With the Republicans on the sidelines closer to taking control Congress says millions of Americans are at risk of losing enhanced subsidies that currently cover the cost of health insurance purchased on the Affordable Care Act marketplaces, according to industry experts and the Congressional Budget Office.
THE November 5 election gave control of the Senate to Republicans, while control of the House remains in limbo Monday as votes in several critical races continue to be counted. Currently, Democrats are projected to win at least 210 seats in the House of Representatives and Republicans 215 seats, with one party needing 218 seats to gain a majority.
If Republicans take control of Congress, they are widely expected to allow the ACA’s enhanced subsidies to expire at the end of 2025, thereby depriving many people who purchase coverage through the ACA and currently receive these subsidies of this financial assistance, according to the health policy. experts.
The so-called enhanced Affordable Care Act (ACA) subsidies, which lower the cost of health plans for millions of Americans and were passed under the Biden administration, will expire unless lawmakers renew them. During his first term, President-elect Donald Trump supported efforts by Republican lawmakers to repeal the ACA, but has not yet revealed his plans for the program, commonly known as Obamacare, for his second term.
Republican House Speaker Mike Johnson said during a campaign stop last week, just before the Nov. 5 election, that “the ACA is so deeply entrenched that we need reform.” massive to make this work, and we have a lot of ideas on how to do it.” that.”
Who is eligible for enhanced ACA subsidies?
Americans with incomes above 400 percent of the poverty line – those earning just over four times the poverty line, or $103,280 for a family of four – are eligible for enhanced ACA insurance subsidies. They also increase financial aid for those who were already eligible for ACA aid.
KFF, an independent nonprofit focused on health policy, estimates that the subsidies reduced premiums for eligible enrollees by 44 percent, or $705 per year. The organization says that if the tax credit expires, average premiums for subsidized enrollees in 12 states would at least double.
In 2024, of the 21.6 million Americans who signed up for health insurance plans on the ACA marketplaces, 20.1 million received enhanced subsidies, according to the CBO..
People most at risk of losing ACA coverage if enhanced subsidies expire are those who live in states with particularly high health insurance premiums, including in rural areas of the United States. Middle-income households that rely on the enhanced subsidies could see a big increase in coverage. premiums, Cynthia Cox, ACA vice president and policy researcher at KFF, told CBS MoneyWatch.
“They could go from no more than 8.5% of their income to 20% or more,” she said. “I imagine a lot of these people would drop their coverage.”
Without the subsidy enhancement, many middle-income ACA Marketplace enrollees with incomes just above four times poverty would not be able to receive health insurance coverage, according to Cox .
Grants remain for 2025
Louise Norris, health policy analyst at healthinsurance.org, noted that 93% of people who purchase health insurance on the ACA marketplaces receive enhanced subsidies. A big increase in their premiums would cause many of them to drop their coverage, leaving them without insurance, she said.
The CBO estimates that a total of 22.8 million Americans will enroll in ACA marketplace health insurance plans in 2025. The agency expects a sharp decline in enrollment, from 22.8 million to 18.9 million, in 2026 if the subsidies are not renewed. By 2030, enrollment could drop to 15.4 million without the increase in subsidies.
For now, the subsidy enhancements will remain in effect until the end of 2025.
“If people sign up now during open enrollment, their coverage will kick in in January and cover them for the entire year. Their premiums won’t change — they’re good for 2025,” Norris said.
The enhanced grants, which were first passed in 2021 as part of the American Rescue Plan Act, will have been in place for about five years when they expire in 2025, about half the life of the ACA market, Cox said.
Enrollment in ACA plans has roughly doubled since the enhanced subsidies were put in place, she noted, with most of that growth coming from low-income enrollees. “This is a group that you would expect, if they have to start paying higher premiums, to drop their coverage,” she said.
Making the enhanced subsidies permanent would cost $335 billion over 10 years, according to the CBO.
