Republicans in Congress are weighing budget adjustments that could bring significant changes to Medicaid and the Affordable Care Act (ACA). For example, the Energy and Commerce Committee recently revealed a bill which includes work and reporting mandates for some Medicaid enrollees, alongside formalizing certain rules the Trump administration previously proposed concerning the ACA market.
This review of policy comes at a time when substantial losses in health insurance coverage are predicted, particularly if enhancements to premium tax credits in the ACA market are allowed to lapse. These tax credits, which had been reducing premium expenses, are scheduled to end in late 2025.
The Congressional Budget Office (CBO) estimates that these developments could leave 13.7 million individuals uninsured by 2034. This figure stems from several factors:
- About 1.8 million individuals from recently proposed rules associated with the Trump administration.
- Approximately 7.7 million uninsured individuals due to a mixture of Medicaid and other ACA alterations.
- About 4.2 million people who might find themselves without coverage once the enhanced premium tax credits are gone.
The CBO continues its analysis of uninsured rates, anticipating that these estimates could be conservative. Notably, the impact of policies raised by the Ways and Means Committee is not considered in the latest CBO score. The office has indicated that Medicaid and ACA changes in the bill could lead to an additional 8.6 million individuals becoming uninsured, a number that contrasts with the earlier estimates due to certain technical factors.
If enacted, this shift would follow a period where uninsured rates surged by around 30%, particularly after initial success with the ACA.
Medicaid Regulations
Provisions in Subtitle D of the House Energy and Commerce budget settlement suggest that the number of uninsured people could spike to at least 7.7 million in 2023 due to various factors that are tightening Medicaid enrollment. Some of the expected changes include:
- New job and reporting criteria for qualifying Medicaid applicants.
- States required to reassess enrollee eligibility at least biannually, along with added cost-sharing rules.
- A decrease in state willingness to extend ACA benefits since the bill removes previous incentives.
- For states covering immigrant costs regardless of status, the federal matching rates may be diminished.
In addition to these provisions, regulations will also impact all enrollees:
- Delays in new registration processes initiated by the Biden administration until 2035.
- Retroactive coverage changes reducing eligibility review from three months to one, while introducing stricter address verification and eligibility checks.
- Removal of a reasonable timeframe for individuals to clarify their immigrant status in states that offer compensation.
ACA Market Integrity and Affordable Rules Collaboration
The bills from the Energy and Commerce committee are formalizing some changes proposed during the Trump administration around program integrity. The CBO anticipates these adjustments could lead to an additional 1.8 million people uninsured by 2034.
Some of the notable modifications to the market involve:
- Shortened open registration periods: Traditionally lasting from November 1 to January 15, the open enrollment will now end a month earlier.
- Restricting special enrollment periods (SEPs): The new regulations aim to remove annual enrollment chances for those earning up to 150% above the poverty line.
- New $5 fee for certain automatic re-enrollees: Individuals with zero premium costs will need to validate their eligibility, and those benefits will come with additional fees.
- Enhanced documentation requirements for premium tax credit applicants: New rules will require the IRS to validate income through additional documentation.
Enhanced Tax Credit Expiration
The CBO projects that if the ACA’s enhanced tax credits expire, an added 4.2 million individuals could struggle to obtain insurance by 2038. Initially enacted under the American Rescue Plan Act and subsequently extended, these tax credits are slated to finish in 2025. For a family of four, tax credits previously lowered premium costs by an average of $705 annually.
Since 2020, Trump has claimed responsibility for about 88% of the growth seen in market registrations, stating that significant portions of Congressional districts, particularly in Florida, Texas, and Georgia, are currently signed up for plans.
Should these enhanced credits lapse, ACA enrollees could expect their costs to rise by over 75% on average, with certain states seeing expenses double. Those from low-income backgrounds or in states that haven’t expanded Medicaid might experience the steepest increases.
