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HOW TRUMP’S HEALTHCARE CHANGES MIGHT AFFECT YOU

Volume 124, No. 4April, 2024

Martha Hyde

On July 4 President Trump signed the package known as the “One Big Beautiful Bill Act” into law. It was crafted as a “reconciliation” bill which meant it only dealt with budgetary issues. The reason for doing it this way was so it could be passed in the Senate with a simple majority. It passed the House by a vote of 218-214 and in the Senate 51-50 with the vice president breaking the tie.

Trump’s bill covered a lot of ground. Health care is one of the areas most affected, particularly Medicaid and the Affordable Care Act (ACA or Obamacare). Because these two aspects of health care may affect Local 802 members (especially the ACA), I want to present some analysis below.

A word on my own background: as many of you know, I’m a full-time musician, not a professional “healthcare expert,” but I’ve been thinking about and studying health care for years, and have served as a trustee on the Local 802 health plan for decades. I’ve also attended conferences on union benefit plans. Please consult a professional before considering any changes to your health coverage. Everything I write below is based on what I’ve learned and researched, but it does not constitute legal or professional advice. I list the sources for my article at the end.

Now let’s look at some of the effects of the “One Big Beautiful Bill Act” (I’ll call it OBBBA for the rest of this article.)

Medicaid

Medicaid is a health insurance program for low income people. It is jointly funded by the states and the federal government. The original intent was to cover pregnant women, disabled people and small children. The Affordable Care Act (ACA) expanded the program to include all low income people ($21,597 which is 133% of federal poverty level for an individual in 2025). The ACA features premium subsidies for people with incomes between 100 and 400 percent of the federal poverty level. People with incomes below 100 percent of poverty level ($15,650) were intended to be covered by the expanded Medicaid. However, in 2012 the Supreme Court ruled that states could not be required to expand Medicaid to all low income people. Today Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin and Wyoming are the only states that have not expanded. Adults below the poverty level in those states do not have access to premium subsidies or Medicaid and are left uninsured.

Here are the changes to Medicaid

Most of OBBBA’s changes either make it more costly for states to expand Medicaid to cover adults, restrict who can be covered or make it harder to get covered. The American Rescue Plan Act (ARPA) of 2021 added a financial incentive for states to expand. This ends January 1, 2026 under OBBBA. Under the ACA expansion states had the option to require co-pays for people above the poverty line ($15,650). Now states are required to charge up to $35 for some services. Effective October 1, 2027 states will receive a reduction in federal funds if they cover immigrants without qualified status including funding for emergency care. Effective no later than December 31, 2026, adults between the ages of 19 and 64 will have to prove every month that they are either employed or participating in “qualified activities” for a minimum of 80 hours a month. If they are disenrolled from Medicaid for this reason they will also be ineligible for premium subsidies on the ACA marketplaces. Rules intended to remove barriers to enrolling in Medicaid and Medicare are delayed until January 1, 2035. States currently can raise funds to help pay their share of Medicaid through “provider taxes.” Under OBBBA they are prohibited from raising those taxes or establishing new ones.

The American Rescue Plan Act (ARPA)

ARPA, passed in 2021, is best known in the musician community as the law that saved our pension fund. But it also expanded ACA premium subsidies. The ACA has premium subsidies for people with incomes between 100 to 400 percent of the federal poverty level on a sliding scale depending on income. This meant that musicians who toggled back and forth between 400 percent poverty and above faced a “subsidy cliff” meaning their premiums could jump by a huge amount month to month. ARPA ensured that no one would pay more than 8.5 percent of their income on premiums. This provision was set to expire at the end of 2022 but was extended by the Inflation Reduction Act (IRA). It now will expire at the end of this year so folks will once again face a subsidy cliff. According to the Kaiser Family Foundation Health System Tracker, this means an increase of 75 percent in premiums on average. This will likely result in healthier people dropping out instead of paying the higher premiums which will then increase premiums even more as the pool of insured people gets smaller and sicker.

Here are more changes to the ACA

In addition to enhanced subsidies sunsetting, OBBBA has made it harder to enroll in the ACA marketplaces. Every year people will have to update their income and immigration status or be disqualified. There will be no automatic re-enrollment so people will have to re-enroll manually. There is now less time to do that because the open enrollment period is shrinking, ending on December 15 instead of January 15. The subsidies that are available will be held back until the application process finishes rather than giving people the benefit of the doubt.

Here are the changes to Medicare

OBBBA reduces the amount poor Medicare recipients receive in a program called “extra help.” Medicare recipients whose income is at 150 percent of poverty or below qualify for a Low Income Subsidy (LIS). This “extra help” reduces premiums and deductibles for Medicare Part D which is prescription drugs. These subsidies are reduced under OBBBA. Another change affects Medicare Savings Programs (MSPs) which are state administered programs to help poor people pay Part B premiums, copays, hospital stays, nursing homes and more. A rule that would have streamlined enrollment in MSPs has now been delayed ten years under OBBBA, meaning poor Medicare recipients will have to wait longer for the help. And certain immigrants who have legal refugee, asylum, or protected status will no longer qualify for Medicare coverage even if they paid the payroll taxes that fund it.

OBBBA cuts about $1 trillion in government spending on health care. That is a little over a fifth of total US spending on health care. There is possible fallout beyond Medicaid, Medicare and the ACA. Many rural hospital patient populations rely heavily on Medicaid. If people lose their coverage and seek medical care they cannot pay for, this will push those hospitals to the brink and some may close, leaving large rural areas without hospital service. It is unlikely that the total $4.5 trillion US healthcare spending will go down in aggregate because OBBBA only restricts eligibility, it does not address the often inflated cost of care or the cost of poorly managed care. This means the burden will fall more heavily on private health insurance which will respond by raising premiums. It will also put more pressure on self-funded plans like the Local 802 Musicians Health Fund which, like insured plans, will be stuck with higher medical costs as providers look to offset the losses incurred by the $1 trillion cut.

I sometimes say half jokingly that I’ve been giving musicians bad news for decades. I wish it were better. But until the U.S. finds the will to institute a system of universal national health coverage, I am not optimistic. I share information I’ve learned with members because I think it’s best to be prepared for what might be tough times. I’m confident about the accuracy and I’ve listed my main sources but there are other corroborating sources. Please feel free to e-mail me with any questions at mhyde@local802afm.org.

Martha Hyde is a longtime Local 802 member and Broadway woodwind doubler. She’s a member of Local 802’s Executive Board and serves on the Local 802 health fund, the AFM pension fund, and the DECIBAL steering committee.

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