Why the Affordable Care Act is in real trouble this time


In the leadup to this month’s election, House Speaker Mike Johnson promised that Republicans would make “massive” changes to the Affordable Care Act if they won a government sweep.

With a trifecta now in hand, the party will soon have its chance to make good on that vow.

So far, GOP leaders have been vague about what exactly they might do. During his debate with Vice President Kamala Harris, President-elect Donald Trump notoriously said he had only “concepts of a plan” for how to deal with the health care law, which his party failed to repeal and replace after a grueling, months-long effort during his first term in office.

But there’s at least one key reason to think that this time will turn out differently: A major expansion of the Affordable Care Act’s insurance subsidies passed by the Biden administration is currently set to expire after 2025, which will lead to large premium and deductible increases for many Americans who get their health coverage through the program’s exchanges.

That means Republicans could pare back Obamacare without lifting a finger. But the looming subsidy cliff might also give the party political cover to make broader changes that would otherwise be difficult for more moderate lawmakers to swallow.

Democrats temporarily made Obamacare’s insurance tax credits more generous as part of President Joe Biden’s $1.9 trillion American Rescue Plan. Those changes to the law’s subsidies, which lower the cost of health coverage purchased on federal marketplaces, knocked premiums to zero for many lower-income families while further limiting their out-of-pocket expense. They also for the first time capped the price of insurance for Americans who earn more than 400% of the federal poverty line, equal to $124,800 for a family of four today.

Since then, enrollment on the exchanges has jumped about 80%, from 11.9 million in 2021 to 21.4 million in 2024. Much of that growth came from poorer and moderate-income households, some of whom had previously fallen into the law’s coverage gap because they earned too little to qualify for marketplace subsidies but lived in states that declined to expand Medicaid.

Democrats extended the changes through next year as part of the Inflation Reduction Act, but chose not to make them permanent in order to limit that legislation’s cost. Instead, lawmakers hoped that the beefed up subsidies could be renewed as part of the bigger negotiation over the tax code that’s looming next year, when parts of the 2017 Tax Cuts and Jobs Act are also set to expire.

With Republicans in full control of the White House and Capitol Hill, however, a renewal seems unlikely.



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