News Analysis: The healthcare cuts approved by Trump, Republicans go well beyond Medicaid

Introduction

The federal safety-net healthcare system for low-income and disabled Americans, Medicaid, won’t be the only medical coverage devastated by the package of spending cuts and tax breaks signed into law by President Trump on the Fourth of July. Covered California, the state’s Affordable Care Act health insurance marketplace, estimates that as many as 660,000 of the roughly 2 million people in the program will either be stripped of coverage or drop out due to increased cost and the onerous new mandates to stay enrolled. Those who do stay could be hit with an average monthly premium increase of up to 66%.

Price Increase Imminent

Covered California serves as a marketplace exchange for state residents seeking healthcare insurance under the federal Affordable Care Act, widely known as Obamacare, allowing them to select from name-brand insurance providers and choose from a variety of coverage plans.
“A quarter of the people we cover are sole proprietors. That’s everything from mom-and-pop Etsy shops to a consultant, a highly educated tech worker in San Francisco doing contract work. We really have that full spectrum,” said Jessica Altman, the organization’s executive director.
The current cost for basic coverage ranges from $0 a month for individuals earning around $21,000 — just above the income eligibility for Medi-Cal — to 8.5% of the income of people making $75,000 or more, Altman said.
The vast majority of Californians receive federal subsidies to lower their premiums, including many middle-income families who had become eligible when Congress expanded the financial assistance in 2021.
Those subsidies were not renewed in the Trump megabill. In theory, the Republican-led Congress could remedy that before the end of the year but, given that Trump spent most of his first term in office trying to repeal the Affordable Care Act, the odds of that appear slim.
“We have many, many people paying less than $10 a month for their health insurance. We’re going to lose that price for sure,” Altman said. “We also have people, that person making $75,000 a year … they’re going to lose all of their tax credits and potentially pay hundreds more a month.”
And that price increase will start to hit home in four months, when Covered California’s open enrollment signup period begins for 2026.
Thousands of Californians will drop their coverage because they can no longer afford the expense, Altman predicts.
“This is a moment where Americans and Californians are so financially strained: Their rent, their food, their gas, their child care, all of their transportation, all of these things,” Altman said. “They are not in a position today where they feel like any of those costs can rise by 66%.”

Targeting Legal Immigrants and ‘Dreamers’

Approximately 112,000 lawful immigrants in California also will be stripped of premium tax credits and cost-sharing support, essentially pushing health coverage out of financial reach, she said. That includes immigrant groups that have been eligible for assistance for years, including those with work and student visas, refugees, asylees and victims of human trafficking.
“They are limiting it so only green card holders and a couple of very nuanced categories of certain Cuban immigrants and certain immigrants from Pacific Island nations can get financial assistance,” Altman said.
Immigrants who grew up in the United States after being brought here illegally as children, a group known as “Dreamers,” will be stripped of their eligibility, Altman said.
Thousands more Californians likely will drop coverage because of new burdensome verification requirements, including increased tax filings, and bureaucratic hurdles that must be overcome to maintain eligibility.

Big Picture

California Gov. Gavin Newsom already has warned that the cuts to Medicaid in what Trump calls the “Big Beautiful Bill,” a cornerstone of his second-term agenda, will lead to hospital and clinic closures, especially in the state’s underserved rural areas.
Altman said that impact will be exacerbated by the tens of thousands of Californians expected to lose their medical insurance they secured through Covered California. Medical facilities received higher compensation to care for patients who secured health insurance through Covered California than they do for patients on Medi-Cal. And hospitals and clinics will now take an even greater financial hit for caring for Californians with no health insurance, raising healthcare costs for everyone else.
“We know people will get less healthcare. They will not get their preventive care, they will not get their primary care at the rates that they do when they’re covered,” Altman said. “But when they really need care, they’re going to go get it. They’re going to get it at the emergency room, and our system is going to pay for it anyway.”

What Else You Should Be Reading

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Conclusion

The healthcare cuts approved by Trump and the Republicans will have far-reaching consequences for millions of Americans, including those in California. The cuts to Medicaid and the elimination of subsidies for middle-income families will lead to hundreds of thousands of people losing their health insurance, and those who remain insured will face significant premium increases. The impact will be felt across the state, with hospital and clinic closures expected in rural areas. It is essential for lawmakers to take immediate action to address these cuts and ensure that all Americans have access to affordable healthcare.

FAQs

Q: What are the expected consequences of the healthcare cuts approved by Trump and the Republicans?
A: The cuts are expected to lead to hundreds of thousands of people losing their health insurance, and those who remain insured will face significant premium increases.
Q: How will the cuts affect hospital and clinic closures in California?
A: The cuts to Medicaid and the elimination of subsidies for middle-income families will lead to hospital and clinic closures, especially in rural areas.
Q: What can lawmakers do to address the healthcare cuts?
A: Lawmakers can take immediate action to restore the subsidies for middle-income families and increase funding for Medicaid to ensure that all Americans have access to affordable healthcare.
Q: How will the cuts affect legal immigrants and ‘Dreamers’ in California?
A: Approximately 112,000 lawful immigrants in California will be stripped of premium tax credits and cost-sharing support, and ‘Dreamers’ will be stripped of their eligibility for health insurance.
Q: What is the expected impact on healthcare costs for everyone else?
A: The cuts will lead to higher healthcare costs for everyone else, as hospitals and clinics will take a greater financial hit for caring for Californians with no health insurance.