Health Insurance For Millions Is Now Officially At Stake — Again

Everyone knew what Donald Trump and the Republicans had in mind for health care when they were about to take power eight years ago, because they had announced their intentions repeatedly — and loudly.

Trump had spent the 2016 campaign vowing to repeal the Affordable Care Act, aka Obamacare. Republicans in Congress had voted repeatedly to do the same. Days after the election, they stood shoulder-to-shoulder in Washington and pledged to make repealing the law a top priority. And they proceeded to try to do just that, pushing a bill to kill the Affordable Care Act through the House only to come up one vote short in the Senate.

This time around, their intentions on health care are a lot less clear. But they may still have big plans.

During the 2024 campaign, Trump wrote several social media posts expressing renewed interest in repealing Obamacare. Pressed on specifics, he famously said during his televised debate with Vice President Kamala Harris that he had “concepts of a plan.”

Prominent Republicans like Vice President-elect JD Vance made their own comments suggesting some big changes to the Affordable Care Act were up for debate, and just last week, several high-ranking Republicans on Capitol Hill told Politico big cuts to Medicaid should be on the agenda, too.

But nobody is holding press conferences about health care plans like they were at this point in 2016, and Trump himself has tried to walk back some of his social media posts, following them up with comments suggesting maybe he wasn’t so interested in revisiting the Obamacare debate. On Capitol Hill, the GOP’s big focus right now is on how to handle immigration and tariffs, and on confirming Trump’s Cabinet nominees.

It’s not hard to imagine why Republicans might be treading more carefully this time around: They remember just how badly a frontal assault on federal health care programs went last time. The legislation Republicans tried unsuccessfully to pass in 2017 would have repealed Obamacare and slashed Medicaid, the program that pays bills for 73 million low-income Americans. It alienated large swaths of the public, and almost certainly contributed heavily to the GOP’s losses in both the 2018 and 2020 elections.

But Republicans still have two powerful reasons to pursue big changes in health care, whatever the potential political consequences.

Philosophically, they believe that downsizing and reshaping these programs is the right thing to do. And as a practical matter, they will be looking for ways to offset at least some of the cost of their proposed tax cuts, which could show up as several trillion dollars worth of lost revenue on the federal government’s ledger. (That’s to say nothing of Elon Musk’s wild goal of cutting overall federal spending by a third.)

The biggest pot of money in the federal budget goes to the big entitlement programs. And although Trump has pledged to protect Medicare and Social Security, he has made no equivalent guarantees about either the Affordable Care Act or Medicaid. That’s a pretty good tell about what’s coming next.

The only questions are how aggressive Republicans want to get with cutting these programs — and whether political blowback can stop them from succeeding.

How Obamacare Got A Boost

When it comes to the Affordable Care Act, the most obvious and possibly the biggest change wouldn’t be a cut.

It’d be a decision not to renew a temporary, soon-to-expire measure that Obamacare’s champions believe corrected an early flaw in the program ― and that analysts believe has helped millions to get insurance they could now lose.

One of the ways the Affordable Care Act transformed American health care was by making sure working- and middle-class people could get private health insurance even if their employer didn’t provide health benefits, and even if they had pre-existing medical conditions. To accomplish this, the law set up online “marketplaces” (HealthCare.gov and state-run versions like Covered California) where people could shop for policies, all of which must include a standard set of benefits. Under the law, insurers also have to issue coverage at uniform prices, regardless of an individual customer’s health.

People who buy coverage through these marketplaces may also be eligible for financial assistance, depending on their incomes. But to get the legislation through Congress back in 2009 and 2010, when even many Democrats were wary of too much new federal spending, ACA champions agreed on a less ambitious program that offered less generous assistance. So even as millions were able to get affordable coverage for the first time, millions of others struggled with high premiums and out-of-pocket costs ― or, in many cases, simply stayed uninsured.

All along, the law’s supporters said they hoped to eventually set aside more money, so that more people could afford Obamacare plans. The pandemic provided that opportunity.

In the middle of a public health emergency, even fiscally conservative Democrats were willing to spend what it took to help people get insurance. That spirit continued to prevail one year later, when President Joe Biden and the Democrats renewed that temporary assistance as part of the Inflation Reduction Act, a sweeping health and climate bill. The effects have been dramatic.

