The US insurance landscape is set for substantial transformation following the enactment of the ‘One Big Beautiful Bill Act’ — an expansive legislative package signed into law in July. The legislation includes significant provisions that will reshape both the health insurance and property and casualty (P&C) insurance sectors. In health insurance, the bill enforces deep cuts to Medicaid funding and restricts access to Affordable Care Act (ACA) marketplace subsidies. Over the next decade, Medicaid will face nearly US$1 trillion in cuts, while new work requirements are expected to lead to a substantial drop in enrolment. Analysts estimate the total uninsured population could rise by 16 million by 2034, reversing more than a decade of gains in healthcare coverage. For ACA users, the bill shortens the annual open enrolment window and eliminates the enhanced premium subsidies introduced during the pandemic, with some policyholders projected to face premium increases of up to 75 per cent. Subsidy eligibility verification has also been tightened, raising concerns over delays in coverage activation. Although a US$50 billion fund has been created to support rural hospitals, industry groups have warned this may fall short of offsetting the broader impact. On the P&C side, insurers and their clients will benefit from a renewed suite of tax and investment incentives. Notably, 100 per cent bonus depreciation has been reinstated for qualifying property investments placed in service between 2025 and 2030, while the cap for Section 179 expensing rises to US$2.5 million. These changes are expected to improve liquidity for businesses and encourage reinvestment in assets, creating opportunities for insurers to expand coverage portfolios. Other updates affecting the P&C space include modifications to casualty loss deduction rules, as well as the extension—though eventual phase-out—of certain energy-efficiency tax credits. This may lead to a short-term surge in sustainable construction activity before incentives are withdrawn, affecting the timing and nature of risk exposures across the property insurance market. Beyond the core insurance reforms, the legislation introduces several new tax deductions for individual taxpayers, including relief on tips, overtime, car loan interest and an expanded standard deduction for seniors.
