirements and try to provide more unemployment support during a severe recession.’ It also qualifies its conclusions by saying the analysis assumes ‘no policy countermeasures,’ which the White House describes as a ‘very unlikely but plausible worse case’ scenario. 

The White House projects that the expiration of the 2017 Trump tax cuts in 2026 and other shocks would trigger a ‘moderate to severe recession.’ The economic advisers report that a ‘major recession’ would result in reduced consumer spending as a result of higher individual taxes, lower small business investment and hiring as a result higher pass-through individual taxes, global confidence shock including concerns about U.S. competitiveness, and dollar deflation tightening credit and pushing real interest rates higher. 

According to the advisers’ ‘upper bound’ estimate of the impact of not extending the Trump tax cuts, U.S. GDP could contract by approximately 4% over two years – similar to the 2008 recession. Unemployment could increase by four percentage points, resulting in approximately 6.5 million job losses. Of those 6.5 million job losses, 60% had employer-sponsored insurance, so the White House projects approximately 3.9 million people would lose coverage and become uninsured as a result. 

The memo also anticipates a loss of individual and marketplace coverage, as those already without employer-sponsored insurance are no longer able to afford to purchase insurance themselves. The White House expects a 15% drop from approximately 22 million enrolled in 2026 to approximately 3.3 million losing coverage. 

Without the passage of the ‘big, beautiful bill,’ Medicaid and ACA subsidized plan enrollment could experience 10% enrollment frictions, resulting in approximately 500,000 to 1 million people losing or failing to gain coverage, the memo states. The expiration of the 2017 Trump tax cuts would disproportionately affect non-citizens, gig workers and early retirees, according to the White House. The advisers assess that individuals in those working classes without employer-sponsored insurance would no longer be able to afford coverage as a result of a recession, leading to 500,000 to 1 million insurance losses among ‘vulnerable segments.’

House Speaker Mike Johnson, R-La., is laboring to get the ‘One Big Beautiful Act’ through the House by a self-imposed Memorial Day deadline despite divisions among Republicans, who maintain control of the lower chamber by a razor-thin margin. 

The 1,116-page bill includes more than $5 trillion in tax cuts, costs that are partially offset by spending cuts elsewhere and other changes in the tax code, and would make permanent the tax cuts from Trump’s first term. 

It also realizes many of Trump‘s campaign promises, including temporarily ending taxes on overtime and tips for many workers, creating a new $10,000 tax break on auto loan interest for American-made cars, and even creating a new tax-free ‘MAGA account’ that would contribute $1,000 to children born in his second term.

The Associated Press contributed to this report. 

This post appeared first on FOX NEWS

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