Congressional Republicans’ proposals threaten Americans’ health care affordability on two fronts: by slashing Medicaid funding and by allowing the enhanced Affordable Care Act (ACA) premium tax credits to expire. As a result, their plan would strip Medicaid coverage from millions of people and increase marketplace premiums for millions more. Together, these dual threats would upend 15 years of progress toward expanding coverage and lowering health care costs, threatening the financial security of countless American families.
A new analysis by the Center for American Progress Action Fund finds that ACA health insurance marketplace premium costs will increase by thousands of dollars in 20 congressional districts if Congress enacts cuts that lead states to eliminate their Medicaid expansions and fails to extend the enhanced premium tax credits beyond 2025.
Dual threats to health care affordability
Congress is weighing a budget reconciliation package that would impose the largest Medicaid cuts in the program’s history. Republican House leaders, including House Speaker Mike Johnson (R-LA) and Energy and Commerce Chair Brett Guthrie (R-KY), are proposing to cut federal matching funds—known as the federal medical assistance percentage (FMAP)—for the ACA’s Medicaid expansion population and to impose work reporting requirements on Medicaid enrollees. Both measures would jeopardize coverage and endanger lives. If the FMAP for Medicaid expansion enrollees drops below the current 90 percent, it could force at least 12 states to roll back their Medicaid expansions, stripping millions of people of coverage and driving up marketplace insurance premiums.
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At the same time, the ACA’s enhanced premium tax credits are at risk. Originally enacted through the American Rescue Plan and later extended by the Inflation Reduction Act, the enhanced tax credits significantly lowered marketplace coverage costs for millions of Americans. The enhanced tax credits eliminated silver benchmark plan premiums for people with household incomes between 100 and 150 percent of the federal poverty level (FPL) and provided savings for middle-income households earning above 400 percent of the FPL—households that were previously ineligible for financial assistance—by capping their silver benchmark plan premiums at no more than 8.5 percent of their income. In 2024, the enhanced tax credits lowered premium payments by about 44 percent compared with the original ACA tax credits, saving eligible enrollees roughly $700 annually and helping boost marketplace enrollment to a record 24 million people in 2025.
If Congress fails to extend the enhanced tax credits beyond this year, middle-income families will lose access to vital financial assistance that helps them afford their marketplace premiums. Roughly 20 million people across income levels would face steep premium hikes starting in 2026, leading to nearly 4 million more Americans becoming uninsured by 2027.
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When people lose Medicaid, they often have no affordable coverage alternative. Many Medicaid enrollees work for small firms or in part-time or low-wage jobs that do not offer employer-sponsored insurance. Private insurance plans are similarly unaffordable, with out-of-pocket costs that are significantly higher than the cash savings many households have available. Although the enhanced ACA tax credits have helped many people afford marketplace plans, tax credits are still generally not available for individuals with family incomes below 100 percent of the FPL; and congressional Republican inaction could allow the enhancements to expire altogether in 2026.
Marketplace premiums would increase by thousands
If Congress fails to extend the enhanced ACA tax credits, KFF projects that monthly premiums net of tax credits would rise by more than 75 percent. Marketplace enrollees in all 50 states would be affected by this increase. Enrollees in Medicaid expansion states, however, would be hit with an even steeper increase: A 2018 study by health economists Aditi P. Sen and Thomas DeLeire found that marketplace premiums were 11 percent lower in Medicaid expansion states than in nonexpansion states. This analysis found that Medicaid expansion reduces premiums because lower-income people—who typically have higher health care costs—move out of private marketplace plans and into Medicaid. With a healthier, lower-cost group remaining in the private market, premiums go down.
Applying that 11 percent premium increase to 2025 marketplace premiums without the enhanced tax credits, CAP Action estimates that premium costs would rise sharply for a wide range of household types across the country. The 20 congressional districts highlighted in Table 1 would see especially high premium increases if Medicaid expansion were rolled back and enhanced premium tax credits expired.
An illustrative family of four (40- and 38-year-old parents of two children, ages 14 and 12) with an annual income of $129,000, or 413 percent of the 2024 FPL, in Rep. Nick Begich’s (R-AK) district would pay more than $29,100 more for their annual premium. In Rep. Nicole Malliotakis’ (R-NY) district, that same type of family would see their premium rise by nearly $22,500.
The impact on single-parent households would be equally alarming. For a 55-year-old parent of an 18-year-old earning $85,000 a year, or 416 percent of the 2024 FPL, in Rep. Nicholas LaLota’s (R-NY) district, annual premiums would rise by more than $10,400. That increase would be nearly $10,000 in Rep. Michael Lawler’s (R-NY) district.
Young adults and older Americans would not be spared from significant increases. Without the 8.5 percent income cap on premium contributions, younger enrollees who make just above 400 percent of the FPL—who generally do not receive financial assistance from the enhanced tax credits today, given how low their premiums are—would also experience significant increases. For example, a 27-year-old earning $61,000, or 405 percent of the 2024 FPL, in Rep. Andrew Garbarino’s (R-NY) district would have to pay nearly $5,200 more per year to keep their marketplace coverage.
Meanwhile, older adults—who often face the highest medical needs and whose premiums are already higher at baseline because of their age—would be confronted with staggering increases. For instance, in Rep. Donald Bacon’s (R-NE) district, premiums for a 62-year-old couple making $84,000, or 411 percent of the 2024 FPL, could surge by nearly $26,500 per year, with increases exceeding $22,000 in Rep. Jeff Van Drew’s (R-NJ) district.
Conclusion
Congressional Republican health care proposals threaten to raise insurance costs by thousands of dollars in key districts across the country. Slashing Medicaid and allowing enhanced ACA tax credits to expire would raise insurance costs for households across income levels and threaten the financial stability of families nationwide. To preserve affordable coverage, lawmakers must reject these harmful proposals and act swiftly to make the enhanced premium tax credits permanent while protecting Medicaid expansion.
The authors would like to thank Brian Keyser for his diligent fact-checking.
Methodology
ACA marketplace premiums vary by age and geographic location, so the example premiums in this analysis are specific to the cities and family compositions specified. The authors chose illustrative families and a variety of cities to demonstrate the wide range of households across the country that would see their premiums increase under the presented scenarios. The households in CAP Action’s examples have family incomes just above 400 percent of the 2024 FPL, an income level that is currently eligible for marketplace financial assistance if benchmark premium plans exceed 8.5 percent of their family income but would no longer be eligible if the enhanced premium tax credits expired.
To illustrate the cost of marketplace coverage under both congressional Republican proposals, the authors used KFF’s 2025 premium calculator to determine premiums for benchmark silver plans, then increased those by 11 percent from Sen and DeLeire’s study to reflect the impact of Medicaid expansion rollback. The premium increases in Table 1 represent the difference between those adjusted amounts and KFF’s 2025 premiums net of financial assistance, equivalent to a scenario in which enhanced premium tax credits are renewed. To identify benchmark plan premiums, the authors selected one ZIP code fully within district boundaries for each congressional district.