A Yale School of Public Health study, using 2024 spending, coverage, and mortality data, projects that moving the United States to a single-payer universal health system would cut annual health spending by $1.04 trillion -- nearly 20% -- and prevent roughly 114,000 deaths every year.[1] That's a larger figure than the last time Yale researchers ran this analysis: a 2020 study in The Lancet, using older data, put the number at $450 billion and about 68,000 lives.[2] The newer, larger estimate reflects ballooning health expenditures and a widening gap between what commercial insurance and Medicare actually pay for the same care.[1] In the same year that second study came out, Congress moved the opposite direction.
The 2025 federal budget reconciliation law -- Public Law 119-21, signed July 4, 2025 -- cuts an estimated $911 billion from federal Medicaid spending over ten years.[3] Most of the largest changes don't take effect until October 2027 or later, but some landed immediately: the law bars states from creating new provider taxes or raising existing ones, eliminating the specific fiscal tool states have historically used to keep Medicaid funded when their own revenue tightens.[3] Mandatory work requirements for certain enrollees follow by January 1, 2027, and new cost-sharing requirements in expansion states follow by 2028.[4]
Enhanced premium tax credits for Affordable Care Act marketplace plans expired December 31, 2025. Average annual premium payments for subsidized enrollees are projected to more than double, from $888 in 2025 to $1,904 in 2026 -- a 114% increase hitting more than 20 million people.[5] Analysts at the Urban Institute and Commonwealth Fund project the higher premiums will push roughly 4.8 million Americans to drop coverage entirely in 2026.[5] A House bill to extend the subsidies for three years has passed that chamber but remains stalled in the Senate, with no clear timeline for further negotiation.[5] Several state legislatures have moved to create their own replacement subsidies, but state programs can't reach everyone a federal credit would have covered.[5]
Forty-nine states operate under a constitutional or statutory requirement to balance their budgets every year; only Vermont has no formal requirement, and even Vermont's governor submits a balanced budget anyway, as a matter of unbroken practice.[6] The federal government has no equivalent constraint -- the US Constitution contains no balanced-budget provision, and every attempt to add one has failed.[6] That's not a technicality. It means the $911 billion in federal Medicaid cuts and the $1,000-plus jump in ACA premiums aren't landing on a level of government that can simply run a deficit to absorb them, the way Washington just did to create them. A state facing a Medicaid shortfall has exactly three options in-year: cut other spending, raise taxes, or cut the program itself -- and hospital funding, tied to a program states are legally required to balance against, is one of the first places that pressure actually lands.
Why does this matter? Both directions are now on the record in the same calendar year, from credible, independent sources: a peer-reviewed academic estimate that full federalization saves over a trillion dollars and well over 100,000 lives annually, and an actual federal law that cuts $911 billion from the program covering the country's poorest and sickest patients while a separate expiring credit doubles what 20 million people pay out of pocket. Neither of those costs disappears. They move -- from the federal budget to state budgets forced to find replacement revenue with fewer tools to do it, and from state budgets to the hospitals and patients left holding whatever the states can't cover. Two places that pressure is already landing: 700 rural hospitals now at risk of closing, and a rapidly growing share of counties with nowhere to give birth.