While President-elect Donald Trump isn’t likely to attempt to overturn the Affordable Care Act (ACA) as he tried to do during his first term, he is expected to institute or oversee changes to Obamacare and the Health Insurance Marketplace that could have sweeping effects. The biggest of these involves paring subsidies that help consumers pay much lower premiums for ACA plans. Other proposals seek to tackle fraud, make prices more transparent, and provide an alternative to cost-sharing subsidies using health savings accounts.
Millions of people who get expanded subsidies for Marketplace health insurance are on track lose the aid in 2026 because the incoming Congress is unlikely to extend it.
The vast majority of people who enroll in an Obamacare plan during open enrollment for the 2025 plan year will get a subsidy, and 74% will receive premium tax credits so large that their premiums will be $10 or less each month.
These enhanced subsidies were extended under the Inflation Reduction Act during the Biden administration and will expire at the end of 2025 unless Congress acts.
Republicans say the subsidies allow insurers to raise rates without pushback since they mask most of the higher costs for consumers. And expanded tax credits are expensive. They could increase the deficit by $335 billion between 2025 and 2034 if made permanent, according to the Congressional Budget Office (CBO).
However, allowing the expanded subsidies to expire could make Marketplace plans unaffordable to millions of Americans. The number of people enrolled in Obamacare has ballooned to a record high under the Biden administration, with the percentage of uninsured people at a record low of 7.6%. But the CBO estimates that the number of enrollees will drop from 21.3 million to 15.7 million in 2026.
Some Marketplace enrollees with lower incomes now qualify for the cost-sharing reduction (CSR) program, which helps lower out-of-pocket costs for care. A new approach supported by conservative-leaning policy organizations such as Paragon Health Institute would allow those consumers to accept a deposit into a health savings account (HSA) instead. HSAs are tied to high-deductible plans, so the participant would need to be enrolled in one of these.
High-deductible health plans may not be suitable for all consumers—such as those with high spending due to chronic conditions—because they have higher deductibles. But they can be a good fit for healthier, younger people who don’t need to see a doctor or have other medical care often.
Proponents of the HSA option say it would allow beneficiaries to use the funds for a wider range of expenses than a typical health insurance policy covers, such as vision and dental care, fertility treatments, and over-the-counter medications. HSA funds grow tax-free, and people who don’t use the money during the year could save it for health expenses later, so the benefit wouldn’t expire like CSR benefits do every year.
A 2022 study commissioned by Paragon from Milliman found that two out of three participants would be financially better off with the high-deductible plan that comes with an HSA option than with the CSR subsidies.
The approach has already received support from some members of Congress. In 2023, two U.S. Congressmen (Greg Steube, R-FL, and Kat Cammack, R-FL) proposed the ACCESS Act, which integrated this new HSA option.
During his last presidency, President-elect Trump changed the Obama policy of limiting short-term insurance to several months. Under Trump, new rules allowed consumers to buy these non-comprehensive plans for up to one year and renew them for two more years.
Under Biden, September 2024 rules now limit consumer enrollment in one company’s short-term plan to a maximum of four months, including renewals. President-elect Trump will likely change the rules again in 2025.
Short-term health plans don’t have to follow the same rules as other types of insurance, such as covering preexisting conditions and mental health care. Critics say they provide limited, confusing coverage and potentially reduce the number of healthy Marketplace enrollees—which could drive up costs for Marketplace plans.
Proponents of short-term plans say the plans offer coverage and choice to people who might otherwise not have any kind of insurance because the short-term plans can be considerably cheaper than Marketplace plans.
In 2019, Trump issued an executive order that required health care providers and insurers to share expected out-of-pocket costs (copays, coinsurance, and deductibles) for treatments upfront. It also required hospitals to post consumer-friendly cost information.
But enforcement has been a challenge. A November 2024 report found that only 21% of hospitals were in compliance.
Price Waterhouse Cooper expects the next Trump administration to increase price transparency further, encouraging consumers to shop for care, which could boost provider competition and lower prices.
Trump may have wide political support for this effort. A bipartisan bill passed the House of Representatives in late 2023 that provides statutory authority for the rules imposed by Trump’s executive order. It also extends the requirements to labs, ambulatory surgical centers, and imaging service providers that participate in Medicare.
The conservative-leaning Paragon Institute estimates that 5 million people who don’t qualify are enrolled in fully subsidized ACA plans at a cost of $20 billion for taxpayers. It has several ideas for reducing the incentives for fraudulent enrollment.
One is to limit automatic re-enrollment every year for people with Marketplace plans, and end it for those who get fully subsidized plans. Another is to get rid of the Marketplace plan low-income special enrollment period for people with incomes at or below 150% of the federal poverty level. That special enrollment period allows people who qualify for larger subsidies to enroll in a Marketplace plan at any time during the year, rather than just during the annual open enrollment period.
Allowing enhanced subsidies to expire would also disincentivize people from purposely falsifying income estimates when enrolling, according to conservatives. In addition, Paragon recommends raising subsidy recapture limits. Right now, if you underestimate your income for the coming year and you get advance subsidies based on that estimate, you have to pay the government back at tax time. But there are dollar limits to how much you have to repay if your income is below 400% of the federal poverty level. Paragon wants to raise those limits.
Both conservative and liberal-leaning organizations have pointed out a growing issue with unauthorized health insurance enrollment, including brokers boosting commissions by fraudulently enrolling members using inaccurate income or personal information or switching enrollees from one plan to another without their consent.
The Centers for Medicare and Medicaid (CMS) received more than 183,000 complaints that consumers were enrolled without their permission in federally funded Marketplace coverage between January 2024 and August 2024. It suspended 850 agents and brokers suspected of fraudulent enrollments, prohibiting them from participating in Marketplace enrollment. The new administration may ask for more congressional oversight of agents and brokers, and of the enrollment process itself.
ACA navigators provide free help to enrollees when reviewing and applying for available Healthcare.gov plans, using coverage to get health care, and enrolling in or renewing Medicaid and Children’s Health Insurance Program (CHIP) coverage. Funding for the Navigator program has fluctuated depending on the administration in charge.
Under President Obama, the program was awarded $63 million in annual funding, but during the last Trump administration, it was cut to $10 million for 2018–2020. Under the Biden Administration, the funding increased to $80 million in 2022, with another $100 million announced in 2024.
In total, CMS announced an award of $500 million over the next five years. The money primarily goes to nonprofit organizations, trade or professional organizations, community health centers, and others that provide navigators. Navigators must be unbiased and pass training requirements.
Based on Trump’s prior actions, it’s likely that Navigator program expenses will be examined more closely and potentially slashed. One proposal would also more closely track what information navigators are giving people about large subsidies. Consumers seeking help will need to navigate the Marketplace site on their own or reach out to an insurance agent for advice.
Trump nominated Dr. Mehmet Oz to serve as the head of CMS, which oversees programs that include Obamacare and the federal Health Insurance Marketplace. In Congressional confirmation hearings, more will likely be revealed about Dr. Oz’s perspective on Marketplace plans.
Questions may be asked about the policies above and about pending policies, including the Biden administration’s October 2024 proposed ACA rule making over-the-counter and prescribed contraception free for the insured.
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