President-elect Trump’s 2024 campaign included mixed messages regarding the future of the Affordable Care Act (ACA), also known as Obamacare. However, his first term record suggests significant changes are possible, especially if Republicans maintain control of the House of Representatives. As his administration potentially begins, several changes to the ACA could be on the horizon.
1. The Looming Expiration of Enhanced ACA Subsidies
A critical factor impacting the current ACA landscape is the enhanced subsidies enacted during the Biden administration. These subsidies, designed to reduce premium costs, have been credited with significantly boosting ACA enrollment, particularly in Southern states. Millions benefited from these reduced premiums, some seeing their payments cut nearly in half. However, these enhanced subsidies are scheduled to expire at the end of 2025.
If Congress does not act to extend these subsidies, their disappearance will lead to a substantial increase in net premium payments. Experts predict an average increase of 79%, with some states potentially seeing premiums more than double. The Congressional Budget Office (CBO) estimates that permanently extending these subsidies would cost approximately $335 billion over a decade. Furthermore, the CBO projects a sharp decline in ACA Marketplace enrollment if the subsidies are not renewed, dropping from 22.8 million in 2025 to 18.9 million in 2026, and potentially falling to 15.4 million by 2030. While a renewal might be considered, especially in a lame-duck session, it’s less probable without a Democratically controlled Congress and presidency.
2. House Control: A Decisive Factor in the ACA’s Fate
The extent of changes to the ACA heavily depends on whether Republicans retain control of the House. House Speaker Mike Johnson has suggested that if Republicans maintain control, “massive” reforms to Obamacare could be implemented. Although a full repeal of the ACA was unsuccessful in 2017, Republicans might seek to offset tax cuts by significantly reducing ACA subsidies. They could also pursue substantial funding cuts and changes to Medicaid financing, which would have broad implications beyond just the ACA’s Medicaid expansion.
This approach would echo the 2017 “repeal and replace” efforts. While those attempts largely preserved protections for individuals with pre-existing conditions, they were projected to leave tens of millions without affordable health coverage due to budget reductions. Similar to 2017, changes to ACA and Medicaid funding could be enacted through budget reconciliation, bypassing the need for 60 votes in the Senate and avoiding a filibuster.
3. Regulatory and Legal Challenges: Alternative Avenues for Change
Even if Democrats were to regain control of the House, a Trump administration could still leverage executive actions to alter the ACA. One potential avenue is granting state waivers to provide Republican-led states with greater flexibility. This could involve modifying Marketplace rules or implementing stricter Medicaid eligibility criteria, such as work requirements.
The administration could also use executive authority to adjust ACA regulations. This might include relaxing requirements for non-ACA-compliant health plans that discriminate against individuals with pre-existing conditions, a tactic employed during Trump’s first term. Another possible action is defunding ACA marketing and outreach initiatives, which previously led to decreased enrollment rates. Increased verification requirements for ACA plan enrollment, ostensibly to combat fraud, could also be implemented, potentially making it harder for individuals to sign up. Finally, the administration’s stance on legal challenges to the ACA, whether to support or oppose them, will significantly impact the law’s future. Declining to defend the ACA in court could undermine its legal standing and open the door to further dismantling of the program.
Conclusion
The future of the Affordable Care Act remains uncertain. While complete abolishment might face political hurdles, significant changes are definitely on the table, especially with a Republican-controlled House. From the expiration of enhanced subsidies to legislative and regulatory actions, various pathways exist for Republicans to reshape or dismantle key aspects of Obamacare. The extent of these changes will depend on political will, legislative strategy, and the outcomes of ongoing legal and regulatory processes.
