U.S. President-elect Donald Trump arrives at Joint Base Andrews, Maryland, Nov. 13, 2024.
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President-elect Donald Trump's return to the White House is expected to have a major impact on consumer health care.
Republicans are unlikely to face legislative hurdles in their goals to transform health insurance in the US, experts say, after the party retained its narrow majority in the House and flipped the Senate, giving it control of both Congress and the presidency acquired.
Households that buy health insurance through Medicaid or an Affordable Care Act marketplace plan could face some of the biggest disruptions because of the reforms sought by Trump and Republican lawmakers, health policy experts say.
Such reforms would free up federal funds that could be used to finance other Republican policy priorities such as tax cuts, they said.
Nearly 8% of the U.S. population is currently uninsured — the lowest rate in American history, said Michael Sparer, a professor at Columbia University and chair of the Department of Health Policy and Management. When the Affordable Care Act took effect more than a decade ago, that number was 17%, he said.
“This rate will rise again,” said Sparer.
Trump announced on Nov. 14 that he would put Robert F. Kennedy Jr. in charge of the Department of Health and Human Services, which includes the Centers for Medicare & Medicaid Services. CMS, in turn, manages, among other things, the Affordable Care Act marketplace and the Children's Health Insurance Program (CHIP).
Robert F. Kennedy Jr. speaks with Republican presidential candidate and former President Donald Trump at a Turning Point Action Rally in Duluth, Georgia, on Wednesday, Oct. 23, 2024.
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Kennedy, a vaccine skeptic accused of spreading conspiracy theories, has vowed to make major changes to the U.S. health care system.
A spokesperson for Trump's transition team did not respond to a request from CNBC for comment on the president-elect's health care policy plans.
Here's how consumer health care could change during the new Trump administration, experts say.
Affordable Care Act Marketplace
A lab technician cares for a patient at Providence St. Mary Medical Center in Apple Valley, California, March 11, 2022.
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The premium subsidies for “betting” are expiring
Based on election history, the Affordable Care Act's increased subsidies are unlikely to be extended once they expire at the end of 2025, said Cynthia Cox, vice president and director of the ACA program at KFF, a health policy research organization.
“If I were to bet on it, I would be much more comfortable betting on them expiring,” Cox said.
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This federal aid, originally provided during the pandemic as part of the American Rescue Plan in 2021, has significantly reduced the cost of insurance for people who purchase health insurance on the ACA marketplace. These customers include anyone who does not have access to a workplace tariff, such as students, the self-employed and the unemployed.
According to a rough estimate from Cox, a person making $60,000 a year now has a monthly premium of $425, compared to $539 before the increased subsidies. Meanwhile, a family of four earning about $120,000 currently pays $850 per month instead of $1,649.
Permanently extending expanded ACA subsidies could cost around $335 billion over the next decade, according to a Congressional Budget Office estimate.
“They are concerned about costs and will probably cut taxes next year,” Cox said of Republicans.
Nevertheless, it is a “big” risk to forego health insurance
The Congressional Budget Office estimates that about 3.8 million people will lose their health insurance if the subsidies expire. Those who retain their insurance coverage are likely to pay higher premiums.
“The bottom line is uncertainty,” said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy.
“The good news for market consumers is that the improvement [subsidies] will be available until 2025, so there should be no immediate changes,” Corlette added.
Even if subsidies go away, experts say it's important to stay enrolled if possible, even if you have to compromise on coverage to keep costs within budget.
Buying a plan, even a cheaper plan with a high annual deductible, can provide an important safeguard against huge costs from unforeseen medical needs such as surgery, said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida.
“I can't emphasize enough how risky it is to go without health insurance,” said McClanahan, founder of Life Planning Partners and member of the CNBC Financial Advisor Council.
“A heart attack can easily cost someone without insurance $100,000,” she said. “Do you have to pay for that?”
Medicaid
A “pretty big goal” for lawmakers
According to the Congressional Budget Office, Medicaid is the third-largest program in the federal budget and will account for $616 billion in spending in 2023. During his campaign, Trump promised not to make cuts to the two largest programs, Social Security and Medicare.