People who get the subsidies are spending 44% less on their premiums than they were before the extra assistance was available, according to estimates. And the number of people buying policies through the marketplaces has risen from 12 million to 21.4 million, an increase of nearly 80%. The extra assistance alone doesn’t explain the jump, but it’s a big part of the story.

And now that story might end.

When Inaction Is Action

The expansion is set to expire after 2025. Democrats have called repeatedly for renewing it again. Republicans have said very little on the subject, and their simplest course of action would be simply to let the extra assistance lapse.

“The important thing to remember about this is that if they do nothing, it goes away,” Debbie Curtis, a veteran Democratic health aide who is now a vice president at the strategy and lobbying firm McDermott+, told HuffPost. “It doesn’t require congressional action to get potentially what they want.”

But there’s one good reason to think Republicans might listen to arguments for keeping some version of the subsidies going: Many of their constituents depend on them.

If the extra assistance goes away, the number of people without health insurance next year would increase by as many as 4 million people, according to an estimate by the Urban Institute, a nonpartisan think tank. Many other people would keep their coverage, but pay more for it. And while the impact would be felt nationwide, some states would be especially affected.

West Virginia, for example, already has some of the most expensive private insurance in the country ― and one of the oldest populations, as well. That matters because the Affordable Care Act does allow insurers some leeway to vary premiums based on age. Seniors, with less assistance to offset those higher premiums, would feel a lot more financial pain.

“I just think it hasn’t been fully appreciated by policymakers in D.C. just how widespread the problem will be, and how severe the premium increases could be, if we don’t have action in Congress,” Sarah Lueck, vice president for health policy at the left-leaning Center on Budget and Policy Priorities, told HuffPost.

Curtis agrees, and thinks Republicans on Capitol Hill may think twice once they learn more.

“If there’s an effort to really educate members on [premium increases] ― and if governors care about that ― that could absolutely make a difference here,” Curtis said.

Extending the extra assistance would be costly ― at least $25 billion a year, according to a 2022 estimate from the Congressional Budget Office. That $25 billion price tag is still much smaller than the proposed GOP tax cuts, which would overwhelmingly benefit the wealthy. But it still might be more than Republicans, who’ve never embraced Obamacare, want to spend on it.

Indeed, prominent conservative analysts like Brian Blase, who served in the first Trump administration and is now president of the right-leaning Paragon Health Institute, have been methodically building a case against renewing the temporary subsidies. Evidence suggests, they argue, that a significant number of people are deliberately misrepresenting their incomes in order to qualify for assistance — or being coached to do so by insurance agents and brokers, who may collect commissions.

Just how pervasive these practices are remains the subject of debate. But Blase and other conservatives say such practices are inevitable when so much aid is available. “The only way to meaningfully reduce waste and fraud is for Congress to permit the enhanced part of the subsidies to expire,” he said in October.

Still, it’s possible Republicans will agree to some kind of partial extension of the extra assistance simply to avoid widespread premium hikes that would jolt their constituents.

“I think that Republicans could very easily be open to a conversation of somewhere between original ACA subsidies and temporary, enhanced ACA subsidies,” said Rodney Whitlock, a longtime Republican adviser on health care who is also a vice president at McDermott+. “And I think the question will be, is there an opportunity for there to be any type of bipartisan conversations along that line?”

Why It’s Always About Medicaid

For deeper cuts to the federal budget, Republicans are bound to look at Medicaid. It’s the fourth-largest item in the budget, behind Social Security, Medicare and defense spending, with annual federal expenditures of more than half a trillion dollars.

Medicaid is a joint federal-state program. Washington establishes basic rules and provides the majority of funding, then allows states to manage the program within those parameters. In the old, pre-Obamacare days, states frequently used that leeway to restrict enrollment to people whose incomes were below or even well below the poverty line ― and, even then, only people who fell into certain demographic categories, like children or pregnant women.

The Affordable Care Act ― in addition to making private insurance more widely available ― offered the states a new deal on Medicaid. In exchange for states expanding their programs, so that anybody with income below or just above the poverty line qualified, the federal government would pick up nearly all of the cost for newly eligible residents.

