ACA enrollment Could Plunge in 2026 if Tax Subsidies Expire, Threatening Healthcare Access for Millions
Published: April 17, 2025
Record enrollment in affordable Care Act (ACA) health plans is at risk, with possibly dire consequences for millions of Americans, as congressional Republicans weigh letting crucial tax subsidies expire. This move could trigger a healthcare crisis, leaving many struggling to afford coverage and access essential medical services.
the Looming Threat to ACA Subsidies
The Affordable Care Act, a cornerstone of the U.S.healthcare system since it’s enactment on March 23,2010,faces a critical juncture.Federal health officials reported that as of January 17, 2025, a staggering 24.2 million Americans, including 3.9 million new consumers, had enrolled in ACA health insurance plans. These enrollments were fueled by tax subsidies that substantially reduced monthly premiums.
The potential expiration of these subsidies poses a grave threat. Without them, millions could face skyrocketing premiums, effectively pricing them out of the health insurance market.This would disproportionately affect low- and middle-income families, the self-employed, and those who don’t receive health insurance through their employers – a large segment of the U.S. workforce.
Consider the impact on a family of four in Ohio earning $60,000 a year. Currently, their ACA plan premium might be subsidized, costing them a manageable $400 per month. If the subsidies vanish, that premium could easily double or even triple, placing an unbearable strain on their budget. This scenario is mirrored across the nation, from California to Florida, impacting families and individuals alike.
Historical Context: Challenges to the ACA
The ACA has faced numerous challenges as its inception. The Trump governance, for instance, implemented policies that undermined the law’s functionality. These included notable cuts to funding for navigators (individuals who help people enroll in ACA plans) and shortened enrollment periods, making it more difficult for Americans to access coverage. These actions directly contradicted the stated goal of improving healthcare access. “When they do things like defunding promotions, defunding the navigators and making all kinds of other changes, that’s in their DNA,” Jonathan Cohn, a senior writer for The Bulwark,
said in an interview. If you look in the conservative world today, and you read what the people who advise them on policy write, you’ll see they remain antagonistic to the ACA.
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Moreover, the Trump administration’s actions extended to the Federal Trade Commission (FTC). As Will weissert and Christopher Rugaber reported for the AP,the firings of Democratic FTC members led to a lack of quorum,hindering the commission’s ability to pursue antitrust cases. This had direct implications for ongoing litigation against pharmacy benefit managers (PBMs), powerful entities that play a significant role in determining prescription drug costs.
The PBM Controversy: A key Battleground
The FTC lawsuit against major pbms – CVS Caremark, Cigna’s Express Scripts, and UnitedHealth’s OptumRx – underscores the complexities of the U.S. healthcare system. Ed Silverman reported for STAT that the FTC accused these PBMs of creating a “perverse” system of rebates that inflated the price of insulin. This system allowed PBMs to profit while patients struggled to afford this life-saving medication.
In its case against the PBMs, the FTC accused CVS Caremark, cigna’s Express scripts, and UnitedHealth’s OptumRx of creating a “perverse” system of rebates. Those rebates allowed the PBMs to sell insulin at high list prices to “line their pockets” while patients were forced to pay more for this life-saving medication.
Ed Silverman, STAT
This case highlights a crucial issue: the role of intermediaries in driving up healthcare costs. PBMs,acting as middlemen between drug manufacturers,insurance companies,and pharmacies,have been criticized for a lack of openness and for prioritizing profits over patient affordability. The outcome of this lawsuit could have significant implications for the future of prescription drug pricing in the U.S.
Consider the case of a diabetic patient in Florida who relies on insulin to manage their condition. The list price of their insulin could be hundreds of dollars per vial, even though the actual cost of manufacturing it is indeed significantly lower. The PBM system of rebates and negotiated discounts is often opaque, making it difficult for patients to understand how the final price is determined.
Option Approaches: Strengthening, Not Weakening, the ACA
Instead of dismantling the ACA, many experts argue that Congress and the states should focus on addressing its flaws and strengthening its foundation. A Gallup poll in December 2024 revealed that 54% of U.S. adults approve of the ACA, and 62% believe the federal goverment is responsible for ensuring all Americans have health insurance. This suggests broad public support for a robust healthcare safety net.
One of the ACA’s primary weaknesses lies in its reliance on for-profit health insurance companies. these companies,driven by the need to maximize profits and shareholder value,often prioritize revenue generation over patient care. Chris Stanton, a reporter and editor for New York magazine, has written extensively on this issue.
However, replacing these insurers entirely is a complex undertaking. As one expert noted, the ACA was built upon the existing health insurance framework, making a complete overhaul politically and logistically challenging.
Potential solutions include:
- Strengthening regulations to limit excessive profits and ensure a greater focus on patient needs.
- Implementing a public option to compete with private insurers and drive down costs. This could be modeled after Medicare, offering a government-backed insurance plan that is available to all Americans.
- Expanding Medicaid eligibility to cover more low-income individuals and families.
Consumer Harm: Underinsurance and Financial Burdens
Recent reports from the Commonwealth Fund highlight the significant challenges faced by many Americans, even those with health insurance. These reports reveal that a substantial portion of the insured population is “underinsured,” meaning they have high out-of-pocket costs and deductibles that limit their access to care.
Sara R. Collins, a senior scholar and vice president at the Commonwealth Fund, noted that despite improvements under the ACA, many Americans lack full coverage. There are issues that people have in all commercial plans, including the employer group market, and also in the individual market, where deductibles can be very high. In the ACA plans,if you’re not eligible for a cost-sharing reduction,the copays and deductibles can be very high.
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Specifically,the Commonwealth Fund reports indicated the following:
- Approximately 25% of Americans are underinsured,with a significant number covered by employer-sponsored plans.
- Older adults frequently enough struggle to afford healthcare and may skip necessary medical treatments due to cost concerns.
- Workers at small businesses typically face higher health insurance costs and less financial protection compared to those at larger companies.
These findings underscore the need for complete healthcare reform that addresses not only access to insurance but also affordability and the adequacy of coverage.
| Issue | Impact | Potential Solution |
|---|---|---|
| Expiring ACA Subsidies | Millions could lose coverage due to unaffordable premiums. | Extend or make the subsidies permanent. |
| High Deductibles & Copays | Underinsured individuals delay or forgo necessary care. | Strengthen cost-sharing reductions; implement a public option. |
| PBM Practices | Inflated drug prices; lack of transparency. | Increase regulation; promote transparency; explore alternative pricing models. |
The Road Ahead: A Call for bipartisan Solutions
The future of the ACA and the accessibility of healthcare for millions of Americans hinges on the decisions made by Congress in the coming months.Letting the tax subsidies expire would have devastating consequences, pushing many into the ranks of the uninsured and exacerbating existing healthcare disparities.
A more constructive approach would involve bipartisan efforts to strengthen the ACA, address its flaws, and ensure that all Americans have access to affordable, high-quality healthcare.This requires a commitment to evidence-based policymaking, a willingness to compromise, and a focus on the well-being of all citizens.
the stakes are high. The health and economic security of millions of Americans are on the line.It is time for policymakers to put aside partisan politics and work together to create a healthcare system that truly serves the needs of all.
Resources
- Republican Proposals would Raise Taxes for Enrollees in Affordable Care Act Marketplaces, Center on Budget and Policy Priorities, Feb. 7, 2025.
- More in U.S. See Health Coverage as Government Responsibility. Approval of Affordable Care Act also near high point, Gallup, Dec. 9, 2024.
- From Laggard To Leader: Why Health Care In The United States Is Failing,And How To Fix It,Health Affairs,Jan. 22, 2025.
