Worse than forecast: Pending cost increases for ACA marketplace enrollees

 Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up.

KFF data and analysis is essential to anyone seeking to understand the U.S. healthcare system. It’s copious, reliable, and clearly presented. But inevitably, it’s not always up to date.

In late 2024, KFF posted a calculator estimating how much more ACA marketplace enrollees at any income, income and family size would pay for coverage in 2026 if the subsidy enhancements created by the American Rescue Plan Act (ARPA) are allowed to expire (they are funded only through 2025). If the ARPA subsidy schedule expires, which appears near-certain at this point, the subsidy schedule will revert to the pre-ARPA formula used through OEP 2021, adjusted by an annual inflation factor.

When the calculator was created, the subsidy schedule for 2026 was unpublished, and KFF used estimates created by CBO and the JCT in June 2024 (see p. 9 here). Last month, the IRS published the subsidy schedule for 2026, and the CBO estimates turn out to have been quite low. At higher incomes, the actual percentage of income required to buy the benchmark (second cheapest silver) plan is more than a full percentage point higher than CBO estimated (e.g., 9.96% of income at an income of 300% of the Federal Poverty Level (FPL) vs. the CBO estimate of 8.65%).

Percentage of income required to purchase a benchmark silver plan at different income levels in Plan Year 2026: Actual vs. KFF/CBO 2024 estimate

Sources: IRS, KFF, CBO. See note at bottom for the ARPA enhanced subsidy schedule.

In Texas Obamacare, a gold patch on the loss of enhanced subsidies

Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up.

CMS to Texas: Who told you to put the balm on?

 As expiration of the enhanced ACA premium subsidies created by the American Rescue Plan Act (ARPA) at the start of Plan Year 2026 looms, it’s worth considering the extent to which strict silver loading may mitigate the sharp premium increases resulting from reversion to the ACA’s original subsidy schedule. Here we’ll take a look at how a market in which gold plans are priced way below silver in 2025 is likely to play out in 2026.

20 attorneys general sue to keep health centers, Head Start and other programs open to all

Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up.

Hey kids -- what's your immigration status?

20 state attorneys general (including DC’s) have sued the Dept. of Justice, Dept. of Health and Human Services, Dept. of Education and Dept. of Labor seeking to void a series of orders issued in mid-July that abruptly ended a host of social programs’ exemptions from a federal ban on serving broad categories of immigrants, both lawfully present and undocumented. The ban was established by the so-called Personal Responsibility and Work Opportunity Act (PRWORA), enacted in 1996.

The complaint documents that programs decreed this month to have suddenly lost their exemption from PRWORA’s limiting of benefit eligibility to citizens and “qualified aliens” have been excepted based on rules put in place as soon as PRWORA was enacted in 1996. Many exempted programs, such as the community health center, drug treatment, and Head Start programs, are premised on not checking beneficiaries’ immigration status, and some (e.g., the CHCs) are required by statute not to check immigration status. 

Trump admin newly excludes many immigrants from a host of benefits

 Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up.

CHC in Davenport, Iowa

Over the weekend, I learned third-hand that employees at a network of Federally Qualified Health Centers (FQHCs) in New Jersey had been told by management that the feds had forbidden them to treat undocumented immigrants.

That conclusion may be somewhat premature, but it’s grounded in abrupt and sweeping administrative action. In its latest barbaric assault on immigrants, the Trump administration has issued a series of orders banning access to most of the narrow range of federally funded benefits and programs not already off-limits to the undocumented - or to the many categories of lawfully present immigrants who are not “qualified aliens” (i.e., green card card holders, refugees, asylees and a few other categories*).

On July 10, three federal agencies — HHS, DOL and Education — issued notices (here is HHS’s) cutting off access for most non-green-card-holding immigrants to various benefits and services that had been excepted from a sweeping ban established in 1996. HHS’s list of benefits that will lose excepted status is as follows: 

Mitigating the Medicaid cuts

Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up.

Look for the helpers

The enactment of the Republicans’ monstrous budget bill in one sense sets politics and policy at odds, at least for Democrats. Annie Karni, congressional report for The New York Times, frames a political problem for Dems:

A challenge for Ds who expect the passage of this bill to help them win elections is that it may take a while for people to feel the full negative effects. Rs front loaded some temporary tax cuts for working people and backloaded cuts to Medicaid to hit after the midterms.

