Tax cuts in exchange for medical insurance? US legislation may cause tens of millions of people to lose their insurance, and medical insurance stocks plummeted across the board.

A report released recently by the AFL-CIO pointed out that the US healthcare system is highly interconnected, with one link affecting the whole body. The report analysis states that if Congress ultimately passes the tax reform bill proposed by the Republican Party, approximately 179 million Americans who rely on employer-provided health insurance will face premium increases of up to $485 per person per year. According to the latest estimates from the Congressional Budget Office (CBO), the bill will cut federal healthcare subsidies by nearly $800 billion over the next decade. In order to provide tax cuts, the bill also does not intend to extend the subsidy levels of the Affordable Care Act (ACA) plan, which are set to expire at the end of 2025. This lack was also included in the AFL-CIO's evaluation model. Currently, federal healthcare subsidies provide coverage for over 70 million Americans, including approximately one in every five Americans, beneficiaries including low-income individuals, disabled individuals, and elderly individuals eligible for long-term care assistance. If the bill is implemented, the CBO estimates that 7.8 million people will lose Medicaid health insurance coverage. Medicaid is a significant health insurance program funded jointly by the federal and state governments, accounting for approximately 19% of hospital revenue in the United States. Once funding is cut, it will not only affect patient insurance eligibility but also have a significant impact on hospital operations. The CBO also predicts that due to the expiration of ACA subsidies and new regulations that raise eligibility thresholds, 4.2 million people will lose ACA insurance by 2034, and the overall number of uninsured individuals will increase to 16 million. Individuals who lose insurance coverage will turn to emergency rooms and hospitals for uncompensated care that they cannot afford. Federal law requires hospitals to provide emergency services to all patients, regardless of their ability to pay. According to a report released by the Urban Institute and the Robert Wood Johnson Foundation, if Medicaid cuts proceed as planned, the US healthcare system will bear up to $63 billion in additional uncompensated care costs over the next decade. Brett Guthrie, Chairman of the House Energy and Commerce Committee and a Republican from Kentucky, believes that the purpose of the bill is to improve the efficiency of Medicaid, combat fraud and waste, and provide more targeted support for the most vulnerable populations. However, medical experts warn that in the face of growing uncompensated care, hospitals have only two options: either demand higher reimbursement rates from commercial insurance companies, which will further increase enterprise health insurance costs and individual premiums; or if they lack negotiation power, the already meager operating profits of hospitals will be further squeezed. The AFL-CIO report points out that 40% of US hospitals are currently operating at a loss, and if revenue is further restricted, many struggling rural hospitals may be forced to close, leaving many communities dependent on their services in a situation where "there are no doctors to rely on." Even if hospitals do not go bankrupt, reduced income may lead to shorter operating hours, reduced service options, and affect the healthcare experience of all patients. Tom Leibfried, a policy analyst at AFL-CIO, stated, "You may first feel the increase in premiums, but many communities will actually see a real reduction in healthcare access, making it difficult to continue medical services." On Friday, the healthcare insurance sector fell, with Humana (HUM.US) falling 1.55%, UnitedHealth Group Incorporated (UNH.US) falling 1.69%, CVS Health Corporation (CVS.US) falling 0.4%, and Cigna (CI.US) falling 0.02%. Although the initial market reaction was bearish, if the policy is implemented, it may accelerate the differentiation of the health insurance industry in the long term, negatively impacting small and medium-sized health insurance organizations but potentially strengthening the dominant position of leading commercial health insurance giants.