For Rhonda Smith, executive director of the California Black Heath Network, July 4, 2025, was not a day for fireworks, but for alarm bells.

On Independence Day, President Trump signed HR 1, sweeping federal legislation that in addition to cutting taxes significantly for the wealthiest Americans also ended billions of dollars in enhanced subsidies for health insurance for which millions of poor, working and middle-class citizens nationwide used to afford medical care.

The cuts took effect Jan. 1.

“Now we’re seeing premiums escalate because the subsidies are disappearing,” Smith said. “And someone can go from paying $60 a month under Covered California [the state’s private insurance marketplace] paying with the subsidies to now maybe $600 or $900 a month premium, depending on their family situation. So when we talk about, not only accessibility and availability, but affordability, HR 1 one has changed all of that.”

The original tax credits to help people pay for medical insurance and care were introduced in 2010 with the passage of the landmark Affordable Care Act (aka Obamacare). They were bolstered in 2021 to offset the economic damage of the COVID pandemic and extended through the end of 2025 by the Inflation Reduction Act.

These enhanced credits significantly boosted financial assistance for enrollees already eligible for the ACA marketplace. Crucially, they also expanded eligibility to include middle-income enrollees whose income exceeded 400% of the federal poverty guidelines.

Since their implementation, marketplace enrollment surged from approximately 11 million to more than 24 million people — more than doubling, according to an article by KFF, formerly Kaiser Family Foundation. The vast majority of these new enrollees relied on the enhanced premium tax credits.

While some will still qualify for a reduced tax credit, others will lose their eligibility entirely, resulting in a “double whammy” of losing their entire tax credit while facing rising premiums.

Headquartered in Sacramento, California Black Health Network is the only Black-led, statewide organization dedicated to advancing health equity for African Americans and Black immigrants. CBHN conducts outreach, education, and advocates for solutions to issues that lie at the intersection of racial, social, economic, and environmental justice.

Those issues are inextricably linked, said Smith and other health care advocates.

Numerous academic studies confirm a strong cyclical link between poverty and lack of health care access, showing poverty leads to poorer health and care access, while ill-health exacerbates poverty through lost earning and high costs, creating a vicious cycle disproportionately affecting children, minority groups, and low-income populations. Research further shows significant impediments, such as financial cost, lack of comprehensive insurance coverage compromises the quality of care received. These barriers result in poorer patient outcomes, delayed therapeutic intervention, and increased prevalence of chronic diseases.

“We spend the most on health care with worse outcomes compared to other developing countries,” Smith said. “The system was already broken to begin with. And so I think that is part of the reason why we are continuing to see health disparities in Black and brown communities.

“You know, there have been many programs, policies, research projects, money spent, addressing health disparities for the last few decades, but we’re still dealing with the problem.”

Tough Situation Made Worse

HR 1, dubbed the “One Big Beautiful Bill” by its mostly Republican congressional sponsors, has cut nearly $1 trillion from Medicaid and its California cousin Medi-Cal, both of which fund health care for low-income people.

“These two federal changes are happening in the context of … a health care affordability crisis in this state,” said Kristof Stremikis, director of market analysis and insights at the California Health Care Foundation. “That is a crisis for Black Californians. It’s a crisis for Asian Californians. It’s a crisis for white Californians. It’s a crisis for everybody here in this state.”

Even before passage of the “Big Beautiful Bill” and the subsidies cut, California Health Care Foundation data revealed that half of eligible Californians were skipping health care due to cost, Stremikis said. “Every other person in this state didn’t go to the doctor when they were sick because they thought it was going to cost too much.

“They didn’t fill a prescription. They’re cutting bills in half. They may be not doing a test or a treatment that their doctor is recommending because it costs too much. That was the situation before any of these developments at the federal level and these federal developments are only going to make that situation worse.”

In a 2024 foundation survey Californians were asked how worried they were about being able to afford basic living expenses and health care costs. About two thirds of Californians say they are “very” or “somewhat” worried about being able to afford unexpected medical bills and out-of-pocket costs. The only item Californians expressed more worry about was gasoline or other transportation costs. More than half of Californians are “very” or “somewhat” worried about being able to afford care for aging or disabled family members (58%), monthly health insurance premiums (55%), and prescription drug costs (53%). More than half of Californians also say they are “very” or “somewhat” worried about various costs not related to health care: 56% for rent or mortgage, 59% for food or groceries and for monthly utilities such as electricity or heat.

