By Sabrina Corlette, Karen Davenport, and Stacey Pogue
In his first presidential campaign, candidate Trump promised to repeal the Affordable Care Act (ACA). He spent 2017 trying to do just that, until the effort was defeated on the Senate floor via the now-famous “thumbs down” from Senator John McCain. The GOP then suffered a major defeat in the 2018 congressional elections, in large part thanks to their efforts to repeal the newly popular ACA.
Fast-forward seven years, and the ACA is more popular than ever. Over 24 million people enrolled in the ACA Marketplaces in 2025—twice the number who enrolled in 2017—thanks in large part to the enhanced premium tax credits Congress authorized in 2021 to make Marketplace coverage more affordable. Over 20 million people also have insurance via the law’s expansion of Medicaid eligibility. The result has been the nation’s lowest uninsured rate in history.
After a rocky start in 2014, the ACA Marketplaces are stable and vibrant, with high levels of insurer participation and a plethora of plan choices. They cover early retirees, gig economy workers, small business owners, self-employed entrepreneurs, and millions more who work hard but whose employers don’t provide health insurance. But this has not deterred President Trump and some in Congress from what appears to be their ultimate goal of repealing “Obamacare.” They are just finding more subtle ways to do it. The reconciliation bill now heading to the House floor is a key part of that strategy.
The Big Picture: Coordinated Legislative and Regulatory Tactics to Roll Back the ACA
The massive reconciliation bill pending before Congress includes numerous provisions that will lead to millions losing ACA insurance coverage, and increased paperwork and higher costs for those who try to remain insured. Less well known is that, prior to this legislative activity, the Trump administration has taken steps to limit access to low-cost Marketplace plans through a draft regulation (called the “Marketplace Integrity” rule) and a 90 percent reduction in funding for ACA Navigators, individuals who help consumers learn about and enroll in Marketplace coverage. Also, Congress has yet to extend the enhanced premium tax credits, due to expire at the end of 2025. The Congressional Budget Office (CBO) has broken down the coverage losses between 2025 and 2034 as follows:
- 7.7 million more people uninsured from the Medicaid cuts in the Energy & Commerce Committee’s reconciliation bill.
- 1.8 million more people uninsured from adoption of the Marketplace Integrity rule (also in the House reconciliation bill).
- 4.2 million more people uninsured if Congress fails to extend the enhanced premium tax credits.
CBO continues to crunch the numbers on the Medicaid and Marketplace provisions of the reconciliation package, and it is likely that the Ways & Means package will increase the numbers of those losing coverage. The combined cut in funding across Medicaid and Marketplace is likely to approach $1 trillion. Whatever the total number, it is evident that the overall result will be an unprecedented loss of insurance coverage for millions of Americans, causing the nation’s uninsured rate to increase by an estimated 30 percent.
CBO has also not assessed the effect of these provisions on the stability of the ACA Marketplaces. But it doesn’t take green eyeshades to know that changes that make it harder to enroll in and keep health insurance deters healthy people from enrolling in Marketplace health plans, while people with high medical costs will persevere through these hurdles. This will result in a smaller, sicker pool of enrollees. Insurers will need to raise their premiums to account for a more costly group of people; some may choose to exit the market entirely (as the company Aetna recently decided to do, thanks to the current uncertainty over federal ACA policy).
Breaking It Down: Reconciliation Bills Reverse ACA Coverage Gains and Impose New Costs, Red Tape on Marketplace Enrollees
The ACA’s Medicaid expansion faces the biggest hit—whether counted in dollars or individuals losing coverage—under the GOP’s tax package, as our colleagues at Georgetown University’s Center for Children & Families (CCF) have described here. But the proposals to limit eligibility for Marketplace premium tax credits would also cut millions of hard-working, eligible people off of affordable health insurance, impose new and burdensome paperwork requirements on Marketplace consumers, and increase costs for anyone with commercial health insurance, including those with employer-based coverage. Let’s break it down:
Energy & Commerce Committee Package: Cuts in Coverage, Increased Costs for Private Health Insurance
The E&C bill cuts $715 billion from Medicaid and Marketplace coverage, including through Medicaid “work requirements” as outlined by our CCF colleagues here. It also extends those work requirements to the Marketplaces, by denying eligibility for premium tax credits to anyone who is kicked off Medicaid because of a work requirement. Denying affordable coverage to such people is cruel in its absurdity. Families must have at least some income (a minimum of $15,650/year for an individual, $26,650 for a family of 3) to qualify for premium tax credits, so anyone who qualifies is in a working household. This means that if they were disqualified from Medicaid because of a work requirement, yet have sufficient income to qualify for Marketplace coverage, it’s not because they weren’t working, it’s because they couldn’t navigate the red tape required to prove they were working.
