2025 Budget Reconciliation’s Impact on ACA, Medicaid, Uninsured Rate

Congressional Republicans Consider Budget Reconciliation Package

Significant changes to Medicaid and the Affordable Care Act (ACA) are being considered in a budget reconciliation package by Congressional Republicans. This comes from the Energy and Commerce Committee’s legislative text that includes work and reporting requirements for Medicaid enrollees and alterations to a recent ACA Marketplaces rule proposed by the Trump Administration.

These changes coincide with expected large health insurance coverage losses if enhanced premium tax credits for ACA marketplace coverage expire. Millions are likely to drop their coverage as out-of-pocket premiums increase significantly after 2025.

Impact of Proposed Changes

The Congressional Budget Office (CBO) anticipates these changes to result in at least 13.7 million more uninsured people by 2034. The uninsured rate could increase by roughly 30% if the proposed changes are implemented, reversing the declining uninsured rates that followed the implementation of the ACA.

Medicaid Provisions

The Subtitle D provisions of the House Energy and Commerce’s Budget Reconciliation proposal could increase the number of uninsured individuals by 7.7 million in 2023, according to the Congressional Budget Office. This increase is largely due to provisions that would reduce Medicaid enrollment.

Codification of ACA Marketplace Integrity and Affordability Proposed Rule

The Energy & Commerce text codifies policy changes from a recent Trump Administration proposed rule on program integrity. These changes are expected to increase the number of uninsured people by 1.8 million by 2034.

Expiration of Enhanced Tax Credits

According to the CBO, if enhanced ACA tax credits expire, 4.2 million more people will be uninsured by 2038. These credits were initially issued under the American Rescue Plan Act and extended under the Inflation Reduction Act but are set to expire at the end of 2025. The ACA Marketplace has more than doubled in size since 2020 due to these tax credits, and 88% of this growth comes from states President Trump won.

The expiration of the enhanced tax credits is anticipated to increase ACA enrollees’ out-of-pocket premium payments by over 75% on average. Lower-income and older enrollees, particularly those in states that have not expanded Medicaid, are expected to face the most significant premium payment increases.