Big Beautiful Bill Looks To Reverse Affordable Care Act Coverage Gains

Forbes

5 hours ago

The House budget reconciliation bill, dubbed the 'One Big Beautiful Bill Act,' includes large cuts in Medicaid spending that could lead to millions of newly uninsured individuals if the legislation passes in the Senate. The proposed law also contains provisions that alter the Affordable Care Act exchange landscape, potentially leading to millions more uninsured. The Congressional Budget Office estimates that at least five million current marketplace enrollees would lose coverage by 2034. The nonpartisan and policy research firm KFF says the number of people with marketplace plans could shrink even more, by around eight million.
Changes in the ACA marketplace would make coverage more expensive, as enhanced tax credits expire, and harder to obtain as open enrollment windows shorten, the paperwork burden for beneficiaries increases and automatic re-enrollment ends. Americans who purchase health coverage through the ACA marketplace exchanges could also soon face higher out-of-pocket maximums in their coverage plans, which means higher cost-sharing.
The United States Treasury Department announced in Sept. 2024 that almost 50 million people have obtained healthcare coverage through marketplace exchanges created by the ACA since its enactment more than a decade ago. The Department data show that one in seven Americans have been or are covered by the law. And between President Biden's inauguration in Jan. 2021 and Sept. 2024, 18.2 million Americans got ACA coverage for the first time.
Rising enrollment since 2021 has been driven by an expansion under the Biden Administration of premium tax credits to include individuals and families with household incomes up to 400% of the federal poverty level, which equates to $58,000 for a single person and $120,000 for a family of four.
Republican lawmakers in both the House and Senate, in concert with the Trump administration, are now looking to reverse some of those gains.
The ACA has gone through a tumultuous history since it was signed in 2010. The law has faced repeated calls for repeal by Republicans. For several years following its passage it wasn't a particularly well-liked piece of legislation, Yet the ACA is now more popular than ever, with over 60% of the public having a favorable view of the law, according to KFF.
The ACA is a comprehensive reform bill, passed by Congress in 2010, that increases health insurance coverage for the uninsured and implements a wide range of reforms to the health insurance market as well as an expansion of Medicaid, the public insurance program that provides health coverage to low-income families and individuals. Importantly, under the ACA, individuals who may have been uninsured due to preexisting conditions or limited finances can secure affordable health plans through the health insurance marketplaces established by the law. The demographics of people on Medicaid are fairly similar to those enrolled in ACA plans.
The legislation has its critics. They point to certain flaws in design and implementation, Indeed, in the early years under the Obama Administration, insurers exited in droves and premiums rates increased substantially.
Under the first Trump administration, ACA enrollment fell overall while numbers of uninsured rose by more than two million. Following unsuccessful efforts to scuttle the ACA, the president issued executive orders to 'improve ACA market dynamics.' ACA exchanges did stabilize in the latter half of Trump's first term as insurers returned and the rate of premium growth decreased.
When Biden assumed office, his administration sought to enlarge the ACA program and counter several of the changes implemented by the first Trump administration that had shrunk its size. The Biden administration was largely successful in terms of increasing the number of people who signed up in the ACA exchanges and reducing the percentage of Americans without health insurance.
Troubled times for folks enrolled in the ACA exchanges aren't solely because of possible passage of the budget reconciliation bill. CVS Health announced last month it will pull Aetna out of the ACA marketplace in 2026, leaving about one million people across 17 states searching for new healthcare coverage.
Aetna's withdrawal from the marketplace will mark the second time the carrier stepped away from the ACA exchanges. The company left the ACA marketplace in 2018 and came back in 2022.
Other carriers left the individual health insurance marketplace in 2017 and 2018 amid uncertainty over whether the ACA would be repealed or replaced. While there isn't the same kind of uncertainty now regarding the ACA's survival, disruption is occurring in the space. This could soon lead to more carriers exiting the market.