During his 2024 campaign, Donald Trump stirred confusion with mixed messages regarding the Affordable Care Act (ACA), also known as Obamacare. Despite these conflicting statements, his track record during his first presidency strongly suggests significant changes are on the horizon for the ACA, especially with continued Republican control in the House. As Trump potentially enters his first year back in office, several key shifts impacting Obamacare are anticipated.
The Looming Expiration of Enhanced ACA Subsidies
A critical aspect of the ACA’s current stability lies in the enhanced subsidies implemented by the Biden administration. These subsidies dramatically lowered premium costs, effectively cutting them in half for millions of Americans and fueling a surge in enrollment, particularly in Southern states with historically lower coverage rates. However, these enhanced subsidies are slated to expire at the end of 2025.
Unless Congress intervenes to extend them, the disappearance of these subsidies will trigger a substantial increase in net premium payments. Average premium costs are projected to jump by 79%, with some states potentially seeing costs more than double. The Congressional Budget Office (CBO) estimates that permanently extending these enhanced subsidies would carry a $335 billion price tag over a decade. Furthermore, the CBO predicts a significant drop in ACA Marketplace enrollment, plummeting from 22.8 million in 2025 to 18.9 million in 2026 if the subsidies are not renewed, potentially reaching as low as 15.4 million by 2030. While a renewal might be considered during a lame-duck session, the likelihood of extension is considerably lower compared to a scenario where Democrats had secured broader electoral victories.
House Control and the Broader Future of the ACA
The extent of changes to the ACA is heavily contingent on which party controls the House of Representatives. If Republicans maintain their majority, House Speaker Mike Johnson suggests that “massive” reforms to the ACA could be implemented. Although outright repeal of Obamacare proved unpopular in 2017, Republicans might seek to offset tax cuts by significantly scaling back ACA subsidies. They could also pursue substantial funding reductions and fundamental changes to Medicaid financing, impacting not only the ACA’s Medicaid expansion but the entire program.
This approach mirrors the 2017 “repeal and replace” effort, which, while preserving protections for pre-existing conditions on paper, would have left millions uninsured due to budget-driven coverage cuts. Similar to 2017, budget reconciliation could be employed to enact changes to ACA and Medicaid funding, circumventing the need to overcome a filibuster in the Senate.
Regulatory Adjustments and Legal Challenges to Obamacare
Even if Democrats were to gain control of the House, a Trump administration retains avenues for altering the ACA through executive actions. For instance, the administration could grant state waivers, affording Republican-led states greater flexibility to modify Marketplace rules or impose stricter Medicaid eligibility requirements, such as work requirements. Executive authority could also be used to relax regulations on non-ACA-compliant health plans, which often discriminate against individuals with pre-existing conditions, a tactic employed during Trump’s first term.
Furthermore, a Trump administration could again defund ACA marketing and outreach initiatives, which previously led to decreased enrollment. Citing fraud concerns, stricter verification processes could be introduced, making ACA plan enrollment more challenging. Finally, the administration’s stance on ongoing legal challenges to the ACA, including whether to support or oppose them, will significantly shape the law’s future.
