Republicans in Congress are considering a budget reconciliation bill that would raise consumer health care costs, leave millions more people uninsured, and strain state budgets. Among its many changes, the bill would fund the Affordable Care Act’s (ACA) cost-sharing subsidies in a way that will further limit coverage for most abortion services. If this provision becomes law, at least some insurers who currently provide coverage for abortion services would likely be forced to stop doing so.
What are cost-sharing subsidies?
Cost-sharing subsidies, also known as cost-sharing reductions, are a type of financial assistance for eligible consumers who buy health plans in the ACA marketplaces. Plans offer varying amounts of cost-sharing, from bronze plans (with high deductibles and copayments) to silver, gold, and platinum plans (with lower out-of-pocket costs but higher premiums).
The ACA requires insurers to offer silver plans with reduced cost-sharing to consumers with incomes between 100 percent and 250 percent of the federal poverty level ($15,060 to $37,650 for an individual, and $31,200 to $78,000 for a family of four). This cost-sharing subsidy reduces people’s out-of-pocket costs through lower deductibles, copayments, and out-of-pocket maximums. Fifty-one percent of marketplace consumers selected a silver plan with cost-sharing subsidies in 2025.
The silver plan with the second-lowest premium in a local market, known as the benchmark plan, is also used to calculate the size of premium tax credits, another type of financial assistance. Eligible consumers can apply premium tax credits to purchase any plan — whether bronze, silver, or gold.
How would funding for cost-sharing subsidies change under the budget reconciliation bill?
Until 2017, the federal government directly reimbursed insurers for offering these cost-sharing subsidized plans. But the first Trump administration eliminated these direct payments to insurers. Because insurers still had to offer subsidized plans, state insurance regulators allowed insurers to increase premiums to cover the cost of the subsidy. Many insurers raised premiums only on the silver benchmark plans. This “silver loading” resulted in larger premium tax credits, making marketplace premiums even more affordable for millions of consumers.
The budget reconciliation bill would alter the current approach to funding cost-sharing subsidies. Beginning with the 2026 plan year, the federal government would once again directly reimburse insurers for cost-sharing subsidized plans, which would end silver loading and likely raise consumers’ premium costs in most states.
What do cost-sharing subsidies have to do with abortion coverage in the budget reconciliation bill?
Insurers that cover abortion services through marketplace plans must comply with many restrictions, including restrictions under the Hyde Amendment, which prohibits the use of federal funds for abortion services unless the pregnancy is a result of rape or incest, or would endanger a woman’s life. The ACA has also long prohibited insurers from using premium tax credits or cost-sharing subsidies to pay for abortion services that fall outside the Hyde Amendment’s narrow exceptions. Rather, insurers must collect at least $1 in monthly premiums and maintain a separate account to pay for abortion-related care.
In addition to directly reimbursing insurers for cost-sharing subsidized plans, the budget reconciliation bill would prevent silver marketplace plans from receiving cost-sharing subsidies if they cover abortion services that fall outside the Hyde Amendment. The bill would do so even though the ACA already prohibits federal funds, including cost-sharing subsidies, from being used for this care.
What are the implications of the budget reconciliation bill for marketplace affordability and abortion coverage?
The budget reconciliation bill would have significant implications on plan affordability and the coverage of abortion services in states where abortion remains lawful.
Marketplace premiums would rise. The consumers most affected by the end of silver loading would be those receiving subsidies who have incomes between 200 percent and 400 percent of the poverty level ($30,120 to $60,240 for an individual, and $62,400 to $124,800 for a family of four) enrolled in bronze or gold plans. Because their tax credits would be smaller, their premium costs would rise. A Brookings Institution analysis estimates that a married, 60-year-old couple earning $62,000 a year with a gold plan could see their monthly premiums rise by $350.
Consumers would lose coverage. The Congressional Budget Office projects that the House bill’s changes to the ACA marketplaces would increase the number of uninsured by 4 million in 2034. This includes an estimated 300,000 people who wouldn’t be able to afford their premiums because of the abrupt end of silver loading. Combined with the bill’s draconian cuts to the Medicaid program and the expiration at the end of 2025 of extra premium tax credits passed during the pandemic, the number of uninsured people would increase by an unprecedented 16 million by 2034.
Insurers would drop abortion coverage. Half of states prohibit marketplace plans from covering abortion services, while 12 states currently require this coverage. In the remaining 13 states and in the District of Columbia, abortion coverage is neither required nor prohibited. In these states — which include Connecticut, Michigan, and New Mexico — the reconciliation bill could have an outsized impact, since insurers that now cover abortion services voluntarily would likely drop this coverage to be newly eligible for federal cost-sharing subsidy payments. Even insurers that would want to maintain this coverage would face significant market pressure to eliminate this benefit to be able to compete with plans that don’t cover abortion services and thus could offer lower premiums under the new bill.
There could also be future disruption in the states that require marketplace plans to cover abortion services. Because insurers that offer plans that cover abortion services would not be reimbursed for cost-sharing subsidies, they could continue silver loading to recoup their costs of offering these plans. Yet it is unclear whether the Trump administration would try to prohibit silver loading, as federal officials previously proposed. If the administration prevents silver loading, these states could be forced to sue the federal government to resolve the conflict between this provision and state law, eliminate or limit abortion coverage, or pay insurers for cost-sharing subsidies themselves.
If the bill becomes law, it will deliver a profound shock to the health care system. The bill would create millions of newly uninsured people and increase consumers’ premiums and health care costs. It would also disrupt state and local economies and impose new barriers on Americans’ ability to access needed health care, including reproductive health services.
