President-elect Donald Trump’s return to the White House is set to make significant changes to consumer health care. Here are the things you should know about possible changes in Medicaid and ACA plans.
President-elect Donald Trump’s return to the White House is expected to bring several changes in the consumer health care.
Republicans could have little in the way of legislative obstacles to their aims of altering health insurance in the United States, specialists said, after the party maintained its narrow majority in the House of Representatives and won the Senate, which, along with the presidency, they now hold.
Some of the biggest changes may affect households that receive Health Insurance through Medicaid or a plan bought on an Affordable Care Act marketplace, as per health policy specialists.
They said that such reforms would release federal funds that could be utilised to assist in the funding of other Republican policies such as tax cuts.
Right now, only about 7.9% of Americans are uninsured, which is the lowest level of uninsured people in American history, according to Michael Sparer, a professor at Columbia University and chair of the Department of Health Policy and Management.
That figure was 17% when the Affordable Care Act was enacted more than a decade ago, he said. “That rate will start going up again,” Sparer said.
Trump on Nov. 14 said he wants to have Robert F. Kennedy Jr. to head the Department of Health and Human Services, which encompasses the CMS.
CMS, in the same way, manages the Affordable Care Act marketplace as well as the Children’s Health Insurance Program, or CHIP, among others. Kennedy, who has been critical of vaccines and has been labeled a conspiracy theorist, has promised to revolutionize the American health-care system.
A representative of Trump’s transition team declined to answer a question from CNBC regarding the president-elect’s health policy proposals. Here are some ways that health care could shift for consumers during the incoming Trump administration, as explained by specialists.
Obamacare Exchange
The premium subsidies that were ‘bet’ will run out Given how the election went, the improved subsidies on the ACA will probably not be renewed once they end in December 2025, according to Cynthia Cox, vice president and director of the ACA program at KFF, a health policy research organization.
“If I was going to place a bet on this, I’d be much more comfortable betting that they are going to expire,” Cox said.
That government-supported assistance, enacted during the pandemic through the American Rescue Plan in 2021, has reduced the premiums for coverage for those purchasing health insurance plans on the ACA marketplace.
Such customers comprise individuals who do not have access to a workplace plan, for instance students, self-employed consumers, unemployed among others.
A person earning $60,000 a year now pays $425 monthly for the premium, which was $539 before the improved subsidies, based on Cox’s estimate.
At the same time, a family of four earning about $120000 per annum pays $850 per month instead of $1649.
The permanently expanding of the ACA subsidies could cost about $335 billion in the next ten years, as estimated by the CBO.
“They’re concerned about the cost, and they’re going to be cutting taxes next year likely,” Cox said, of Republicans.
Still, It’s A ‘big’ Gamble To Forgo Health Care Insurance
About 3.8 million people will lose their health insurance if the subsidies expire, the Congressional Budget Office estimates. Those who keep it are likely to pay more in premiums.
“The bottom line is uncertainty,” said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy.
“The good news for marketplace consumers is that the enhanced [subsidies] will be available through 2025, so there should be no immediate changes,” Corlette added.
Even if the subsidies disappear, experts say it’s important to stay enrolled if you can, even if you have to make trade-offs on coverage to keep the costs within budget.
Even a cheaper plan with a big annual deductible can provide an important hedge against huge costs from unforeseen medical needs like surgery, said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida.
“I can’t emphasize how big a gamble it is to go without health insurance,” said McClanahan, founder of Life Planning Partners and a member of the CNBC Financial Advisor Council.
One heart attack easily costs $100,000″ out of pocket for someone without insurance, she said. “Do you have that to pay?”
Medicaid
A ‘pretty big target’ for lawmakers
Medicaid is the third-largest program in the federal budget, accounting for $616 billion of spending in 2023, according to the Congressional Budget Office.
Trump campaigned on a promise not to make cuts to the two largest programs: Social Security and Medicare.
