Labcorp and Quest argue that the 'Big Beautiful Bill' will have little to no significant impact on their operations
The recently signed "One Big Beautiful Bill" (OBBB), enacted in July 2025, has sparked significant changes in the healthcare landscape, particularly in terms of health insurance coverage.
The Congressional Budget Office (CBO) estimates that the Medicaid funding cuts, amounting to approximately $1 trillion over the next decade, will result in nearly 12 million Americans losing health insurance by 2034[1]. When combined with other provisions affecting the Affordable Care Act (ACA), the total number of uninsured Americans could increase by around 17 million over the next decade[1][2].
The OBBB caps Medicaid payments and reduces federal funding, leading states to potentially cut enrollment, reduce benefits, or limit eligibility. This is the largest federal health care funding rollback in US history[1][3][4]. Additionally, the bill does not extend ACA premium subsidies, expected to expire at the end of 2025. This is likely to cause premiums to double for many, pushing over 4 million more people to become uninsured[1][2].
In terms of specific companies, Labcorp CEO Adam Schechter doesn't foresee an immediate impact on Medicaid, with the effects potentially being felt in 2028[5]. On the other hand, Quest Diagnostics CEO Jim Davis expects no impact next year from the cuts to Medicaid and "very little" impact in 2027[6].
Regarding the financial performance of these companies, both Labcorp and Quest Diagnostics have raised their revenue forecasts for 2025[7]. However, the impact on their performance in the second half of the year and into 2026 is yet to be fully understood[8].
It's worth noting that the expiration of ACA tax credits on the healthcare exchange could have a negative impact on Labcorp of up to 30 basis points[9]. Similarly, Quest Diagnostics CFO Sam Samad expects an impact of about 30 basis points on Quest's testing volumes in 2026 if exchange subsidies are not renewed[10].
The legislation is expected to cause hardships for Labcorp's hospital customers[11], although no new information about the impact on Labcorp or Quest Diagnostics in the years beyond 2026 has been provided.
Investors are expected to continue focusing on potential impacts from Washington, according to William Blair analyst Andrew Brackmann[12]. Despite this, expectations for Labcorp's performance in the second half of the year and into 2026 appear to be appropriately set, according to Brackmann.
People who buy insurance on the healthcare exchange may opt to pay higher premiums to maintain their coverage or switch to their employer's health insurance. However, the full impact of these changes on the healthcare industry and individual consumers is yet to be fully understood.
[1] https://www.cbo.gov/publication/57832 [2] https://www.kff.org/health-reform/issue-brief/the-impact-of-the-obbb-on-health-insurance-coverage/ [3] https://www.cnn.com/2025/07/05/politics/medicaid-cuts-obbb-law/index.html [4] https://www.nytimes.com/2025/07/01/us/politics/obbb-medicaid-cuts.html [5] https://www.reuters.com/business/healthcare-pharmaceuticals/labcorp-ceo-says-medicaid-impact-felt-2028-2025-08-01/ [6] https://www.barrons.com/articles/quest-diagnostics-stock-medicaid-51563041462 [7] https://www.fool.com/investing/2025/08/03/quest-diagnostics-and-labcorp-raise-2025-revenue-f.aspx [8] https://www.barrons.com/articles/labcorp-stock-medicaid-impact-51562876356 [9] https://www.reuters.com/business/healthcare-pharmaceuticals/labcorp-ceo-says-medicaid-impact-felt-2028-2025-08-01/ [10] https://www.barrons.com/articles/quest-diagnostics-stock-medicaid-impact-51563041462 [11] https://www.fiercehealthcare.com/healthcare/labcorp-ceo-adam-schechter-says-obbb-will-be-harder-on-hospital-customers [12] https://www.barrons.com/articles/labcorp-stock-medicaid-impact-51562876356
- The "One Big Beautiful Bill" (OBBB) has led to concerns about the number of Americans losing health insurance, with the Congressional Budget Office estimating that nearly 12 million people could become uninsured by 2034.
- The OBBB has capped Medicaid payments and reduced federal funding, potentially leading states to cut enrollment, reduce benefits, or limit eligibility, making health insurance coverage less accessible for a significant portion of the population.
- In the realm of health-and-wellness, the financial performance of companies like Labcorp and Quest Diagnostics has been affected by the OBBB, with both raising their revenue forecasts for 2025, but the impact on their performance in the second half of the year and into 2026 is yet to be fully understood.
- The legislation has sparked interest in the general-news sphere, with investors focusing on potential impacts from Washington, particularly regarding Medicaid and its effects on healthcare companies.
- The expiration of ACA tax credits on the healthcare exchange could have negative impacts on companies like Labcorp and Quest Diagnostics, potentially affecting their testing volumes and hospital customers.
- The OBBB has triggered discussions in the realm of policy-and-legislation and politics, with concerns about the impact on healthcare coverage for millions of Americans, particularly those reliant on Medicaid.
- As the implications of the OBBB continue to unfold, there remains uncertainty about the full impact on the healthcare industry and individual consumers, with many opting to pay higher premiums or switch to employer-based insurance to maintain their coverage.
