Andrea Deutsch stands in her pet store in Narberth, Pa. Deutsch is one of the millions of people who receive federal aid to help them pay their health insurance premiums on an Affordable Care Act exchange. The extra help is set to expire at the end of 2025, and states say they don’t have the money to replace it. (Courtesy of Andrea Deutsch)

Andrea Deutsch, the mayor of Narberth, Pennsylvania, and the owner of a pet store in town, doesn’t get health care coverage through either of her jobs. Instead, she is enrolled in a plan she purchased on Pennie, Pennsylvania’s health insurance exchange.

Deutsch, who has been mayor since 2018, is paid $1 per year for the job. Her annual income, from Spot’s – The Place for Paws and her investments, is about $50,000. The 57-year-old, who is diabetic, pays $638.38 per month for health care coverage — about half of the $1,272.38 she’d owe without the enhanced federal subsidies Congress and the Biden administration put in place in 2021.

But that extra help is set to expire at the end of 2025. It would cost an estimated $335 billion over the next decade to extend it — a step the Republican-controlled Congress and the Trump administration are unlikely to take as they seek budget savings to offset potential tax cuts.

States say they don’t have the money to replace the federal aid. In Pennsylvania, for example, doing so would take about $500 million per year, according to Devon Trolley, the executive director of the state’s exchange.

“That is a significant amount of money, an insurmountable amount of money,” Trolley said.

The disappearance of the federal help would make coverage unaffordable for millions of Americans, including Deutsch. She said it would be a struggle to pay double what she is paying now.

“You try not to go bankrupt by the end of your life,” Deutsch told Stateline. “You need assets to take care of yourself as you get older and to have a little bit of security.”

Enhanced subsidies

The 2010 Affordable Care Act included some subsidies to help people purchase health insurance on the exchanges created under that law. Under the enhanced subsidies that started in 2021, some people with lower incomes who qualified for the original subsidies have been getting bigger ones. And those with higher incomes, who wouldn’t have been eligible for any help under the original rules, are now receiving assistance.

Thanks to the enhanced subsidies, people making up to 150% of the federal poverty level, or $22,590 for an individual, are now getting free or nearly free coverage. And households earning more than four times the federal poverty level, who didn’t qualify for subsidies before, are getting some help.

The enhanced aid also has helped push ACA marketplace enrollment to record levels, reaching more than 21 million this year. Southern states that have not expanded Medicaid as allowed under the ACA have seen the most dramatic growth in marketplace enrollment since 2020, according to KFF, a health policy research organization. The top five states with the fastest growth are Texas (212%), Mississippi (190%), Georgia (181%), Tennessee (177%) and South Carolina (167%).

If the enhanced subsidies go away, premium payments will increase by an average of more than 75%, according to KFF. Some people, like Deutsch, would see their payments double.

Given those premium hikes, millions of Americans would no longer be able to afford the coverage they’re getting on the exchanges, according to the nonpartisan Congressional Budget Office. CBO estimates that enrollment would drop from 22.8 million in 2025 to 18.9 million in 2026 to 15.4 million in 2030. Some of those people would find coverage elsewhere, but others would not.

Edmund Haislmaier, a senior research fellow at the conservative Heritage Foundation, said Republicans view the expiration of the enhanced subsidies as “an opportunity to rework and address some of the basic flaws in the ACA.”

Before the ACA, Haislmaier said, many self-employed people, such as small-business owners and freelancers, were able to find their own private insurance at competitive prices. But the health care law destroyed that market, he said, leaving such people with a selection of expensive and subpar plans.

Haislmaier said it would take time for the Trump administration to determine how it wants to change the ACA — which President-elect Donald Trump unsuccessfully tried to repeal during his first term — but that “you can do that in a way that preserves access and preserves subsidies for the lower-income people who were the primary focus of the ACA.”

States’ limitations

But Jared Ortaliza, a research associate at KFF, said letting the enhanced subsidies expire could result in higher premiums for everyone. That’s because higher prices likely would prompt many healthier people to forgo insurance, he said. Their departure would leave only chronically ill people on the exchanges, and the cost of their care is higher.

“If sicker enrollees need coverage because they need care, they’ll still choose to buy it, potentially. And if the market were sicker as a whole, that could drive premiums upward as well,” Ortaliza told Stateline.

Ortaliza said states might consider keeping premiums down through so-called reinsurance, or reimbursing insurers for their most expensive enrollees. Theoretically, they also could try to replace the expiring federal aid with their own money.

But few if any states have the financial flexibility to do that, said Hemi Tewarson, executive director of the nonpartisan National Academy for State Health Policy.

“There might be a couple states who don’t have current state subsidies that might add that, but that will be very nominal,” Tewarson told Stateline, adding that officials from different states have been discussing potential solutions. “They are all assuming that they would just have to absorb the loss of coverage across the population.”

Trolley, the head of the Pennsylvania exchange, said her state is working to provide its own subsidy to make the marketplace plans even more affordable. But even when fully implemented, it would spend only $50 million on that help, a tenth of what it would need to replace the federal aid.

Two-thirds of the 435,000 Pennsylvanians who purchase insurance on the marketplace joined after the enhanced federal subsidies were put in place in 2021. If they expire, Trolley said, she worries that 100,000 or more exchange participants will leave.

Jessica Altman, executive director of California’s exchange, said her state is in a similar situation. California currently receives $1.7 billion annually in enhanced subsidies from the federal government and spends an additional $165 million of its own money to keep costs down.