That makes Medicaid the “obvious place” for Republicans to raise revenue to fund their agenda, said Larry Levitt, executive vice president of health policy at KFF.
“Medicaid is going to have a pretty big target in its sights,” Levitt said.
The end result is uncertainty.
Sabrina Corlette
Co-director of the Center on Health Insurance Reforms at the McCourt School of Public Policy at Georgetown University
Cuts would “inevitably mean” fewer households receiving benefits, Levitt said. Medicaid recipients tend to be low-income households, people with disabilities and seniors in nursing homes, he said.
The cuts to Medicaid benefits were a key part of the effort by Trump and other Republican lawmakers to repeal and replace the Affordable Care Act, also known as Obamacare, in 2017, Levitt said.
These efforts were ultimately unsuccessful.
How Medicaid could be restricted
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The new Medicaid cuts could take many forms, experts say, citing previous proposals and comments from the Trump administration, Republican lawmakers and the conservative Project 2025 policy blueprint.
For example, the Trump administration could try to add work requirements for Medicaid recipients, as it did in his first term, said Sparer of Columbia University.
Additionally, Republicans may seek to limit federal Medicaid spending allocated to states, experts said.
The federal government covers a portion – typically 50% or more – of states’ Medicaid spending. There is no limit to this dollar amount.
Republicans could try to convert Medicaid into a flat grant, giving each state a fixed amount of money annually, or implement a per capita cap, where benefits are capped for each Medicaid participant, Levitt said.
Lawmakers could also try to roll back the expansion of Medicaid under the Affordable Care Act, which expanded the pool of people eligible for coverage, experts said.
They could do this by cutting federal funding to the 40 states and the District of Columbia that have expanded Medicaid eligibility. That would shift “tremendous financial risk to the states, and many states would abandon Medicaid expansion as a result,” Levitt said.
Short-Term Health Insurance Plans
Under the previous Trump administration, consumers saw an increase in the availability of non-ACA health insurance options, including short-term plans, experts say. The same thing is likely to happen in the next four years.
Short-term health insurance policies provide coverage for limited periods of time and typically for fewer medical services than comprehensive insurance.
Proponents of these plans say they allow insurers to offer consumers lower monthly premiums because they don't have to cover as many services. At the same time, it is possible to reject people with pre-existing conditions or to charge them higher fees. While Trump was in office, enrollment in short-term plans skyrocketed.
The US Capitol in Washington, DC, October 4, 2023.
Yasin Öztürk | Anadolu Agency | Getty Images
“The previous Trump administration and many in the Republican Party have called for expanding the marketing and sales of short-term plans and other insurance products that do not have to meet the pre-existing terms and conditions standards of the ACA and other consumer protections,” said Corlette of Georgetown University.
She said consumers can be drawn to the plans by their low cost, but often learn too late how thin the coverage is.
Drug prices
It's unclear whether lawmakers would keep the drug policy in place, experts said. Trump signed executive orders in 2020 aimed at reducing prescription drug costs, for example.
“It’s not at all clear that Trump will be a friend to the pharmaceutical industry,” Sparer said.
For example, the Inflation Reduction Act gave the federal government, for the first time, authority to negotiate with pharmaceutical companies on prices for some drugs covered by Medicare.
According to the Centers for Medicare & Medicaid Services, this provision is scheduled to take effect in 2026 for ten drugs – some of Medicare's “most expensive and widely used” drugs to treat a variety of diseases such as heart disease, diabetes, arthritis and cancer.
CMS estimates the measure will save patients $1.5 billion in out-of-pocket costs in 2026. The federal government would expand the list of medications in subsequent years.
The Inflation Reduction Act also capped Medicare co-pays for insulin at $35 per month. They previously had no cap. According to KFF, the average Medicare Part D insulin user paid $54 per insulin prescription out of pocket each month in 2020.
The law also capped out-of-pocket costs for prescription drugs covered by Medicare at $2,000 per year starting in 2025. Until now there was no upper limit.
According to KFF, about 1.4 million Medicare Part D enrollees paid more than $2,000 out of pocket for medications in 2020. These costs averaged $3,355 per person.
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