How Will the "Big, Beautiful Bill" Affect Telehealth Companies?
Telehealth safe-harbor, Medicaid cuts and what telehealth companies should expect
The "One Big Beautiful Bill Act," signed into law on July 4, 2025, is one of the most significant pieces of health and tax legislation in recent years.
While much of the public discussion has focused on tax cuts and federal spending, the bill also brings sweeping changes to health insurance, Medicaid, and telehealth. This article provides a fact-based overview of the bill’s major provisions and what telehealth companies, patients, and providers should expect in the coming years.
Key Changes in the "Big Beautiful Bill" Affecting Telehealth
1. Permanent Telehealth Safe Harbor for High-Deductible Health Plans (HDHPs)
One of the most notable changes is the permanent extension of the telehealth "safe harbor" for HDHPs. During the COVID-19 pandemic, temporary rules allowed HDHPs to cover telehealth services before patients met their deductibles, without jeopardizing Health Savings Account (HSA) eligibility.
This provision had expired, but the new law makes it permanent, retroactive to January 1, 2025. Stinson’s summary of employee benefit provisions and Dykema’s legal alert provide more details.
What this means:
Patients with HDHPs can access telehealth services at low or no cost before meeting their deductible, while still contributing to HSAs.
Telehealth companies may see increased utilization from patients who previously delayed care due to out-of-pocket costs.
Employers and insurers can offer more flexible telehealth benefits without risking HSA compliance.
2. Medicaid Cuts and Their Impact on Telehealth
The bill includes over $1 trillion in Medicaid cuts over the next decade, primarily through new work requirements, changes to provider taxes, and other eligibility restrictions. The Congressional Budget Office (CBO) estimates that these changes could leave nearly 12 million more people uninsured by 2034, with the majority of coverage losses coming from Medicaid. The Washington Post and Crowell’s legal analysis provide in-depth coverage.
What this means:
Patients in low-income and rural areas, who often rely on Medicaid for telehealth access, may lose coverage or face new barriers.
Telehealth providers serving Medicaid populations could see reduced demand and reimbursement, especially in rural communities where telehealth has been a lifeline.
Rural health systems may be particularly vulnerable, though the bill does allocate $50 billion for rural health transformation plans, which could support telehealth infrastructure if states prioritize it (HKLaw).
For a detailed breakdown of state-level impacts, see NASHP’s analysis and Telehealth.org’s coverage.
3. Changes to Marketplace Insurance and Subsidies
The law does not extend the enhanced premium tax credits for Affordable Care Act (ACA) marketplace plans, which are set to expire after 2025. This will likely make marketplace insurance more expensive for millions, with net premiums projected to rise by 25% to 100% depending on income. KFF’s policy watch and Community Solutions’ summary provide further insight.
Additional changes include:
Annual re-enrollment is now required to maintain subsidies, increasing administrative burden for patients.
Special enrollment periods for low-income individuals are more restricted, and some immigrants will lose eligibility for subsidies starting in 2027.
The number of uninsured Americans is expected to rise by up to 17 million due to these and other policy changes (KFF Quick Take).
For telehealth, the potential loss of insurance could have multiple outcomes:
Patients may face higher costs or lose insurance altogether, reducing their ability to access telehealth services.
Telehealth companies could see a contraction in the insured market, especially among lower-income and immigrant populations.
4. Direct Primary Care (DPC) and HSA Flexibility
The bill allows certain direct primary care arrangements to be offered without cost-sharing and without impacting HSA eligibility, provided monthly fees stay below $150 for individuals or $300 for families. HSA funds can now be used to pay for these DPC fees (Newfront).
Impact:
Patients may have more options for primary care, including telehealth-based DPC models.
Telehealth companies offering DPC services could benefit from increased demand and payment flexibility.
What Telehealth Companies Should Expect from the “Big, Beautiful Bill”
Opportunities
Expanded HDHP Telehealth Coverage: The permanent safe harbor is a win for telehealth, making it easier for employers and insurers to offer robust telehealth benefits and for patients to access care affordably.
Potential for Rural Health Investment: The $50 billion rural health fund could support telehealth expansion if states include it in their transformation plans (Spencer Fane).
Insurance to Cash Pay: A potential shift from insurance covered services to cash pay services could bring more affordable options and greater access to treatment typically not covered under insurance.
Challenges
Reduced Medicaid Coverage: Deep Medicaid cuts may shrink the patient base for telehealth providers serving low-income populations, especially in rural areas (The Hill).
Marketplace Instability: Higher premiums and stricter eligibility for ACA plans could reduce the number of insured patients able to pay for telehealth services.
Administrative Complexity: New requirements for annual re-enrollment and documentation may create friction for both patients and providers.
What Patients Should Expect
More Affordable Telehealth (for Some): Those with HDHPs and HSAs will benefit from easier, cheaper access to telehealth.
Coverage Losses (for Others): Medicaid recipients and some marketplace enrollees may lose coverage or face higher costs, making telehealth less accessible.
More Paperwork: Annual re-enrollment and stricter eligibility checks will require patients to be proactive to maintain coverage and subsidies.
Summary of the Major Provisions Affecting Telehealth
Provision | Patient Impact | Telehealth Company Impact |
HDHP Telehealth Safe Harbor (Permanent) | Lower/no-cost telehealth before deductible | Increased utilization, easier plan design |
Medicaid Cuts | Loss of coverage for millions | Reduced demand, especially in rural areas |
ACA Subsidy Expiration | Higher premiums, more uninsured | Smaller insured market |
DPC & HSA Flexibility | More options for primary care | New business models, payment flexibility |
Rural Health Transformation Fund | Potential for improved access | Opportunity for infrastructure investment |
Looking Ahead
The "Big Beautiful Bill" brings both opportunities and challenges for telehealth. While the permanent telehealth safe harbor for HDHPs is a clear positive, deep Medicaid cuts and the expiration of enhanced ACA subsidies threaten to reduce access for millions. Telehealth companies should prepare for a shifting landscape: some patient segments will have improved access, while others may face new barriers.