When President Donald Trump signed the One Big Beautiful Bill Act into law earlier this month, the reaction from healthcare groups was overwhelmingly negative.
The law slashed Medicaid spending by hundreds of billions of dollars over the next decade and eliminated Affordable Care Act subsidies. Experts say the passage of this legislation will cause uncompensated care costs to balloon, leading to hospital closures and diminished care access, particularly among rural hospitals and underserved populations.
However, amid the gloom, there are a small handful of notable provisions that could contribute to meaningful progress in the healthcare sector.
Some promising healthcare policies tucked inside the bill include expanded telehealth access, new tax incentives for domestic medical manufacturing, support for pharmaceutical research, and a growing opportunity for employers to innovate in health benefits design.
Boosting telehealth access
There was a major telehealth win in the law. It permanently extends first-dollar telehealth coverage for high deductible health plans — meaning people with these plans can have peace of mind that their telehealth visits will be covered before they meet their deductibles, and they get to keep their health savings account benefits.
The American Telemedicine Association, which has been advocating for the permanent extension of telehealth coverage for the past five years, said the change is a major milestone for telehealth.
“Making this permanent will provide certainty for healthcare providers, and employers, improve health outcomes, strengthen employer-sponsored health benefits, and reduce disparities in care,” Kyle Zebley, senior vice president of public policy at the American Telemedicine Association, said in a statement.
About half of the private workforce is enrolled in high deductible health plans, noted Caroline Savello, president of Color Health, a telehealth company that provides screenings and counseling for cancer.
High deductible health plan enrollees often end up avoiding care due to cost, so this change removes a key barrier by covering telehealth services up front, she explained.
“High deductible health plan limits are often higher than the household savings patients have on hand. And we know that care seeking among those on these medical plans is overall worse. This [coverage extension] is making it very, very feasible to access a tremendous array of preventive health services in particular, as well as ongoing care for folks on these plans on a permanent basis — and through a really cost-effective model, which I think telehealth has proven to be,” Savello remarked.
Over the past few years, employers have been hesitant to fully adopt or promote telehealth offerings because of regulatory uncertainty. Now, Savello believes they can confidently expand access to these services.
Boosting telehealth access will help lower overall healthcare costs, she noted, by shifting care away from high cost settings and making it more realistic for people to get timely treatment before their conditions become more serious and expensive. Greater access also will lead to better care quality across the nation’s rural communities, Savello added.
Telehealth dramatically improves access to specialists in rural areas, where healthcare infrastructure has rapidly declined in recent years, she said. In many of these regions, hospitals have closed and specialist providers are scarce — leaving patients with the choice of traveling hours or going without care.
Virtual services can bridge that gap by connecting patients to expert care from their home or local clinic.
“We’ve seen cancer hospitals close in rural areas, and we definitely see huge limits on cancer specialist access. So that shift to virtual access to specialists is very important to us and to the employers that we work with,” Savello stated.
By ensuring permanent coverage for telehealth, the extension brings much-awaited stability to virtual care.
Giving employers an opportunity to shine
The One Big Beautiful Bill Act’s failure to extend Affordable Care Act tax credits or protect Medicaid coverage creates an opportunity for employers to step up with innovative health benefits designs, especially in a tight labor market, pointed out Ben Light, vice president of partnerships at Zorro.
His company is a benefits platform that helps employers offer health coverage through individual coverage health reimbursement arrangements (ICHRAs). Under these arrangements, employers provide workers a fixed amount of pre-tax money to buy their own individual health coverage and pay for health expenses.
“We’re in a highly competitive labor market, and now you have employees who are going to lose their coverage through Medicaid or through the ACA and its expanded tax credits. They’re going to look somewhere to find support — and I think they’re going to look to their employers. If you’re an employer who can find a way to be generous with contributions to people’s insurance, then I think you’re going to do quite well,” Light declared.
Employers can launch an ICHRA solution in just a few weeks, and doing so would provide much needed support for employees who lose coverage, he said. He noted that ICHRAs can help lower employers’ overall costs as well by pooling workers into the individual market.
Those savings, Light explained, can then be reinvested in other benefits, such as direct primary care subscriptions. He highlighted new provisions in the law that allow health savings accounts to be used for direct primary care — a model he thinks is underappreciated but valuable, as they offer longer visits and better access to physicians compared to traditional models.
“Someone can now have a 45-minute appointment or can have more access to their physician, instead of being shuffled in and out in 10 minutes and maybe not get the treatment that they want,” Light stated.
This could represent a meaningful shift toward more personalized, proactive care, he added.
He said it will be interesting to watch how employers might play a bigger role in keeping Americans healthy and insured as public programs fall short.
Onshoring the nation’s medical manufacturing
The recently passed law is a “grand slam” for domestic medical manufacturers, according to Eric Axel, executive director of the American Medical Manufacturers Association.
The legislation includes new funding and policy direction for the strategic national stockpile, a domestic reserve of personal protective equipment and other critical medical supplies. It also features new tax incentives for capital investment, research and development, and domestic production, which Axel believes will help level the playing field with heavily subsidized foreign competitors.
These competitors, of which China is the most notable, receive extensive government support, infrastructure and tax advantages — perks that stateside manufacturers have historically gone without, he said.
With the passage of this law, U.S. manufacturers can immediately write off the cost of new machinery and facilities, as well as deduct research and development expenses in the same tax year instead of spreading them over 15 years, Axel explained.
The law also eliminates the federal tax on overtime pay, which will help companies ramp up manufacturing during surges in demand.
“If you offer overtime, a lot of times, workers wouldn’t take it. They would say, ‘Oh, I’m going to just pay it in taxes, or it’s going to dump me into another tax bracket.’ So no taxes on overtime for hourly workers in these sectors — it’s a big deal. They will be willing to take more shifts, they can earn more money, and they can keep the money in their pocket,” Axel remarked.
From his perspective, the One Big Beautiful Bill Act signals a long-overdue federal commitment to rebuilding the nation’s medical manufacturing base.
Pharma sees some wins
Companies in the pharma world are getting tax breaks, too, noted Ahmed Elsayyad, president and co-founder of Ostro, which sells engagement technology to life sciences companies.
The new law reverses a provision from the 2017 Tax Cuts and Jobs Act that required domestic pharmaceutical companies’ costs to be amortized over five years. Now, pharma and biotech companies can fully expense their domestic research and development costs in the year they are incurred.
This change is especially beneficial for early-stage biotech companies, Elsayyad pointed out.
“In the early days of R&D, you don’t have any cash flow at all. For emerging biotech companies, being able to make sure that you’re expensing all of your R&D costs is huge because it allows those companies to have more liquidity for investment into things like pipeline development and accelerating innovation timelines,” he declared
The law also permanently exempts any drug with at least one orphan designation from FDA — meaning it treats a rare disease affecting fewer than 200,000 people in the country — from CMS’ drug price negotiation program. Rare disease companies could view this as a big win, as this change protects their drugs from government price-setting pressures, Elsayyad said.
While the One Big Beautiful Bill Act largely disappoints on the healthcare front, these few bright spots for various stakeholders across the sector offer a glimpse of potential progress amid a landscape that is otherwise exceedingly challenging.
Photo: MANDEL NGAN/AFP via Getty Images
