Health insurance could be costly for Texans during Trump presidency. A policy expert explains why

Health policy experts suggest that two million Texans who currently have health insurance through the Affordable Care Act could possibly be at risk of losing coverage if incoming President Donald Trump institutes reform.

The health law’s tax credit subsidies, which were expanded by the Biden administration and cut premiums in half for millions of people, are scheduled to expire in 2025.

During the COVID-19 pandemic, Congress authorized the extension of premium tax credits to help people purchase health insurance. According to the Urban Institute and the Robert Wood Johnson Foundation, the Inflation Reduction Act of August 2022 extended the tax credits to the end of 2025.

Republican leaders suggest that Trump will prioritize healthcare reform, including the ACA, during his presidency, NBC News reported.

Republicans now control both the House and the Senate and maintain their support for Trump’s reform plans.

Trump has claimed that the Affordable Care Act is too expensive. In 2017, then-President Trump unsuccessfully attempted to eliminate its tax credit subsidies. During a September presidential debate with Democratic candidate Kamala Harris, Trump claimed that he had “concepts of a plan” to replace it.

According to the Congressional Budget Office, it might cost about $335 billion over the next 10 years to permanently extend the enhanced ACA tax credits.

Health policy experts say without Congress acting to extend them, these enhanced tax credits will disappear.

The Star-Telegram spoke with Blake Hutson, director of public affairs for the Texas Association of Health Plans, about how Texans could be impacted if the ACA expires.

Star-Telegram: Can you give some background on the Affordable Care Act and explain what exactly is expiring?

Hutson: A big part of the preface for the ACA was to create this healthcare.gov marketplace so people who don’t get coverage at work could go on there and buy it, and they would get tax credits to help make the cost of that coverage more affordable. And that’s what happened when it was launched in 2014, but the monthly insurance premiums for middle-class families were still pretty expensive. In 2021, the Biden administration dramatically increased those premium tax credits, and that made coverage for a whole bunch more people more affordable. So the estimate is that when people shop for coverage, 90 percent find a plan that only costs $10 a month. Before that, it was much more expensive. So the increased premium tax credits expire at the end of 2025. That means it will roll back to what it was prior to those tax credits being increased.

Star-Telegram:What did the marketplace in Texas look like before those increased tax credits, and how much were people paying?

Huston: There were little over 1 million Texans insured in the market, and now there are about three and a half million, so we’ve had a dramatic increase. That little over 1 million was steady for several years, but in the last four years, enrollment has tripled, and it’s all because of these enhanced tax credits. For example, last year, when people bought coverage in the marketplace, they were only paying about $60 or so per month for insurance. Before those increased premiums they were paying double that and that’s just for a single person, a family would be much more.

Star-Telegram:How will people and the marketplace be impacted if the enhanced tax credits expire?

Hutson: If they go away, we would expect the number of people getting coverage through the marketplace to drop because it will be more expensive. Again, these are people who don’t have a good coverage option that works, or they don’t qualify for Medicaid or Medicare, so we would expect a couple million of those people to lose coverage because they can’t afford it any longer. The kind of price gouging we’re seeing in healthcare is off the charts right now. So it’s kind of a double hit for families when they’re seeing high healthcare prices, and then they have to look at health insurance premium costs each month to also become unaffordable if they don’t have these premium tax credits.

Star-Telegram:You said middle-class families will be impacted the most by this. Does that also include small businesses?

Hutson: Yes, Texas is a really big small-business state, and small businesses are the backbone, but at the same time, small businesses struggle to offer health insurance. So a lot of people who are entrepreneurs or work for small businesses don’t get the coverage at work, so they have to go buy the coverage on their own, which is why they go to healthcare.gov. Before these enhanced tax credits, they would go on there to see what the monthly cost was and it was just unaffordable for a lot of people. The tax credits made it more affordable, so when we think about the people impacted, that’s who we’re talking about right now.

Star-Telegram:How are insurance companies responding to the potential loss of the tax credits?

Hutson: They’re pretty concerned. In the last several years, a lot of insurance companies have come to Texas to offer coverage in that marketplace. So if all of this is undone, then they’ll have to consider what the marketplace will look like and what their role here in Texas will look like. The uninsured rate was hovering around 17 to 18%, and now it’s down to 16 (percent). It’s still a high number, but we’re making progress, so we could lose a lot of gains we’ve made in terms of the number of competitors we have in the marketplace and the number of people getting covered.

Star-Telegram:What can people do to prepare if they are going to be impacted?

Hutson: Right now, it’s open enrollment, so I would say they should go on healthcare.gov and look at their options. See what the cost of coverage looks like now and get enrolled. Next year, the costs could go up, but right now, coverage on the marketplace is very affordable for the majority of people who go there and shop. So, for now, go get coverage and get the healthcare you need.

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