Most states ultimately said yes to that deal. It’s the single biggest reason the number of Americans without insurance has fallen to record lows, and it’s led to all kinds of benefits, according to a large and still-growing body of research. People who have gotten Medicaid through the Affordable Care Act are less likely to fall behind on rent and credit card bills, for example, and more likely to get regular medical care.

But like everything else in health care, that progress has come at a cost — one that Republicans have made clear they don’t think the federal government should bear. That is why prominent conservative analysts have called for reducing or eliminating the extra federal matching dollars that states get when they expand eligibility.

If that happened, states would face a choice: find the funds to pay for all those extra Medicare enrollees, or simply stop covering them. And it’s not hard to guess what choice most states would make, according to Larry Levitt, executive vice president for health policy at the research organization KFF.

“If the enhanced match were eliminated and the standard match were only available, I have to believe most states would drop the expansion,” Levitt told HuffPost. “It would just be too much money to come up with all of a sudden.”

The other way Republicans could cut Medicaid spending would be to change the program’s basic funding model, by introducing some version of what’s known as a “block grant.” Today, the federal government’s commitment to Medicaid is essentially open-ended ― it will cover its share of the costs, no matter how many people enroll and no matter how expensive health care gets. With a block grant, or one of the many variations on it, the feds would give the states money based on a pre-set formula.

That could leave states on the hook for a lot more spending, especially during times of economic hardship when the demand for Medicaid would be highest. The health care section of Project 2025, the governing manifesto from the right-wing Heritage Foundation, includes a block grant scheme. And according to recent reports in Politico and the Washington Post, Trump and the Republicans are giving the concept serious consideration.

Exactly what they would embrace, and how it would work out, is difficult to say without an actual proposal on the table. But it’s possible to get some sense of scale by looking back at the 2017 Affordable Care Act repeal legislation that eventually got through the House. That bill included both a reduction in federal funding for Medicaid expansion and a change in the program’s overall funding that looked a lot like a block grant.

CBO estimated the legislation would have reduced federal spending on Medicaid by $800 billion over 10 years, which is certainly the kind of big savings some Republicans and their allies want.

It also would have left 14 million more Americans without health insurance.

How This Debate Is Different

Whether Republicans could get these kinds of cuts through Congress is a separate question — and a complicated one, too.

The widely held assumption for decades was that Medicaid, which only benefits poor people, was more politically vulnerable than Medicare, which is virtually sacrosanct because it benefits everyone.

Republicans in 2025 will have at least one and probably two more Senate seats than they did in 2017, the last time they tried something like this. But they will also be operating with a smaller margin in the lower chamber.

One of the frequently forgotten episodes in the 2017 health care fight was how close the effort came to collapsing in the House, long before it got to the Senate. At the time, Republicans had a majority of roughly 240 seats. Now their majority is likely to end up around 220, pending final counts in still-contested races.

One reason passing repeal legislation was tough in 2017 was that Medicaid turns out to have some passionate, effective defenders. That includes advocates for seniors and people with disabilities who rely on Medicaid for long-term care, some of whom staged memorable “die-ins” on Capitol Hill. Constituents showed up at town hall meetings for their members of Congress, warning that block-granting the program or ending the Medicaid expansion funding would leave them or their loved ones without insurance.

On a list of the 20 most vulnerable House Republicans that former Democratic pollster Adam Carlson posted to X (formerly Twitter), all but one were from states that had expanded Medicaid. Turning just two or three of these Republicans against huge health care cuts might be enough. That’s why some experts think Republicans are more likely to settle on smaller, more carefully targeted reductions, like subjecting Medicaid recipients to more frequent eligibility checks or work requirements.

These sorts of changes inevitably reduce the number of people who end up on the program ― in many cases, because states make the process for verifying income so confusing and complex that even people who are eligible end up losing their benefits.

These narrower cuts also tend to poll better than slashing health programs overall, in part because many voters like the idea of tying benefits to work.

But precisely because these smaller cuts would affect fewer people, they might not yield the kind of big savings many Republicans want in order to offset their tax cuts. And Republicans know the conservative media outlets — and social media influencers — that their supporters follow are unlikely to hype up stories of hardship caused by health care rollbacks of any kind.

“In 2017, more Republicans cared if something they did or were doing ended up on the front page of the Washington Post and New York Times,” Whitlock said. “I don’t think they care as much anymore. … They may not have any fucks to give.”