As KFF’s Larry Levitt points out in response, funding cuts and some impediments to enrollment in the ACA’s private-plan marketplace kick in immediately or almost immediately, i.e., for OEP 2026, beginning Nov. 1 this year (and Charles Gaba has tallied provisions in both Medicaid and marketplace that will take effect before the midterms). That said, Republicans will of course exploit the time lag, which extends to other benefit cuts as well (SNAP, student loans, energy credits), using it to add plausibility to their claims that, as MAGA go-along Tom Kean Jr. (NJ-7) boasted, “we protected Medicaid for every intended beneficiary in New Jersey and across the country.” That is, the bill does not change Medicaid eligibility for anyone (except various classes of lawfully present noncitizens, who are just human waste in Republican parlance). Instead, Republicans set up a thicket of administrative enrollment impediments and cuts to state funding (mostly delayed) that will increase the uninsured population by some 12 million by CBO’s estimate (with another 4 million losing coverage due to Republicans’ refusal to extend the enhanced ACA marketplace subsidies funded through 2025*). If enrollment reductions on that scale don’t happen — as many Republicans claim — neither will the cuts to federal spending that help fund the bill’s gargantuan tax cuts.

All that said, I’d like to consider Democrats’ alleged political “challenge” from the opposite end of the telescope. To what extent can Democrats in state government — and, more speculatively, in Congress — mitigate the coverage and funding losses? Administrative barriers can be erected with steel or Styrofoam — though Trump’s CMS, led by people whose chief passion in life is to ensure that someone somewhere doesn’t get a benefit to which they’re not technically entitled**— will doubtless work to insist on steel. If Democrats take the House, they may be able to delay or reduce some spending cuts — the annual ratchet-down of the provider tax safe harbor, for example, strikes me as the kind of thing Congress is prone to pause.

Republicans make the "abled-bodied" vulnerable

Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up. 

Community engagement requirements for the "able-bodied"

Republican legislators who wrote the Medicaid provisions of their monstrous megabill are acting on a simple belief: low-income nonelderly adults who lack access to affordable employer-sponsored health insurance should not have access to affordable health coverage.

While their $900 billion* in cuts to federal spending on Medicaid over ten years will hurt all classes of Medicaid enrollees, the cuts are aimed primarily at low-income adults insured through the ACA Medicaid expansion — that is, adults under age 65 who are not recognized as disabled by the federal government (though many have varying degrees of disability**). Some cuts not aimed directly at the ACA expansion population target states that have enacted the expansion.

Provider tax cut aimed at expansion states

The major new spending cut added by the Senate Finance Committee to the House package last week is a case in point. Section 71120 would sharply reduce the revenue that Medicaid expansion states derive from “provider taxes,” a financial maneuver, allowed for decades, that all states except Alaska employ to boost Medicaid revenue and fund services. Under current law, states are allowed to hold taxed healthcare providers “harmless” if the taxes don’t exceed 6% of revenue — that is, they can boost payment to an amount equivalent to the revenue collected. Since the federal government pays its standard Medicaid share of the resulting new spending, varying from 50-77% by state, states can use the federal share to further boost spending. Most such taxes are imposed on nursing homes (46 states) and hospitals (45 states).

That financial maneuver is a classic American “kludge” — a workaround chronic Medicaid underfunding initiated by state governments and accepted by CMS. A responsible legislature looking to end such haphazard, convoluted funding mechanisms might replace the revenue from them, built into state budgets, with a more rational funding source. The House bill put a ban on new provider taxes, leaving current arrangements in place. The Senate Finance Committee takes a deep slice out of the revenue, cutting current taxes — but only for Medicaid expansion states. For those states, the “safe harbor” under which hospitals and other providers can be held harmless is cut by 0.5% per year from the current 6% until it hits a floor of 3.5% (nursing homes are exempted from the lower threshold).

As Georgetown’s Edwin Park notes (citing KFF data), at present 18 expansion states imposes taxes on hospitals above the 3.5% future safe harbor, and some of those states explicitly earmarked that revenue*** to fund the state’s share of the cost of enacting the ACA Medicaid expansion— potentially endangering maintenance of the expansion in those states if this provision is enacted. At the same time, six of the ten nonexpansion states (Alaska, Kansas, Mississippi, South Carolina, Tennessee and Texas) impose taxes on hospitals greater than 3.5% and would be exempt from this cut.

