Understanding the GOP’s Cuts in Support to Subscribers in the Exchanges (Covered California)
The Affordable Care Act (also known as ObamaCare) increased health coverage to uninsured Americans 1) through Medicaid expansion and 2) through premium assistance to individuals purchasing individual coverage in the Exchanges. As a result, the percentages of uninsured Americans have fallen by about 50% from close to 16% to close to 8%. There are still about 25 million uninsured Americans. https://www.kff.org/uninsured/key-facts-about-the-uninsured-population/
Mostly, those who are still uninsured are the working poor who cannot afford the coverage through the Exchanges even with premium assistance, or the very poor who live in the 10 hold-out states like Texas and Florida who have steadfastly refused to expand Medicaid despite the 90/10 federal Medicaid match being offered for the Medicaid Expansion. https://www.shadac.org/news/15-years-affordable-care-act-more-americans-ever-have-health-insurance-coverage The uninsured rates are now far lower in the 41 Medicaid expansion states (7.6%) than in the 10 non-expansion states (14.1%). https://www.kff.org/uninsured/key-facts-about-the-uninsured-population/
Under the ACA as adopted in 2010 and implemented in 2014, people buying individual coverage in the Exchanges can be eligible for premium assistance and cost sharing reductions to help them afford health coverage and health care, depending on their incomes and the amount of their premiums. In 2021, the House and Senate passed, and President Biden signed, and then they renewed “enhanced premium assistance” to help the working class better afford their health coverage in the Exchanges. That enhanced premium assistance is now in jeopardy because the Trump Administration and the GOP are refusing to extend the subsidies (refundable tax credits) which are scheduled to expire in 2025.
Who will be hurt and how? 1) Individuals with high costs of health insurance, 2) individuals with low to moderate incomes and 3) middle-income middle-aged individuals and families. Individual health insurance premiums are based on your age and family composition; basically, the older you are, the higher your premiums; the more people in your family, the higher your premiums. Thus, all things being equal you will be eligible for higher premium assistance depending on your income, age, and family composition, and you are likely to be hurt badly by the decisions of Trump and the GOP.
Premium assistance and cost sharing reductions are linked to your income; the lower your income, the more help you will get through premium assistance and cost sharing reductions. When the Trump Administration and the GOP controlled Congress have declined to extend “enhanced premium assistance”, they will be hurting subscribers quite badly. They will also be hurting middle-income middle-aged subscribers (in the 400-600% of FPL bracket) who will lose their eligibility for premium assistance entirely.
Premium assistance and cost sharing reductions are also linked back to your choice of plan and of level of coverage. The linkage is to the second lowest cost silver plan. Basically if you choose more expensive plans, you pay more, and if you choose plans and coverage less costly than the second lowest price silver, you will pay a lower monthly premium. Silver means that it pays 70% of the average expected medical costs, you would pay the rest in the form of copays and deductibles when you seek and receive your covered benefits.
Enrollment in both the federal and state exchanges more than doubled between 2020 and 2025. https://www.cms.gov/files/document/health-insurance-exchanges-2025-open-enrollment-report.pdf Some of the fastest, recent enrollment growth was in states like Louisiana, Kentucky and West Virginia. Between 2020 and 2025, the most explosive enrollment growth in the Exchanges occurred in states like Texas, Florida, Ohio and Tennessee. https://www.cms.gov/files/document/health-insurance-exchanges-2025-open-enrollment-report.pdf The impacts of Trump and the GOP’s decision will be particularly onerous in “red” states and even worse in the Medicaid non-expansion red states.
The subscribers who will be hurt the most by the GOP’s refusal to extend enhanced premium assistance will be lower and moderate-income working families, middle-aged and middle income workers, and the self-employed. https://www.kff.org/uninsured/key-facts-about-the-uninsured-population/
Enhanced premium assistance program helps working families and the self employed at all income levels from 100% of the Federal Poverty Level ($15,650 for an individual) to 600% of FPL ($93,900 for an individual) who purchase through either the state or federal Exchanges. https://aspe.hhs.gov/sites/default/files/documents/dd73d4f00d8a819d10b2fdb70d254f7b/detailed-guidelines-2025.pdf Enhanced premium assistance reduced the premiums for subscribers with incomes below 150% of FPL ($23,475 for an individual) to $0. For the first time, it offered premium assistance to subscribers with incomes between 400% of FPL ($62,600 for an individual) and 600% of FPL ($93,900 for an individual). And it increased federal premium assistance for all individuals with incomes between 150% of FPL ($23,475 for an individual) and 400% of FPL ($62,600) to counteract the rise in inflation and health costs that were hurting low, moderate and middle income families. It is important to understand that in the 10 non-expansion states like Texas and Florida, people with incomes between 100 and 133% of FPL are eligible for premium assistance in the Exchanges. In the 41 Medicaid expansion states, people with incomes between 100 and 133% of FPL are eligible for Medicaid and not for the Exchanges.
Why do we need premium assistance in the Exchanges? Since at least 2005, the average cost of family health coverage was higher than the minimum wage, and ever since the situation has worsened as health insurance premiums have steadily outpaced the growth in worker’s wages., https://www.commonwealthfund.org/publications/newsletter-article/health-insurance-premiums-rising-faster-workers-wages-study-finds Let’s repeat that the cost of family health insurance premiums are higher than the minimum wage and getting worse every year. Many Americans have their coverage through their employer; the employer pays on average 80% of individual coverage and 70% of family coverage; this varies widely by state and by types of employer. https://www.kff.org/private-insurance/state-indicator/family-coverage/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D Employment based coverage is subsidized by favorable federal and state tax treatment; this is highly beneficial to high wage workforces like the financial services industry, but far less so for the low wage workforces like agriculture. https://taxpolicycenter.org/briefing-book/how-does-tax-exclusion-employer-sponsored-health-insurance-work
Almost all subscribers in the Exchanges have no employment-based coverage for a variety of reasons: such as self-employed, employer does not offer coverage at all, employer does not offer coverage to their class of employment, new hire in probationary period, laid off, part time, or disabled and in the 24 month wait for Medicare to begin. A few are eligible because their employee share of the costs of their employment-based coverage is so high that it is unaffordable.
What can be done?
1. Write your congressperson and your senator and encourage them to extend “enhanced premium assistance”. The timing is now!!
2. Vote them out of office in 2026 if they do not vote to extend enhanced premium assistance in the Exchanges in 2025. This should be part of a bi-partisan agreement necessary to fund the government; the deadline is October 1, but may be extended.