The big tax bill signed into law by President Donald Trump has won big kudos from national organizations as a win for workers and businesses.
But physical therapist Chris Edmundson said the new law will just aggravate the stress from rising costs that he and other small-business owners have struggled with over the past few years.
Edmundson, who runs eight physical therapy clinics in Colorado and one in Hawaii, called inflation a “national shock to the system.”
“And now this bill. It will put additional pressures on our company,” Edmundson said.
The biggest drawback to Edmundson is the impact on Medicaid and other health care programs. Many of the patients of Integral Physical Therapy are on Medicaid, a joint state-federal program that provides health care for children and people with low incomes and disabilities.
The new law is expected to cut about $1 trillion through 2034 as a result of policy changes to health care programs, including Medicaid. The nonpartisan Congressional Budget Office estimates about 11.8 million American could lose coverage.
Edmundson, who has a doctorate in physical therapy, said he started his company nine years ago with the intention of expanding access for patients covered by Medicaid. “We’ve always prided ourselves on serving that population.”
However, Edmundson expects that the law’s changes in eligibility, more frequent reporting on recipients and work requirements will reduce the Medicaid rolls, leaving people without health care coverage and perhaps decreasing his business.
“People will suffer. That’s the thing that is most troubling,” Edmundson said. “And for us it’s going to lead to less overall patients coming through the door. That will mean there’s a possibility we have to lay people off, possibly providers and support staff.”
Hunter Nelson hears similar concerns from other small-business owners in Colorado. She is the director of the Colorado office of the Small Business Majority, a national organization.
“One third of Medicaid enrollees are connected to a small business. It’s going to impact our small-business owners as well as workers, especially in lower-wage sectors,” Nelson said.
An analysis by the Small Business Majority and Georgetown University found that 57% of small-business owners oppose cuts to Medicaid while only 23% would support cutbacks.
The legislation signed into law on the Fourth of July also allows for the expiration of enhanced premium tax credits for people who buy health care plans through the Affordable Care Act marketplace. A national poll by the Small Business Majority showed that 74% of 504 small businesses surveyed favor extending the credits.
The failure to extend the federal subsidies is expected to drive up premiums on Colorado’s individual health care market by an average of 28% statewide, the Colorado Division of Insurance said. Costs in the western part of the state are projected to jump by over 38% next year.
Last year, about 321,000 people received subsidies for health care insurance on Colorado’s marketplace. The average statewide increase in premiums was 5.6% for 2025, according to the governor’s office.
Nelson said the end of the tax credits means that some Colorado business owners who want to buy health insurance for themselves or their employees won’t be able to. The Small Business Majority and others met with members of Congress while the tax bill was being debated and plan to keep sharing the stories of small business owners.
“We just need to make that message loud and clear. We’re going to see fallout from passage of the bill,” Nelson said.
The fallout could be widespread if Nelson’s fears materialize. A 2024 state report said the roughly 715,000 businesses classified as small comprised 99.5% of all Colorado businesses and employed about 1.1 million people.
In contrast to the Small Business Majority, the U.S. Chamber of Commerce praised the new law, saying that a competitive, pro-growth tax policy “is essential to strengthen the economy and raise wages for workers.”
The National Federation of Independent Business, NFIB, supported the legislation, calling it “one of the most pro-small-business pieces of legislation in recent history.” The law will prevent “a massive tax hike” on more than 33 million business owners and provide a tax cut for most small-business owners, the group said.
One of the victories cited by the NFIB is a provision making a small-business tax deduction permanent. The new law increases the deduction from 20% to 23% for businesses taxed at the individual rather than corporate level.
The Small Business Majority supported a bill to change the deduction by allowing businesses to deduct the first $25,000 in qualified business income from their annual tax obligations. Nelson said 74% of benefits under the current system flow to the wealthiest 5% of the businesses rather than typical Main Street entities.
“It would create more of a bottom-up tax reform structure that would also benefit more of our smaller businesses contributing to and powering our local economies,” Nelson said.
Edmundson said a provision in the tax bill that looks like a positive for his business isn’t all it’s cracked up to be. Under the new law, health care providers are set to get a 2.5% bump in Medicare fees.
“That sounds really great. However, the fee was cut 2.83% in January, so it’s just restoring some of the money they took away,” Edmundson said.
Health care providers have seen cuts in Medicare fees for the last five years, Edmundson said. Medicare is the federal health insurance program for people 65 and older.
Edmundson worries about the effects of new work requirements for Medicaid recipients. Many able-bodied recipients between ages 19 and 64 will have to show they worked, attended school or volunteered for 80 hours per month.
In his practice, Edmundson said therapists work with people who might not qualify as being disabled but have debilitating conditions that make working difficult. He said physical therapy can get people back to work and living their lives without more expensive or intrusive treatments.
“We’re concerned as health care providers that this work requirement is going to preclude some people from completing their rehab,” he said. “Another concern I have is that we have some people — family members, friends of our patients — who stopped working to care for their loved ones and they need to be on Medicaid because of their lack of income.”
New reporting requirements and changes in paperwork will boost the burden on clinic employees, Edmundson added. There’s also criticism that the new requirements are a way to pare the programs by making them harder for people to navigate.
“There’s nothing about this bill or this way of thinking that helps the sort of business that I’m in. It certainly doesn’t help patients,” Edmundson said.
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