California estimates that if the subsidies expire, monthly premiums for the state’s enrollees would increase by an average of 63%. More than 150,000 people would no longer be eligible for federal help, and between 138,000 and 183,000 would disenroll, the state estimates.

Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org.

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Up to 90,000 Wisconsin residents could get better health insurance if Wisconsin agrees to expand Medicaid under the Affordable Care Act, and rural residents would be the most likely to benefit, according to a new report published Thursday.

Expansion would give the state just over $1 billion from the federal government for each two-year state budget cycle, along with a one-time boost of $1.29 billion, concludes the report, published by the Wisconsin Policy Forum.

The forum’s practice is not to make recommendations based on its analysis, but instead to present alternatives and their probable outcomes.

The report finds that the number of people moving from the rolls of the uninsured would be more modest than in many states — about 23,000, according to one projection.

More striking, however, is that the state could save more than $200 million a year just on coverage it already provides, according to the report.

The federal Affordable Care Act (ACA), enacted in 2010 and implemented in 2014, established a government marketplace for individual health insurance plans and set standards for those plans. It also included provisions to expand health care coverage under Medicaid, a joint federal-state program.

States that accept the expansion agree to cover people with incomes up to 138% of the federal poverty guideline. In return the federal government pays 90% of the cost for the additional Medicaid recipients. The standard federal matching rate in Wisconsin is 60.7%.

Former Gov. Scott Walker, a Republican, declined to take the expansion and its requirements when the ACA took effect. Gov. Tony Evers, a Democrat first elected in 2018, has repeatedly sought to expand Medicaid. Just before he took office, however, the Legislature passed and Walker signed a law requiring lawmakers’ approval for the governor to accept expansion. Republican lawmakers have since rejected Evers’ attempts to do so.

Of 10 states that have still not accepted Medicaid expansion, Wisconsin “is on a completely different footing,” said Jason Stein, president of the Wisconsin Policy Forum and the report’s author.

BadgerCare Plus, the Wisconsin Medicaid program for primary and acute health care for individuals and families, covers uninsured children and pregnant women with household incomes up to 300% of the federal poverty guideline. It covers parents and childless adults with incomes up to 100% of the guideline.

By accepting full Medicaid expansion, Wisconsin would raise the parents’ and adults’ income limits to 138% of the guideline while paying less overall.

“In 2024, the state of Wisconsin is paying 39.3% of the costs of covering the roughly 190,000 childless adults currently in BadgerCare Plus rather than the 10% rate available through a full ACA expansion,” the Wisconsin Policy Forum report states.

The other non-expansion states don’t cover childless adults unless they have a disability, and their median income limit for parents to get coverage is 31% of the poverty guideline, according to the report.

The state Department of Health Services (DHS) has calculated that with expansion, about 90,900 state residents would become eligible for Medicaid.

Fewer than a third of that number — about 23,000 people, the Urban Institute and the Robert Wood Johnson Foundation have projected — would be previously uninsured, however, according to the report.

More of them would move from other coverage, such as insurance purchased through the ACA’s health insurance marketplace. While federal subsidies in place through 2025 have lowered the price for low-income consumers buying coverage through the marketplace, the report says Medicaid coverage would offer them lower out-of-pocket expenses and somewhat more robust coverage.

The report also finds that accepting Medicaid expansion could have a larger impact in rural areas, where both the share of uninsured people and the share of people whose incomes fall in the range that Medicaid expansion targets are higher.

About 5% of Wisconsin’s population, or 290,000 people, have incomes between 100% and 138% of the poverty guideline — up to $20,783 for an individual and $35,632 for a family of three in 2024. A third of them are in the state’s three most urban counties: Brown, Dane and Milwaukee.

But in more than 25 rural or mostly rural counties, 6% or more of the residents are in that income range. In Monroe, Rusk and Forest counties, it’s more than 8%.

“In other words, when one considers the share of the population who might benefit from expansion, it becomes clear that the residents of rural counties would be impacted the most,” the report states.

Yet the group of people who are uninsured and the group with incomes of 100% to 138% of the federal poverty guideline don’t overlap much.

As many as 90.3% of state residents in that same income range already have “some form of health insurance coverage,” the report finds.

Those include employer-based insurance, Medicare, and people who have purchased insurance themselves. Just over half are already covered by Medicaid or another public program, according to the report.

“So though Medicaid expansion would decrease the uninsured population in Wisconsin, its impact on coverage levels would be more modest than some might assume,” the report states.

“The biggest surprise to me clearly was the penetration of Medicaid into this target population already in our state,” said Stein. “That was eye-opening to me.”

The higher rural share of both uninsured people and people whose incomes fit the Medicaid-expansion target have implications for the future of rural health care, he added.

“As the the problem of rural health care becomes more acute over time, as health care becomes more difficult to deliver, as the rural population at least in some parts of the state has fallen, and as the demographics of those areas change and people get older and more in need of health care, the question of rural health care becomes very important to us at the Forum, and I think should be important to policymakers and voters as well,” Stein said.

One possible outcome from expansion, the report says, would be to use funds from expanding Medicaid to increase Medicaid reimbursement rates that hospitals and other health care providers have complained are inadequate to cover the cost of care. But that would require specific action by the Legislature and the governor.

“There is an issue with Medicaid reimbursement rates that is important for policymakers to consider,” said Stein. “There is a potential for drawing more resources into the state with Medicaid expansion that could be used to address that first issue. But there’s no guarantee of that.”

 

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