Largest Beneficiaries and Victims of Trump's Previously Announced Tax Scheme
The One Big Beautiful Bill (OBBB), President Trump's new tax law, has far-reaching implications for various sectors, particularly Medicaid and food assistance programmes.
The OBBB pays for new tax cuts by making significant funding cuts to key programs, including Medicaid and the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps. Medicaid funding is cut by over $1 trillion (about 15%) over the next decade, and SNAP funding is reduced by about $186 billion (20%) in the same timeframe.
For Medicaid, the law introduces stricter eligibility, more paperwork, and enrollment limitations, particularly affecting adults who gained coverage under the Affordable Care Act's Medicaid expansion. These cuts disproportionately impact states that expanded Medicaid, experiencing an average 14.5% funding reduction, versus a 7.9% reduction for non-expansion states.
The law imposes new requirements like “community engagement” for certain Medicaid enrollees, especially low-income adults. While the law creates a $50 billion Rural Health Transformation Program over 5 years starting in fiscal year 2026, overall Medicaid spending in rural areas is still expected to decrease by $155 billion, harming healthcare access.
Regarding SNAP, the 20% cuts threaten about 3 million people losing food assistance and will reduce average household benefits by about $146/month, or approximately $1,752/year.
The impact on rural hospitals and low-income families is severe. Over 700 rural hospitals (about one-third nationwide) face potential closure due to funding cuts, losing an estimated $70 billion over the next decade in Medicaid reimbursements, with some states facing up to nearly 30% reduction in Medicaid hospital payments. This threatens access to care in many rural communities, where Medicaid is a substantial federal funding source and hospitals already struggle with low reimbursements and unstable revenue.
For low-income families, losing both Medicaid coverage and food assistance significantly reduces healthcare and nutritional support, exacerbating poverty and health disparities.
Additional provisions affect undocumented and immigrant families, restricting access to tax credits and increasing immigration-related fees, which indirectly impacts their economic and health security.
In summary, Trump's OBBB tax law cuts Medicaid and SNAP funding markedly, causing millions to lose health insurance and food support, threatening rural hospital viability, and worsening conditions for low-income Americans, especially in rural and expansion states.
- Despite the preoccupation with politics and general news, the OBBB tax law's significant impact on education-and-self-development is worthy of attention, as the cuts in Medicaid funds could make it more challenging for some individuals to pursue studies or self-improvement programs requiring healthcare.
- The OBBB tax law's impact on sports could be substantial, as the strain on rural hospitals due to funding cuts might lead to reduced healthcare services for athletes, potentially affecting their performance and overall sports landscape, especially in rural areas.
