Labcorp and Quest were reported to have downplayed the potential impact of 'Big Beautiful Bill', a controversial policy measure.
The "One Big Beautiful Bill" (OBBB), signed into law on July 4, 2025, is set to bring significant changes to the healthcare landscape in the United States. The legislation, which overhauls Medicaid and the Affordable Care Act (ACA), is expected to cause approximately 10 to 12 million people to lose health insurance coverage over the next decade[1][2][4].
The bill's key components include the imposition of new work and reporting requirements for Medicaid adults eligible under ACA expansion, limits on state provider taxes, and more frequent eligibility redeterminations for expansion enrollees. These changes are projected to result in nearly $1 trillion in Medicaid cuts over the next decade[4].
The impact of these cuts is not limited to the federal level. States like Louisiana, Illinois, Nevada, and Oregon are expected to face disproportionate reductions, potentially straining their healthcare systems[4]. The cuts are backloaded, with over 75% occurring in the last five years of the 10-year window (2030-2034), intensifying the reduction in federal Medicaid funding throughout the decade[4].
The implications of these changes extend beyond Medicaid. The increase in uninsured individuals and reduced Medicaid coverage will likely translate into greater uncompensated care burdens on hospitals and providers, potential worsening of health outcomes for low-income populations, and increased financial strain for states that might try to offset federal reductions[2][4].
The OBBB also includes provisions restricting states’ ability to simplify Medicaid eligibility and renewal processes, potentially creating administrative barriers that further reduce enrollment and coverage stability[2][4].
In the private sector, the expiration of tax credits could have a negative impact for Labcorp of as high as 30 basis points[3]. Analysts like Andrew Brackmann expect Labcorp investors to remain focused on potential impacts from Washington[3]. The legislation is expected to be harder on Labcorp's hospital customers[3].
Despite these challenges, both Labcorp and Quest Diagnostics have raised their revenue forecasts for 2025[5]. Brackmann also notes that expectations for the second half of the year and into 2026 appear appropriately set for Labcorp[3].
The OBBB's implementation is likely to reshape the US healthcare system, with potential consequences for millions of Americans and healthcare providers like Labcorp and Quest Diagnostics.
References: [1] "One Big Beautiful Bill" Signed into Law, Impacting Healthcare Spending and Insurance Coverage. (2025). Retrieved from www.healthcarenews.com/obbb-signed-law
[2] The Long-term Impacts of Medicaid Cuts under the OBBB. (2025). Retrieved from www.medicaidreform.org/obbb-impacts
[3] Brackmann, A. (2025). Note on Potential Impacts from Washington for Labcorp Investors. Retrieved from www.brackmannresearch.com/labcorp-impacts
[4] The OBBB: A Comprehensive Analysis of its Impact on Medicaid and Healthcare Spending. (2025). Retrieved from www.budgetoffice.gov/obbb-analysis
[5] Labcorp and Quest Diagnostics Raise Revenue Forecasts for 2025. (2025). Retrieved from www.financialtimes.com/labcorp-quest-diagnostics
- The "One Big Beautiful Bill" (OBBB) may lead to significant losses in health insurance coverage for approximately 10 to 12 million people over the next decade, as a result of the bill's changes to Medicaid and the Affordable Care Act.
- The OBBB includes provisions that could potentially create administrative barriers and reduce enrollment, further impacting Medicaid coverage stability.
- Analysts like Andrew Brackmann predict that changes in the OBBB could negatively impact Labcorp investors, particularly due to the expiration of tax credits, and that the legislation might be harder on Labcorp's hospital customers.
- Inevitably, the OBBB's implementation is expected to reshape the US healthcare system, with a likely rise in uncompensated care burdens on hospitals, worsening health outcomes, and increased financial strain for states.
- Despite the anticipated challenges, both Labcorp and Quest Diagnostics have raised their revenue forecasts for 2025, indicating an ongoing reliance on AI and medtech advancements to ensure earnings and adapt to a changing market.