That makes Medicaid the ‘obvious place’ for Republicans to raise revenue to finance their agenda,” said Larry Levitt, executive vice president for health policy at KFF.
“Medicaid will have a pretty big target on its back,” Levitt said.
Cuts would “inevitably mean” fewer households would get benefits, Levitt said. Medicaid recipients tend to be lower-income households, people with disabilities and seniors in nursing homes, he said.
Medicaid cuts were one of the biggest drivers of the push among Trump and other Republican lawmakers to repeal and replace the Affordable Care Act, also known as Obamacare, in 2017, said Levitt.
How Medicaid Might Be Curtailed
Experts cite past proposals and remarks from the Trump administration, Republican lawmakers, and the Project 2025 conservative policy blueprint to detail the new Medicaid cuts.
For example, the Trump administration may try to add work requirements for Medicaid recipients, as it did in his first term, said Sparer of Columbia University.
Furthermore, Republicans may try to cap federal Medicaid spending allocated to states, experts said.
The federal government matches a share — typically 50% or more — of Medicaid spending by the states. That dollar amount has no cap.
Republicans might attempt to convert Medicaid into a block grant, where an annual sum is sent to each state to use as it sees fit, or to implement a per-capita cap, whereby benefits for each Medicaid enrollee are capped, Levitt explained.
Lawmakers may also attempt to roll back the expansion of Medicaid under the Affordable Care Act, which increased the pool of people who would qualify for coverage, experts said.
They could do this by cutting federal financing to the 40 states, plus the District of Columbia, that have expanded Medicaid eligibility.
That would shift “an enormous financial risk to states, and many states as a result would drop the Medicaid expansion,” Levitt said.
Experts cite past proposals and remarks from the Trump administration, Republican lawmakers, and the Project 2025 conservative policy blueprint to detail the new Medicaid cuts.
For example, the Trump administration may try to add work requirements for Medicaid recipients, as it did in his first term, said Sparer of Columbia University. Furthermore, Republicans may try to cap federal Medicaid spending allocated to states, experts said.
The federal government matches a share — typically 50% or more — of Medicaid spending by the states. That dollar amount has no cap.
Republicans might attempt to convert Medicaid into a block grant, where an annual sum is sent to each state to use as it sees fit, or to implement a per-capita cap, whereby benefits for each Medicaid enrollee are capped, Levitt explained.
Lawmakers may also attempt to roll back the expansion of Medicaid under the Affordable Care Act, which increased the pool of people who would qualify for coverage, experts said.
They could do this by cutting federal financing to the 40 states, plus the District of Columbia, that have expanded Medicaid eligibility. That would shift “an enormous financial risk to states, and many states as a result would drop the Medicaid expansion,” Levitt said.
It’s unclear if lawmakers would keep the drug policies intact, experts said. Trump signed executive orders in 2020 aimed at lowering costs for prescription medications, for example.
“It’s not at all clear Trump will be a friend of the pharma industry,” Sparer said.
For example, the Inflation Reduction Act gave the federal government— for the first time—the authority to negotiate prices with pharmaceutical companies over some drugs covered by Medicare.
That provision is set to take effect for 10 drugs — some of Medicare’s “most expensive and most commonly prescribed” medications, treating various conditions including heart disease, diabetes, arthritis, and cancer — in 2026, according to the Centers for Medicare & Medicaid Services.
The measure will save patients $1.5 billion in out-of-pocket costs in 2026, CMS estimates. The federal government would add more medications to this list of covered drugs over the years.
The Inflation Reduction Act also capped Medicare copays for insulin at $35 a month. They had no limit beforehand. KFF reported in 2020 that the average Medicare Part D insulin user paid $54 out of pocket a month per prescription of insulin.
The law also capped out-of-pocket costs at $2,000 a year for prescription drugs covered by Medicare, starting in 2025. There was no cap beforehand.
A total 1.4 million of Medicare Part D enrollees spent more than $2,000 out of pocket on medicines in 2020, according to KFF. Those costs averaged a person at $3,355.
