Millions Would Lose Health Coverage if ACA Subsidies Expire: CBO

A massive legislative response to the Covid-19 pandemic, the $1.9 trillion American Rescue Plan Act signed into law by President Joe Biden in 2021 included more generous subsidies for those who get their health insurance through the Affordable Care Act, part of an effort to ensure that more Americans have access to healthcare. Those subsidies were extended through 2025 by the Inflation Reduction Act, and Democrats are pushing to extend those subsidies for at least another year in the current budget negotiations. It’s not clear, however, whether Republicans will be interested in providing extra funding for a program they widely deride as Obamacare, and a new analysis from the Congressional Budget Office shows just how costly GOP opposition could be.

According to a CBO analysis released this week, the failure to extend the ACA subsidies would cause 2.2 million people to go without insurance in 2026. That number would rise to 3.7 million in 2027, while averaging 3.8 million annually from 2026 to 2034.

The increase in the net cost for ACA plans will result in healthier people leaving the system, putting additional upward pressure on premiums as the patient population gets sicker on average, CBO said. “Without a permanent extension, CBO estimates, gross benchmark premiums will increase by 4.3 percent in 2026, by 7.7 percent in 2027, and by 7.9 percent, on average, over the 2026-2034 period,” the analysis said.

The CBO report, written in response to a query by Democratic lawmakers, comes on the heels of a separate analysis by the nonpartisan policy research group KFF of potential coverage losses in the Medicaid system. KFF found that if a Republican-controlled Congress were to roll back the generous subsidies that were offered to states under the Affordable Care Act to encourage them to expand their Medicaid systems, more than 3 million people would likely lose their health coverage. While all states could see losses, the problem is particularly acute for nine states – Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah and Virginia – that have laws on the books that require them to end Medicaid expansion if federal subsidies fall below a certain level.

For more on the KFF analysis, see this writeup by Phil Galewitz of KFF Health News.