Since 2000, the price of medical care, including services provided as well as insurance, drugs, and medical equipment, has increased by 121.3%, according to a joint report by health policy advocates Peterson-KFF. In contrast, prices for all consumer goods and services rose by 86.1% in the same period.

Billions In Subsidies Vanish

Medi-Cal covers more than half the state’s children, 2.2 million seniors and people with disabilities, 1 in 5 working Californians, and millions of other people with low incomes. HR 1 is expected to cut $30 billion a year in federal funding from Medi-Cal, reducing overall access to care and possibly pushing some safety net providers into dire straits, according to the California Budget and Policy Center. Up to 3.4 million state residents could lose coverage, the center said. As the uninsured population rises, more medical bills will go unpaid, cutting revenue for California’s health care safety net.

Almost 2 million Californians were enrolled in 2025 in health coverage through Covered California, the state marketplace that partners with private insurers offering health care policies. Nearly 90% of Covered California enrollees received some level of financial assistance, but that, too, will be reduced. Covered California was created in 2010 after passage of the ACA.

Covered California enrollees are losing $2.5 billion in federal subsidies that weren’t renewed by the end of 2025.

Covered California enrollee Ocea Johnson, 64, of Sacramento suffers from osteoporosis and high blood pressure, both revealed during a preventative care exam. She lives with her two adult sons to save money due to the rising cost of living. A retired custodian, she is now an in-home caregiver. She also cares for one of her sons who is disabled. Johnson became a member of Covered California when she retired. She wasn’t yet eligible for Medicare and without a Covered California plan, she’d be responsible for the full $700 premium out of pocket. She said she will switch her plan to Medicare in April once she turns 65.

“Everybody is struggling one way or another — housing, medical, food,” Johnson said in a statement provided by Covered California. “Covered California has really been a good thing for me. Especially with all of the medical premiums changing every year.

“The premium increases have affected me dramatically. I’m living with my two boys now because we all need help. The premiums going up is not good, especially when the cost of living keeps going up. When I signed up my premium started at $42.05, then it went up to $152. Now it’s up to $361. I couldn’t afford to eat. My friends were giving me their meals [from charity programs] that they didn’t want so I could eat.”

‘We’re Already At Bare Bones’

Felicia Ford has been through the fire. Literally.

A single mom and director of a nonprofit advocating for families with special needs children, Ford and her family were among scores left homeless a year ago when the Eaton Fire swept through communities in the foothills of the San Gabriel Mountains in Los Angeles County. At least 19 people were killed and more than 9,000 buildings were destroyed, including Ford’s Altadena home. She now rents a home in a nearby community as she awaits compensation from her home insurance company to rebuild.

Ford is on Medi-Cal, the state’s Medicaid program, providing free or low-cost health coverage for low-income residents like children, families, seniors, people with disabilities, and pregnant women. It covers doctor visits, hospital stays, prescriptions, dental, vision, and mental health services. Financed by state and federal funds, it offers comprehensive benefits to eligible Californians who meet income and resource requirements.

Far from perfect, with restrictions from which medical providers can be seen to which medications for whatever ails you can be purchased, Ford said Medi-Cal has been hampered even further by the financial cuts at the federal level.

“So we’re already at bare bones. I can’t imagine what things are gonna look like when they cut back even further,” she said. So she looks around metropolitan Los Angeles for the best care at the best price. She searches for supplemental insurance from the most surprising places such as Amazon.

“Like, I don’t know what I’m going to do because on the open marketplace, for even the same level of care we had prior to this “Big Beautiful Bill” thing, I would have probably paid about $3,500 a month. That’s rent.”

Health advocacy organizations — local, state and national — collaborate, share information and lobby elected representatives to improve the health care system. Some municipalities are backing their residents with unique financial programs. Los Angeles County, for instance, purchased $363 million in medical debt that was burdening its residents.

“Look, I think this is a problem that’s very complicated. And so I think overall, the most important thing to remember is everyone needs to participate in the solution here,” said Stremikis of the California Health Care Foundation. “We need to hear from consumers about what their pain points are. We need our state and federal regulators and participant policymakers to address affordability issues. And we need the [health care] industry to be involved here. Like, no one actor or part of the health care system is solely responsible for the affordability challenges. But everyone is responsible for the solution here.”

In the meantime, Ford’s advice is even more stark:

“Yeah, stay healthy. That’s my recommendation.”

This article is part of a national initiative exploring how geography, policy, and local conditions influence access to opportunity. Find more stories at economicopportunitylab.com/