A new report from the centrist think tank Third Way warns that the proposed $1.1 trillion in health care cuts under the Republican-led “One Big Beautiful Bill Act” could push millions of Americans off their insurance and deeper into medical debt. If enacted, the legislation could increase total U.S. medical debt by $50 billion, a 15% jump that would ripple through hospitals, providers, and ultimately the credit and collection ecosystem.
The big picture: According to Third Way’s analysis, released this week, the budget bill’s cuts to Medicaid and the Affordable Care Act would:
- Cause 16 million Americans to lose health coverage.
- Push 5.4 million additional people into medical debt.
- Raise the total national medical debt burden from $340 billion to nearly $390 billion.
The Congressional Budget Office confirmed the coverage-loss estimates, with the largest drops coming from the expiration of ACA premium subsidies, reinstatement of Medicaid work requirements, and new restrictions on Medicaid eligibility.
Without coverage, families face average increases of $22,800 in medical debt if they previously had none, or an additional $8,790 if they already carry a balance.
State-level impact: The projected fallout from the proposed cuts includes:
- Florida: 771,000 more people with medical debt totaling $7.2 billion.
- Texas: 660,000 more people with debt totaling $6.2 billion.
- North Carolina: 237,000 additional people with $2.2 billion in debt.
- Ohio: Nearly 150,000 more with $1.4 billion in balances.
These increases would disproportionately affect middle-class families and those living in rural areas and non-Medicaid expansion states.
What they’re saying: Senators Jeff Merkley, Ron Wyden, Cory Booker, and Chuck Schumer issued a letter warning that the plan would “put working-class families further into debt” and “stand in the way of the American Dream”.
“Medical debt is already affecting more than 100 million people in this country,” the senators wrote. “It’s not just a financial issue—it’s a public health crisis.”
Read the report. Read the letter
