White House study raises alarm: 9 million Americans could lose health insurance in 'major' recession if...

Time of India

20-05-2025

Around 8.2 to 9.2 million Americans could be at the risk of losing health insurance as a result of ensuing recession if President Donald Trump's "big, beautiful bill" on the budget does not pass, the White House said on Saturday. The details were released in a study which stated millions of Americans could lose their health insurance if the proposed budget reconciliation bill fails to pass.
Titled "Health Insurance Opportunity Cost if 2025 Proposed Budget Reconciliation Bill Does Not Pass," the analysis 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", according to NewsWeek.
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What does the research say?
The memo of the White House comes at a time as the debate in Congress over the House Republicans' health care and budget agenda has intensified. The research assumes that the US 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.
Many people in the health industry have been issued a warning that the proposed budget could put millions of lives at risk- being pushed off the Medicaid program. However, in the memo, the White House is arguing the opposite—that the budget would save millions from losing their health insurance.
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According to the projection by the White House, the expiration of the 2017 Trump tax cuts in 2026 and other shocks would trigger a "moderate to severe recession", as per Fox News. Economic advisers apprehend that a "major recession" would lead to reduced consumer spending due to higher individual taxes, decreased small business investment and hiring from increased pass-through taxation, a global confidence shock over U.S. competitiveness, and dollar deflation that tightens credit and raises real interest rates.
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What does the memo reveal?
"Let's assume that expiration of the 2017 Trump tax cuts in 2026 and other shocks 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. Based on our assumptions, we estimate a net increase in uninsured of potentially 8.2 to 9.2 million people if the 2025 Proposed Budget Reconciliation Bill does not pass," the White House said in a memo.
The memo projected a dramatic rise in the uninsured population if the legislation known as the 2025 Reconciliation Bill stalls in Congress amid economic downturn concerns. The White House Council of Economic Advisers memo assumed a baseline of roughly 27 million uninsured Americans in 2025.
According to the memo, around 3.9 million people could lose health coverage if the budget bill fails, as 60 percent of the affected jobs currently offer employer-sponsored insurance. The memo also projected a 15 percent decline in coverage among the 22 million individuals enrolled in individual or marketplace health plans, potentially resulting in an additional 3.3 million losing their insurance.
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Furthermore, between 500,000 and 1 million people may lose access to coverage through
Medicaid or Affordable Care Act
(ACA)–subsidized plans.
While the White House emphasized the risks of the bill's failure, opponents have raised alarms about the consequences of its passage. Republicans contend that the bill is essential for curbing federal spending and reducing the deficit. Critics, however, warn that the proposed cuts would disproportionately harm low- and middle-income Americans who depend on ACA subsidies to maintain their health coverage.
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.