GOP faces 'big, beautiful' blowback risk on ObamaCare subsidy cuts
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Medicaid cuts have largely dominated the focus of those disparaging the Republican’s broad tax cuts legislation, yet the GOP’s choice not to renew enhanced ObamaCare subsidies might have a more direct effect as the midterms loom next year. 

The additional subsidies introduced during the coronavirus pandemic are due to conclude at the year’s end, with little indication that Republicans are eager to address the matter. 

To date, only Sens. Lisa Murkowski (R-Alaska) and Thom Tillis (R-N.C.) have spoken publicly about wanting to extend them. 

The lack of an extension in the “big, beautiful bill” was particularly striking considering the extensive modifications it brings to the health care system, presenting Democrats with a straightforward message: Should Republicans in Congress allow the subsidies to lapse by year’s end, it will lead to premium hikes, potentially leaving millions without health insurance across the nation. 

In a statement released last month as the House was debating its version of the bill, House and Senate Democratic health leaders pointed out what they said was GOP hypocrisy. 

“Their bill extends hundreds of tax policies that expire at the end of the year. The omission of this policy will cause millions of Americans to lose their health insurance and will raise premiums on 24 million Americans,” wrote Senate Finance Committee ranking member Ron Wyden (D-Ore.), House Ways and Means Committee ranking member Richard Neal (D-Mass.) and House Energy and Commerce Committee ranking member Frank Pallone (D-N.J.). 

“The Republican failure to stop this premium spike is a policy choice, and it needs to be recognized as such.” 

More than 24 million Americans are enrolled in the insurance marketplace this year, and about 90 percent — more than 22 million people — are receiving enhanced subsidies.  

“All of those folks will experience quite large out-of-pocket premium increases,” said Ellen Montz, who helped run the federal ObamaCare exchanges under the Biden administration and is now a managing director with Manatt Health. 

“When premiums become less affordable, you have this kind of self-fulfilling prophecy where the youngest and the healthiest people drop out of the marketplace, and then premiums become even less affordable in the next year,” Montz said. 

The subsidies have been an extremely important driver of ObamaCare enrollment. Experts say if they were to expire, those gains would be erased.  

According to the Congressional Budget Office (CBO), 4.2 million people are projected to lose insurance by 2034 if the subsidies aren’t renewed.  

Combined with changes to Medicaid in the new tax cut law, at least 17 million Americans could be uninsured in the next decade. 

The enhanced subsidies increase financial help to make health insurance plans more affordable. Eligible applicants can use the credit to lower insurance premium costs upfront or claim the tax break when filing their return.  

Premiums are expected to increase by more than 75 percent on average, with people in some states seeing their payments more than double, according to health research group KFF. 

Devon Trolley, executive director of Pennie, the Affordable Care Act (ACA) exchange in Pennsylvania, said she expects at least a 30 percent drop in enrollment if the subsidies expire. 

The state starts ramping up its open enrollment infrastructure in mid-August, she said, so time is running short for Congress to act. 

“The only vehicle left for funding the tax credits, if they were to extend them, would be the government funding bill with a deadline of September 30, which we really see as the last possible chance for Congress to do anything,” Trolley said. 

Trolley said three-quarters of enrollees in the state’s exchange have never purchased coverage without the enhanced tax credits in place.  

“They don’t know sort of a prior life of when the coverage was 82 percent more expensive. And we are very concerned this is going to come as a huge sticker shock to people, and that is going to significantly erode enrollment,” Trolley said.  

The enhanced subsidies were first put into effect during the height of the coronavirus pandemic as part of former President Biden’s 2021 economic recovery law and then extended as part of the Inflation Reduction Act. 

The CBO said permanently extending the subsidies would cost $358 billion over the next 10 years. 

Republicans have balked at the cost. They argue the credits hide the true cost of the health law and subsidize Americans who don’t need the help. They also argue the subsidies have been a driver of fraudulent enrollment by unscrupulous brokers seeking high commissions. 

Sen. Bill Cassidy (R-La.), chair of the Senate Health, Education, Labor and Pensions Committee, last year said Congress should reject extending the subsidies. 

The Republican Study Committee’s 2025 fiscal budget said the subsidies “only perpetuate a never-ending cycle of rising premiums and federal bailouts — with taxpayers forced to foot the bill.” 

But since 2020, enrollment in the Affordable Care Act marketplace has grown faster in the states won by President Trump in 2024, primarily rural Southern red states that haven’t expanded Medicaid. Explaining to millions of Americans why their health insurance premiums are suddenly too expensive for them to afford could be politically unpopular for Republicans.  

According to a recent KFF survey, 45 percent of Americans who buy their own health insurance through the ACA exchanges identify as Republican or lean Republican. Three in 10 said they identify as “Make America Great Again” supporters. 

“So much of that growth has just been a handful of Southern red states … Texas, Florida, Georgia, the Carolinas,” said Cynthia Cox, vice president at KFF and director of the firm’s ACA program. “That’s where I think we’re going to see a lot more people being uninsured.” 

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