On July 4, 2025, President Donald Trump signed congressional Republicans’ One Big Beautiful Bill Act (OBBBA) into law – enacting the largest-ever cuts to basic needs programs that support vulnerable Americans in order to fund tax breaks that primarily benefit the ultra-wealthy. On top of the economic uncertainty and rising prices caused by Trump’s regressive economic and trade policies, here are some ways the Trump administration will further raise costs for people in Kentucky.1
How does the OBBBA affect Medicaid and the cost of health care?
- More expensive health insurance: The OBBBA fails to extend enhanced premium tax credits for Affordable Care Act (ACA) marketplace health plans, meaning that more than 22 million people nationwide will likely face significant premium cost increases next year if they choose to stay on their current plan. For example, a 55-year-old earning nearly $63,000 per year in Kentucky will see their annual premium costs increase by at least $3,870 on average.
- Cuts to Medicaid and loss of health insurance coverage: The OBBBA will slash federal Medicaid spending by approximately $1 trillion over the next decade, with the largest reductions stemming from coverage losses due to Medicaid work reporting requirements. The legislation will contribute to the loss of health insurance coverage for approximately 15 million people in the United States because of Medicaid cuts and ACA marketplace changes over the next decade, meaning increased out-of-pocket health care costs for families.
- Increase in uncompensated care costs: Coverage losses will also compound uncompensated health care costs for hospitals and other health care providers in Kentucky by hundreds of millions of dollars over the next decade. In Kentucky, 4 rural hospitals already were at immediate risk of closure before the passage of the OBBBA. The OBBBA’s Medicaid cuts will accelerate this crisis, worsening the financial viability of essential providers.
How does the OBBBA increase food costs for lower-income families?
- Cuts to food assistance and higher grocery costs: The OBBBA enacted the largest cut to the Supplemental Nutrition Assistance Program (SNAP) in history and added more red tape for beneficiaries by enacting harsher paperwork requirements upon receipt of federal guidance in 2025. This puts 50,000 people in Kentucky at immediate risk of losing some of their SNAP benefits, including parents with children ages 14 and older, older workers, veterans, those experiencing homelessness, and youth aging out of foster care. Additionally, it will take away food assistance from an estimated 2,000 legal immigrants, such as refugees and asylees, in Kentucky. This elevates hunger and raises costs of groceries for millions of people at a time when food prices are rising due to Trump’s tariffs, which will strain families’ budgets. The costs of grocery items including bananas and coffee have already risen by more than 5 percent since the start of the year.
- Increased economic risk for SNAP retailers: SNAP cuts will have devastating impacts on local economies. For instance, 540 grocery stores and other SNAP retailers in Kentucky will face increased risk of financial instability due to decreased business from SNAP recipients.
- Job losses and state and local revenue declines: Medicaid and SNAP cuts will cause the loss of an estimated 28,600 jobs in Kentucky in 2029. Kentucky’s state and local governments will also lose an estimated $240 million in tax revenue, squeezing public budgets for vital services such as education and social services.
- Increase in state expenditures: The OBBBA will make most states responsible for paying a portion of SNAP benefit costs for the first time starting as soon as fiscal year 2028. The most recent error rate for Kentucky is 9.11 percent.3 If the error rate is between 8 percent and 10 percent, the cost share for Kentucky would equal an estimated $115 million.4 Additionally, the portion of administrative costs that Kentucky will be required to pay for SNAP will increase by about $49.3 million starting in FY 2027.
How does the OBBBA increase energy costs?
- Higher household electricity costs: The OBBBA terminates federal clean energy investments that boost the supply of American-made energy. This national electricity rate hike will increase electricity costs in Kentucky by an average of $70 per year starting in 2026.
- Increased costs for energy-efficient home improvements: The OBBBA terminates the Energy Efficient Home Improvement Credit at the end of 2025, which means families making energy efficient improvements will pay $2,000 more to replace a heating, ventilation, and air conditioning unit or $1,200 more for upgrades to windows and insulation in their homes next year.
How does the OBBBA increase borrowing costs?
- More expensive student loan payments: The OBBBA limits repayment plan options for new student loan borrowers starting in 2026 and for current student loan borrowers beginning in 2028—forcing new and existing borrowers on income- driven repayment plans in Kentucky to pay an average of $210 and up to $370 more per month, respectively, in student loan payments relative to the previous, more affordable Saving on a Valuable Education (SAVE) plan.
- Higher mortgage costs: For future Kentucky homebuyers, the OBBBA will increase interest on a mortgage for the median single-family home by an average of $340 annually, or approximately $10,150 over a typical 30-year loan in 2030.
- Increased costs for small-business loans: Small-business loan borrowers in Kentucky can expect an increase in costs for a fixed-rate loan by an average of $510 annually in 2030, equivalent to approximately $5,420 over the length of an average fixed-rate loan.
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Written by Amina Khalique, Kennedy Andara, Natalie Baker, Sara Partridge, and Kyle Ross. Cross-posted from the Center for American Progress.
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