Health coverage for more than 13M could be in jeopardy if subsidies cut

Millions of Americans could lose their health insurance if Republican-led proposals are successful in scaling back subsidies that enable consumers to buy coverage under the Affordable Care Act.

The Congressional Budget Office estimates that 5.7 Americans could lose their ACA coverage by 2034 over the proposed changes. In addition, proposed changes to Medicaid could lead to 8 million losing coverage over the next decade.

Congressional Republicans are considering two proposals that would negatively impact ACA enrollment.

1. Allowing expanded premium tax credits to expire. The American Rescue Plan Act of 2021 included enhanced marketplace tax credits to enable more Americans, including those in “middle” income brackets to obtain ACA coverage. The Inflation Reduction Act of 2022 extended those enhanced tax credits. But they will expire in 2025 unless Congress acts to keep them. The Inflation Reduction Act increased eligibility for ACA tax credits for those with income above 400% of the federal poverty level – or $128,600 for a household of four. If the expanded premium tax credits expire, people with incomes above 400% of the FPL could experience significant increases in premiums.
2. Finalizing the 2025 Marketplace Integrity and Affordability Rule. The rule revised the standards relating to strengthening income verification processes; modifying eligibility redetermination procedures; removing Deferred Action for Childhood Arrivals recipients from eligibility and enrollment in marketplace and Basic Health Program coverage, and adopting pre-enrollment verification for special enrollment periods.

The CBO report was released as the House Energy and Commerce Committee proposal announced a proposal to force states to revamp or cut Medicaid benefits.

The bill would make millions of dollars in Medicaid spending reductions through policies such as stricter eligibility verification, citizenship checks, tougher screenings on providers who get reimbursements and federal Medicaid funding cuts to states that offer coverage to residents living in the U.S. illegally.

The health provisions also include new work requirements that are expected to lead many people to lose coverage, as well as a new cost-sharing requirement for some beneficiaries in the program, not to exceed 5% of a patient’s income.

The CBO predicted as many as 8 million people could lose Medicaid coverage as a result.

Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.