The E&C bill also would put into statute the provisions of the Trump Administration’s Marketplace Integrity draft rule. These provisions raise enrollee costs and limit access to coverage by:
- Modifying the formula for determining an individual or family’s premiums and cost-sharing such that:
- Allowing insurers to reduce the generosity of their plans, so that they could cover as little as 66% of costs but still be called a “Silver” plan, even though the ACA requires such plans to cover 70% of costs. This provision allows the bill sponsors to say they are “reducing” premiums, even though they’re doing so mainly by making coverage skimpier.
- Reducing open enrollment periods for all Marketplaces, including state-based Marketplaces (SBMs) from 76 to just 44 days.
- Imposing a $5-month premium penalty on certain low-income enrollees, even though they are eligible for $0 premium coverage.
- Taking away SBMs’ traditional authority to establish special enrollment periods (SEP) to meet the needs of their consumers and markets. The bill would prohibit all Marketplaces from establishing a SEP based on income, eliminating a key pathway for low-income people to access coverage as soon as they learn they are eligible.
- Requiring people enrolling in a SEP to manually submit additional paperwork proving their eligibility before they can get coverage.
- Requiring Marketplaces to deny premium tax credits to people when the IRS doesn’t have a record of them filing the correct tax form. In particularly Kakfa-esque fashion, the Marketplaces are prohibited from informing people why their premium tax credits are being cut off, and the cuts in IRS staffing mean it will be difficult for people to access taxpayer assistance.
- Requiring 2.5 million more people to manually submit documents to prove their income, and shorten the amount of time they have to provide that documentation. This new requirement will be imposed after the federal government has eliminated the jobs of hundreds of Marketplace caseworkers, meaning consumers won’t get the help they’ll need to cut through the red tape.
In addition to the above provisions, the bill would eliminate insurance companies’ flexibility to allow people to maintain coverage if they underpay their premiums by a nominal amount, and allow insurers to deny people coverage if they have unrelated past debt with the insurer. The bill would also prohibit insurers from covering treatment for gender dysphoria as part of the ACA’s essential health benefits package, and would terminate coverage for thousands of people with “Deferred Action for Childhood Arrivals” (DACA) status.
Ways & Means Committee Package: Doubling Down on Coverage Loss and Excess Paperwork
The Ways & Means bill includes several provisions limiting eligibility for affordable Marketplace coverage and adding significant new paperwork for those seeking to enroll in or renew their coverage. These provisions make almost $219 billion in cuts to Marketplace coverage by making more difficult for people to get and maintain health insurance. Some of the provisions in the Ways & Means package overlap with those in the E&C bill (often in confusing ways). But the Ways & Means bill goes much further by:
- Barring most lawfully present immigrants from eligibility for Marketplace premium tax credits. These include legally present refugees, people granted asylum, and others with legal humanitarian status who have fled violence and oppression to work, live, and pay taxes in the U.S.
- Imposing onerous new paperwork requirements on all Marketplace applicants. All Marketplaces, including SBMs, would need to demand additional paperwork from people seeking to enroll. This provision would effectively prohibit automatic re-enrollment in the Marketplaces, a longstanding industry practice across all lines of insurance, including for employer-based coverage. All consumers, whether new or returning, would be required to pay full price until they actively verify, and the Marketplace has confirmed, specific eligibility requirements. If they cannot pay full price, coverage would be cancelled or terminated, leaving them uninsured for a full year until the next open enrollment period.
- Imposing significant new tax burdens on low-income Marketplace enrollees by requiring them to repay premium tax credits if they under-estimate their income. Currently, Marketplace enrollees must pay back to the IRS excess premium tax credits they received in the prior year, if it turns out their income was higher than they had projected. But federal rules cap the amount that low-income people must pay back to help insulate them from unexpected financial hardship at tax time. The Ways & Means bill would end this policy.
Confoundingly, while the reconciliation package turns the Marketplaces into an inhospitable place for consumers and insurance companies alike, it simultaneously hands employers a new incentive to dump their group health plans and send workers to the Marketplace for coverage. The Ways & Means bill expands on a 2019 regulation creating “Individual Coverage Health Reimbursement Arrangements” (ICHRA). Under that rule, employers can choose to contribute to the ICHRA in lieu of offering a group health plan. Employees can use their ICHRA to help purchase ACA-compliant individual market insurance. However, employers’ interest in ICHRAs has, to date, been modest.
The Ways & Means bill re-names ICHRAs “CHOICE Arrangements,” and offers employers almost $500 million in tax credits to replace their group plan with employee CHOICE arrangements. The bill would enable workers to use those CHOICE arrangements to purchase a Marketplace plan. Many employers, particularly if we enter a recession, will be attracted by the option to shift the financial risk of rising health care costs to their workers. However, those workers are likely to find fewer and less affordable plan choices if the Marketplace changes described above are enacted.
Looking Ahead
The full House is expected to vote on the combined reconciliation bill in just a few weeks; from there it will go to the Senate. Separately, the Trump administration will soon finalize its Marketplace Integrity rule. Taken together, these legislative and regulatory proposals will strangle the Marketplaces by stripping them of enrollees and affordable plan choices. They amount to an effective repeal of the ACA for the millions of Americans who will be left uninsured and the millions more paying more for their health care.
