The Trump administration seems to be veering away from maintaining Obamacare and instead finding its own alternatives to making health insurance more affordable.
Rather than extending the Affordable Care Act (ACA) subsidies, the administration has instead been slashing drug prices and giving Americans access to pay for drugs on a new website with cheaper rates, while proposing health savings accounts.
There was a vote to decide if the ACA subsidies should be extended on December 11, but the Senate rejected the health care bills brought forward by both parties, steering the U.S. toward steep premium cost hikes in the new year.
So, as the future of Obamacare seems to be fading, and many will likely be pushed off the ACA Marketplace because of major premium cost increases, Newsweek has spoken to a number of experts about Obamacare and whether it is truly on its way to collapse.
Why It Matters
Obamacare, officially known as the ACA, was passed by former President Barack Obama and included the implementation of the enhanced tax credits that gave more Americans access to private health insurance plans compliant with ACA on the Marketplace, who may not have had access to other kinds of insurance like Medicaid, Medicare or employer-provided insurance.
The subsidies apply to those with household incomes between 100 percent and 400 percent of the federal poverty level, and most of the Americans relying on them are students, workers in small businesses, those who are self-employed and those who are retired.
What Contributes to a Possible Collapse of Obamacare?
After the Senate’s rejection of the health bills on December 11, it is now likely that the enhanced tax credits will expire at the end of the year—and this is of notable concern to many.
“The main thing that could lead to collapse would be massive scaleback in the generosity of the subsidies to those on the exchange and a sharp reduction in Medicaid eligibility,” Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, told Newsweek,
Without the subsidies, Americans will on average see premiums go up by 20 percent.
Dr. Benjamin Sommers, a professor of health care economics and medicine at Harvard University, told Newsweek that if the enhanced subsidies expire, which he said “seems likely,” it will lead to “several million people becoming uninsured because they can’t afford Marketplace coverage anymore, and millions more will pay much higher premiums.”
Although, he said this would return the ACA to the level of subsidy it had for the first five years of the program, and at that time, it was “still a fairly successful program at covering people.”
He said that other changes from the Trump administration will also “take a toll” and likely lead to coverage losses, as previous Harvard research has shown.
These changes include “shortening the enrollment period, reducing outreach spending, and making it harder for people to stay enrolled each year,” he said.
Medicaid cuts also impact Obamacare, as “a lot of the coverage under the ACA was through Medicaid,” David Cutler, a professor of applied economics at Harvard University, told Newsweek.
But, while Trump’s ‘One Big Beautiful Bill’ (OBBB) does “cut hundreds of billions of dollars out of Medicaid expansion, it didn’t eliminate it completely,” Sommers said.
Sommers added that unless there is a “full repeal in Congress,” he said he didn’t “see any situation in which the ACA will fully collapse.”
However, he said that he didn’t want to “minimize the harms that the Trump administration and the OBBB are going to cause to health insurance coverage in the U.S.”
“Millions will lose coverage, some safety net hospitals and providers will struggle to stay open, and yes, some people will likely die from lack of affordable medical care,” he said.
The Congressional Budget Office (CBO) projected in 2017 that more than 25 million Americas would lose insurance if Obamacare collapsed, Gruber said.
According to recent numbers, as of 2024, the ACA provided insurance to roughly 45 million Americans, Sommers said, adding that it “has become a critical part of the health care landscape in the U.S., with evidence that it is improving health and saving lives.”
Americans losing health insurance coverage also has wider ripple effects.
Timothy Jost, a professor of law at the Washington and Lee University, told Newsweek that “to the extent these people become uninsured, it will raise the cost for everyone else in the insurance market, including people with employer based coverage.”
He also said that the health savings accounts, proposed by Republicans as an “alternative,” are a way to “help wealthier people save money tax-free.”
“They are not a way to provide health coverage for people with serious medical needs,” he said.
How Likely Is a Collapse?
There is some division among experts over whether it is likely Obamacare could collapse.
Sara Rosenbaum, a professor of health law and policy and founding chair of the Department of Health Policy at George Washington University, told Newsweek that it is “entirely possible that the administration and Congressional opponents of the ACA could so damage the marketplace that insurers will no longer find it feasible to offer comprehensive health coverage because the risk pool is not there to support it—that is, younger, healthier people.”
She said that this could result in insurers moving catastrophic plans linked to health savings accounts.
“The market simply cannot run without healthy tax credits,” she said. “No one seems to point out ever that the tax credit system is simply a replica of the heavily tax-supported system that undergirds the employer insurance market for Americans fortunate enough to work for employers who offer insurance.”
Others have said it is not likely to collapse.
“The law is now highly popular and I don’t think there is an appetite to fight that battle again,” Gruber said.
Cutler said that he thought the “entirety of the ACA will not collapse, but some parts might.”
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