House Budget Bill and Tax Credit Expiration Will Make It Harder to Get and Afford Marketplace Health Plans

The budget reconciliation bill — which moves to the Senate this week — includes proposals from Republicans in Congress that will make it harder for people to enroll in marketplace health plans and also will make those plans less affordable for many and more onerous to use. Currently, more than 24 million Americans get their coverage through these plans, which were created under the Affordable Care Act (ACA). People could see major changes in their health coverage as early as this fall’s open enrollment period, which starts on November 1.

If the bill becomes law and Congress allows the enhanced premium tax credits — which were passed during the pandemic and allow people to more affordably buy marketplace health plans — to expire, there will be consequences for the 24 million people in marketplace plans and the millions more who will seek coverage there.

It will be harder for people to enroll during the open enrollment period and throughout the year, because the bill

• shortens the open enrollment period in all states by at least one month. During open enrollment for 2025 plans, which lasted from Nov. 1 through January 15 and longer in some states, 40 percent of enrollees, or about 10 million people, selected plans after December 15. States that have opted for longer open enrollment report higher shares of young adults enrolling in January. The open enrollment period under the bill would run from Nov. 1 through Dec. 15.
• requires marketplaces to institute stricter eligibility verification processes for everyone who applies for coverage and to begin that process on August 1st of each year. Consumers would have to provide documents showing proof of income, immigration status, insurance status, family size, etc. This information was previously verified using government databases. It also adds more stringent income verification requirements for people with low incomes.
• effectively ends the ability of people to automatically re-enroll because of these new eligibility verification processes. In 2025, nearly 11 million marketplace enrollees — that is, 45 percent of total enrollment — were autoenrolled in their plans. Loss of autoenrollment would increase the number of uninsured by 700,000 by 2034, according to the Congressional Budget Office (CBO).

• imposes more restrictions on the ability to enroll outside the open enrollment period. Currently, people have opportunities to enroll because of job loss or other life changes that cause them to lose their health insurance. The bill also eliminates monthly special enrollment periods for people with low incomes and even blocks states from pursuing such policies. This provision would leave an estimated 400,000 low-income people uninsured, according to the CBO.
• allows insurers to deny coverage to people who owe them any outstanding premium balances over any period of time.
• makes many lawfully present immigrants ineligible for subsidized marketplace coverage, including lawfully present immigrants with incomes under 100 percent of the federal poverty level (i.e., $15,650 for an individual and $32,150 for a family of four). Currently, the ACA allows all lawfully present immigrants with incomes under 100 percent of poverty who are in the five-year waiting period for Medicaid access to subsidized coverage in the marketplaces. The CBO projects eliminating this group’s eligibility would increase the number of uninsured by 300,000.
• makes young adult “Dreamers” — that is, people who came to U.S. as children and are protected against deportation by the Deferred Action for Childhood Arrivals (DACA) program — ineligible for marketplace coverage. The Biden administration allowed DACA recipients to enroll in the marketplaces starting in 2025.

Premiums will be more expensive because the bill

• does not include an extension of the extra premium tax credits, which are set to expire at the end of 2025. Without an extension, premiums will spike, meaning an annual increase of $387 to $2,914, depending on income.
• appropriates funding for cost-sharing subsidies that the Trump administration eliminated in 2017, which will increase premiums for many people who receive tax credits. To make up for the cancelled funding, insurers used a work-around that had the effect of making premiums less expensive for many enrollees, and therefore increased enrollment. The appropriated funds will paradoxically make premiums less affordable for many, leading to coverage losses. The CBO estimates this provision would increase the number of uninsured by 300,000.
• makes it harder and more expensive for people to buy marketplace plans, which tends to discourage healthier people from enrolling, leaving a less healthy group of people covered, and consequently, higher premiums. The bill specifically builds barriers for people who tend to be healthier, including some people with low incomes, young people, and Dreamers.

Out-of-pocket costs will be higher because the bill

• changes the formula that determines annual out-of-pocket maximums for health plans in a way that leaves consumers on the hook for more out-of-pocket costs. The new out-of-pocket maximums will be up to $10,600 for individual plans and $21,200 for family plans. These amounts are 15 percent higher than last year’s maximums and 4 percent higher than they would be under current policy.
• gives insurers greater flexibility to meet requirements for health plans in ways that could leave consumers with higher deductibles and copayments.
• eliminates the ability of marketplaces to automatically re-enroll people into plans that give them the maximum cost protection — either at the same or lower premium and with the same provider network. This will have the effect of increasing cost sharing for people who are affected by the provision.

Millions More Uninsured and Sicker Americans

The CBO projects that the marketplace changes in the budget bill and the loss of extra tax credits will increase the number of uninsured people by 8.2 million by 2034. When combined with the bill’s new eligibility requirements in Medicaid, 16 million more people are expected to be uninsured in 10 years. This would drive the overall number of uninsured people above 40 million by 2034, not far from pre-ACA levels.

This is ominous news for both the health and economic security of Americans. Health insurance matters: without health insurance coverage, only the very wealthiest Americans can afford health care. The ACA’s Medicaid expansion reduced mortality among lower-income adults by 21 percent, saving more than 27,000 lives between 2010 and 2021. This bill will reverse those gains. Far from making people healthy again, the bill’s unprecedented damage to the nation’s health insurance system will drive already high levels of patient medical debt even higher and cause millions of Americans to experience unnecessary suffering, poorer health, and shorter lives.