The ACA Marketplace Plans Are Also in the Crosshairs

Medicaid cuts were in the spotlight as the massive tax-and-spending reconciliation bill made its way through Congress. But the One Big Beautiful Bill Act, as it is formally called, and recent rule changes by CMS will also mean major cuts in support of the Affordable Care Act (ACA) marketplace plans that have gone a long way toward making coverage affordable in the historically troubled individual market for health insurance: people who don’t have health insurance through an employer but who are not eligible for Medicare, Medicaid or other government-supported coverage. As many as 8 million people in the U.S. may lose health insurance because of changes implemented under the reconciliation bill and new CMS rules.

Pat Kelly

“It’s one more block of the Jenga tower being pulled out for 2026,” Pat Kelly, executive director of Your Health Idaho, that state’s health insurance marketplace, said during a webinar in June 2025 that was sponsored by KFF. “It will destabilize the healthcare ecosystem.”

The ACA coverage losses would come in addition to the 8 million people who are predicted to lose coverage due to Medicaid cuts. Changes under the reconciliation bill would result in 3.1 million people losing ACA coverage by 2034, according to the Congressional Budget Office. Rule changes would mean loss of coverage for 900,000 more people.

Expiration of the enhanced premium tax credits, put in place during the COVID-19 public health emergency, could mean another 4.2 million people will lose coverage through the ACA plans.

Sara Collins, Ph.D.

There seems next-to-no chance that the Trump administration or the Republicans in Congress will do anything to extend them. Without those larger tax credits, “premiums are expected to skyrocket” for the majority of people who get health insurance through the ACA, says Claire Heyison, M.P.H., senior policy analyst at the left-leaning Center on Budget and Policy Priorities. After the enhanced tax credits were put into place in 2021, enrollment in the ACA plans doubled, from 12 million to more than 24 million this year. Those larger credits “drove enrollment to record highs,” says Sara Collins, Ph.D., vice president for health care coverage and access and tracking health system performance at the Commonwealth Fund.

The situation is already causing uncertainty for health insurers, Michele Eberle, executive director of the Maryland Health Benefit Exchange, said during the KFF webinar.

Because they are unsure if the enhanced premium tax credit will be renewed, insurers are filing two sets of proposed rate increases for policies to be sold on ACA exchanges in 2026. Open enrollment is set to begin Nov. 1. In Maryland, if the increased tax credits are preserved, rates would rise an average of 6% to 7% for next year, Eberle said. Without the higher tax credits, rates would jump an average of 17%. “Without an act of Congress, there is going to be a lot of confusion,” she said.

The increased tax credits have lowered premiums by an average of
$705 per year for those who benefited from them, according to KFF. If they go away, the out-of-pocket costs of premiums will increase by
75% on average, and in some states they would more than double. Those with lower incomes, who are older or who live in states that have not expanded Medicaid are expected to be particularly hard hit, KFF said.

Among states most affected would be Florida, which has the largest ACA enrollment in the country, at more than 4.7 million. More than
2 million people in the state could lose coverage, says Cynthia Cox, M.P.H., vice president and director of the program on the ACA for KFF. In Texas, almost 2 million would lose coverage, and in Georgia, about 700,000, according to Cox.

Faced with higher premiums, healthier adults are more likely to take a risk and not pay for health insurance, while those who are sicker or at higher risk for health issues are more likely to keep their coverage. The dynamic of those likely to use services electing to stay in the insurance pool is called adverse selection, which tends to drive up premiums. But, notes Kelly, “when you’re uninsured, you don’t magically stay healthy, adding that people still need and want healthcare. “ These are people who are hardworking individuals. This is going to create
barriers for them.”

CMS rule

Although the experts predict that premiums will rise, the CMS issued a rule in late June that it said would reduce premiums by an average of 5% and save taxpayers up to $12 billion next year by reducing wasteful spending and tackling the increase in improper enrollments in health insurance exchanges. “We are strengthening health insurance markets for American families and protecting taxpayer dollars from waste, fraud and abuse,” HHS Secretary Robert F. Kennedy, Jr., said in a press release. “With this rule, we’re lowering marketplace premiums, expanding coverage for families, and ensuring that illegal aliens do not receive taxpayer-funded health insurance.” CMS says that the enhanced premium tax credits, improper enrollments and weaker verification process “have triggered widespread fraud.” The CMS press release cites the Paragon Health Institute, which says it is nonpartisan but is widely viewed as promoting conservative health policies. Paragon says that in 2024,
5 million people “may have been improperly enrolled” in ACA plans, “costing taxpayers as much as $20 billion.”

Heyison says that most of the fraud in the ACA individual market is committed by insurance agents and brokers who sign people up for ACA coverage without their consent or switch their plans without their knowledge. Fraud is more prevalent in the healthcare exchanges run by the federal government than in state-operated exchanges, Heyison says.

CMS received more than 183,000 complaints of unauthorized enrollments and almost 91,000 of unauthorized switching of plans sold on HealthCare.gov between January and August 2024, KFF reported. As a result, CMS suspended 850 brokers suspected of fraud or abusive behavior. CMS said that in July 2024, in the last year of the Biden administration, it would block agents and brokers from changing a person’s enrollment on HealthCare.gov unless they had previously helped the person with enrollment.

The CMS rule issued in June includes provisions that repeal the special enrollment period for people with incomes at 150% of the federal poverty level or lower and increase eligibility verification requirements. The budget bill includes such provisions as shortening the open enrollment period and ending
automatic re-enrollment.

Some people “might lose coverage because of paperwork burdens,” Cox said. In a prepared statement, Bobby Mukkamala, M.D., president of the American Medical Association, said the changes and proposed changes “create new barriers to enrollment, weaken coverage standards, and reduce affordability. … These cuts will disproportionately harm individuals with chronic conditions and middle- to lower-income Americans who depend on … APTCs [advanced premium tax credits] to maintain their health coverage.”

Although they may yield short-term budget savings, “the long-term consequences — higher healthcare costs, increased uncompensated care and worse outcomes for patients — make this a deeply concerning development for physicians and our patients,” Mukkamala added. AHIP, the health insurance trade industry group, joined the chorus of those criticizing the health insurance cutbacks: "At a time when Americans are looking for stability and certainty with their healthcare, the latest budget proposal would jeopardize the coverage and access to care that millions of Americans rely on in Medicaid and the individual market.” The changes “can be a financial catastrophe for people who are trying to do the right thing,” Kelly says. “The changes are not popular,” adds Heyison. “Members of Congress are going to be facing pushback from constituents.”