GOP Budget Bill Could Increase Medical Debt by $50 Billion, Affecting Millions: Report

Proposed federal health-care cuts under the Republican-backed “One Big Beautiful Bill Act” could add as much as $22,800 in medical debt per family and push total U.S. medical debt up by $50 billion, a new report from think tank Third Way reveals.

The bill, which includes $1.1 trillion in cuts to Medicaid and Affordable Care Act (ACA) coverage, has already passed the House of Representatives. According to estimates by the nonpartisan Congressional Budget Office (CBO), approximately 16 million Americans may lose health insurance if the legislation is enacted in its current form. This includes 7.8 million people on Medicaid and 8.2 million covered through the ACA.

Person counting money | Source: Pexels

Third Way projects that these coverage losses could lead to 5.4 million more individuals living in families with medical debt. An estimated 2.2 million households would incur medical debt due to Medicaid coverage loss, and 3.2 million due to changes in ACA policy.

Without insurance, about 87% of affected households would see new medical debts averaging $22,800, while another 13% could add $8,790 in debt atop existing balances. Currently, over 100 million Americans hold medical debt, according to KFF.

“Medical debt stands in the way of the American Dream,” said David Kendall, senior fellow at Third Way. “We shouldn’t make it worse.”

Person counting money | Source: Pexels

In a joint letter Monday, Democratic Senators Jeff Merkley, Cory Booker, Chuck Schumer, and Ron Wyden urged Republican leaders to reconsider the cuts, calling medical debt a “national priority” and citing data that health insurance significantly reduces debt levels.

The White House has defended the proposed cuts as targeting “waste, fraud and abuse,” promoting the bill as an “economic windfall” for working Americans.