12 Days of SSAP: One Big Beautiful Bill’s Impact on Insurance Industry
JLK Rosenberger is carrying on our holiday tradition of taking a new perspective on a holiday classic – the Twelve Days of Christmas. Rather than filling your head with turtle doves and gold rings, we are focusing on the latest changes to SSAP and how they will impact your insurance entity in 2026 and beyond.
Our Day 2 post moves to the One Big Beautiful Bill Act (OB3), which introduced broad tax and spending changes that will influence insurance markets over time. While the law includes no provisions directly aimed at insurers, its effects are expected to emerge gradually across health, life, and P&C sectors. We invite you to read on to see those potential implications.
The introduces broad tax and spending changes that will influence insurance markets over time. While the law includes no provisions directly aimed at insurers, its effects are expected to emerge gradually across health, life, and P&C sectors.
Health Insurers
OB3 includes substantial reductions to Medicaid funding and Affordable Care Act subsidies. These changes are expected to result in fewer insured individuals as eligibility tightens and enrollment processes become more restrictive. Estimates suggest that the number of uninsured individuals could rise materially over the next decade.
For health insurers, this environment may lead to higher member turnover, increased administrative effort, and greater concentration of higher-risk participants. Medicaid managed care plans, in particular, may need to enhance eligibility verification and member engagement processes while reassessing pricing and benefit strategies.
Life Insurers
The legislation significantly increases the estate tax exemption, which may reduce the need for life insurance as an estate liquidity tool for many high-net-worth families. As a result, insurers could see changes in policy retention and product demand.
Potential outcomes include increased life settlement activity, higher lapse rates in certain blocks of business, and growing interest in products focused on income protection or long-term care. Life insurers may want to revisit product design, underwriting assumptions, and reserve strategies in response to these evolving dynamics.
P&C Insurers
OB3 restores full bonus depreciation and raises expensing limits for business investments, which may encourage companies to invest in new property and equipment. This activity could drive increased demand for property and casualty coverage as asset values rise.
At the same time, permanent changes to casualty loss deduction rules, expanded to include certain state-declared disasters, may affect claim behavior and loss patterns. Insurers may need to adjust underwriting models and reserving approaches to reflect these changes.
Bottom Line
Many OB3 provisions will take effect over several years, giving insurers time to evaluate the potential impacts and adjust their strategies. Scenario modeling, tax planning, and proactive communication with policyholders and distribution partners will be key.