Republicans' hands-free healthcare cuts: Make enrollees self-deport from Medicaid and Obamacare

Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up. 

Third and probably last in a series from me at nj.com. Gift link.
Why N.J.’s Republicans in Congress are OK with 16M Americans losing insurance

Republicans poised to halve the ACA cake and eat it

Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up.

There’s a sad symmetry to the Congressional Budget Office’s final estimate of the coverage effects of the healthcare provisions in the monstrous megabill that passed the House with no Democratic votes on May 22.

In March 2011, CBO estimated that by 2021, the ACA would reduce the uninsured population by 34 million — 17 million via Medicaid, and 17 million via the subsidized ACA private-plan marketplace. (Below, note the net gain in the individual market: 24 million enrolled in the exchanges established by the ACA, minus 6 million in the off-exchange market and another 1 million in employer-sponsored plans.)

After waves of political upheaval, including a major boost to marketplace subsidies in 2021 (now apparently doomed to expire at year’s end), those estimates look pretty good. In Medicaid, 16.6 million enrollees as of June 2024 (the last available tally) were rendered eligible solely by the ACA expansion, and total Medicaid enrollment as of January 2025 is up by 22 million over the last pre-ACA total. As for the marketplace, enrollment as of the end of Open Enrollment 2025 was 24.3 million, with perhaps another 2 million off-exchange, compared to total individual market enrollment of 10.6 million pre-ACA, by KFF’s estimate.

Today, in a narrative breakdown of its estimates sent to ranking Democrats in the key House and Senate committees, CBO forecasts an increase of 16 million uninsured people triggered by the House bill coupled with Republican refusal to extend the ACA subsidy increases enacted in 2021 and funded only through 2025. Like the coverage gains triggered by the ACA, these coverage losses would split almost evenly between coverage losses triggered by the bill’s changes to Medicaid and its changes to rules governing the ACA marketplace. Here is the breakdown:

Changes to Medicaid are forecast to increase the uninsured population by 7.8 million, and changes to the ACA marketplace, by 8.2 million.

A multi-pronged assault on health coverage for immigrants

Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up.

You look able-bodied -- and you want health coverage?

6/4/25: See updates/corrections below regarding marketplace eligibility for immigrants subject to the 5-year bar for Medicaid eligibility, along with CBO estimates of coverage losses among immigrants in the ACA marketplace.

There is so much to lament in the healthcare provisions included in the legislative monstrosity that passed the House with no Democratic votes on May 22. By CBO’s conservative estimate, provisions affecting Medicaid and the ACA marketplace will reduce spending by about $900 billion over ten years and increase the uninsured population by about 11 million — 15 million if you count Republicans’ refusal to extend the enhanced ACA premium subsidies created by the American Rescue Plan and funded only through 2025.

Reliable scholars have detailed the likely effects of Draconian work reporting requirements and more frequent redeterminations in Medicaid, and of the miles of red tape wrapped around prospective ACA marketplace enrollees, which impose unsustainable cost and risk on many enrollees (Jonathan Cohn has just published a painfully good overview of the bill’s assault on the marketplace).

Here I want to focus on the legislative aggression unleashed on immigrants — lawfully present as well as undocumented.

With ARPA subsidies set to expire, a window on the ACA's off-exchange market

 Note: All xpostfactoid subscriptions are now through Substack alone (still free), though I will continue to cross-post on this site. If you're not subscribed, please visit xpostfactoid on Substack and sign up.

A press release from New Jersey’s Department of Banking and Insurance (DOBI) urging Congress to extend the enhanced ACA marketplace subsidies created by the American Rescue Plan Act (ARPA) in 2021, which are funded only through this year, led me to discover that DOBI has resumed quarterly tracking of off-exchange as well as on-exchange enrollment, after a long hiatus (1-2 years?). Reports are now available through Q2 2024.

In general, nationally, off-exchange enrollment data is spotty, and the off-exchange enrollment numbers in NJ open a window into how expiration of the ARPA-enhanced subsidies, which Republicans are unlikely to extend, may affect those with income above 400% FPL, the once and likely future cap on subsidy eligibility. In the Open Enrollment Period (OEP) for 2021, the last year with the 400% FPL cap on income eligibility, 43% of state enrollees in ACA-compliant plans were unsubsidized. In 2024, just 25% were unsubsidized. We will probably soon be back to 40%-plus.