Democratic senators are demanding that the expansion of health insurance subsidies be included in the new budget before they vote on it. The subsidies are another part of the social safety net that the Trump Administration is scheduled to reduce drastically. The subsidies are a part of the Affordable Care Act (ACA) that President Obama passed in 2010.
There were three main goals of the ACA: 1. Expand health insurance so that more Americans had coverage; 2. Put an end to insurance companies discriminating against people who need treatment by stopping insurance companies from refusing to renew or sell health insurance to those who had “preexisting conditions” and putting an end to “caps” on coverage. No longer would someone’s health insurance be cancelled because they had a previous illness; and 3. require health insurance companies to spend at least 80% of the money it brings in on health services.
Under the ACA, Medicaid coverage was expanded to 138% of the federal poverty level, and subsidies were provided to those making more to help cover the costs. For many people, even with the subsidies, health insurance was too expensive.
Despite President Trump’s campaign promise to develop a better, less expensive healthcare plan, there were no improvements during his first term. President Trump made several announcements stating that the new plan was nearly ready and would be significantly improved, but he never released the plan.
The COVID-19 shutdown created challenges to Americans’ health insurance. As a country where the majority of people receive health insurance through their employment, layoffs also end their health insurance. More than 31 MILLION people filed for unemployment insurance between March 1, 2020, and May 2, 2020. 78 MILLION people lived in a family in which someone lost a job.
Before becoming unemployed, the majority had health insurance through their employer.
- 61% were covered by health insurance through their employer
- 17% had Medicaid
- 9% were uninsured
- 7% had direct purchase (marketplace) coverage
- 6% had other coverage, such as Medicare or military coverage
When President Biden took office, one of his key priorities was expanding Medicaid to cover more Americans and increasing subsidies for individuals not receiving health insurance through their employment. To secure the 50 votes in the Senate that were needed, the Affordable Care Act’s increased subsidies were set to expire at the end of this year. The increased subsidies are tax credits introduced in 2021 and later extended through the end of 2025 by the Inflation Reduction Act. The larger credits both increased the amount of financial assistance that already eligible ACA Marketplace enrollees received and offered the credits to middle-class people. If the increased benefits are allowed to end, thousands of working people will no longer be able to afford health insurance.
“Based on the earlier federal data and more recent other publicly available information, KFF now estimates that if Congress extends enhanced premium tax credits, subsidized enrollees would save $1,016 in premium payments over the year in 2026 on average. In other words, the expiration of the enhanced premium tax credits is estimated to more than double what subsidized enrollees currently pay annually for premiums — a 114% increase from an average of $888 in 2025 to $1,904 in 2026. The average premium payment net of tax credits among subsidized enrollees held steady at $888 annually in 2024 and 2025 due to the enhanced premium tax credits.
For individuals who do not obtain their insurance through the marketplaces, there will still be a cost associated with ending the subsidies. People who will no longer be able to afford health insurance will end up in emergency rooms getting treatments that they can not afford. These uncollectable costs drive up the hospital’s costs and create upward pressure on all health insurance premiums.
President Trump and his administration are claiming that Democrats should trust the President to solve the problem later, after the budget is passed. There has been no explanation as to why the problem wasn’t fixed during his first term or his second term. No plan has been put forth. If the past is the best predictor of the future, there is no reason to believe that the Affordable Care Act will be defended, improved, or made more affordable unless the Trump Administration is forced to do so.
Our reporters sit through hours of city council meetings, dig through piles of documents, and ask tough questions other media overlook. Because we’re committed to addressing Philadelphia’s poverty crisis — and challenging those who sustain it. If you think this work is important too, please support our journalism.
We’re counting on readers like you.
