New Study Highlights Severe Health and Economic Effects of Medicaid Policy Changes in 2025

A recent peer-reviewed study published in JAMA Health Forum sheds light on the potential health and economic repercussions of Medicaid policy reforms enacted in 2025. Conducted by Waymark in collaboration with researchers from the University of North Carolina at Chapel Hill, the research evaluates the projected impacts of the so-called 'H.R. 1' bill, also dubbed the 'One Big Beautiful Bill Act,' which aims to overhaul Medicaid.

The legislation introduces stricter eligibility criteria, work requirements, and reduces federal matching rates, which are expected to cause significant coverage losses. Multiple estimates suggest that between 7.6 million and 14.4 million Americans could lose Medicaid coverage by 2034. Unlike previous studies focusing primarily on enrollment figures, this analysis quantifies how these policy shifts could influence both public health outcomes and local economies.

Key findings reveal that for every 100,000 individuals losing Medicaid, communities could face approximately 13-14 excess deaths annually, alongside 810-924 preventable hospitalizations each year. Economically, about 2,582 jobs might be lost annually, and overall economic output could shrink by roughly $1.2 billion each year.

On a national level, the study warns of increased risks for rural hospitals, many of which are heavily dependent on Medicaid, potentially facing closures. Federally qualified health centers are also predicted to experience revenue declines of 18.7% to 26.1%, primarily depending on how many of the losing Medicaid enrollees could obtain alternative insurance coverage.

The analysis incorporates a comprehensive microsimulation model based on empirical data from peer-reviewed literature, providing a detailed projection of the immediate and ripple effects of the policy changes. Dr. Sanjay Basu, the study's lead author, emphasizes that these reforms could have far-reaching consequences, especially for rural and underserved communities, affecting both health outcomes and the economic stability of local populations.

As H.R. 1 is now law, these findings serve as a crucial warning to policymakers to consider the broader implications of Medicaid restructuring. Co-author Dr. Seth Berkowitz underscores the broader community impacts, highlighting the importance of maintaining healthcare access for vulnerable populations.

The research team has made their model open source to facilitate ongoing updates as the implementation details of the law are finalized. This transparency aims to help policymakers and stakeholders understand the full scope of potential impacts and make informed decisions.

The study titled "Projected Health System and Economic Impacts of 2025 Medicaid Policy Proposals" can be accessed via full publication link. It brings to light the critical need to evaluate not just fiscal considerations but also the human and community health implications of Medicaid policy reforms.