Congressional Republicans are advancing health care proposals that would make coverage more expensive and less accessible for millions of Americans. Specifically, their plans would impose higher costs on American families by slashing Medicaid funding and by allowing the Affordable Care Act’s (ACA) enhanced premium tax credits to expire.
A new Center for American Progress analysis finds that ACA health insurance marketplace premiums will increase by thousands of dollars each year if Congress enacts cuts that lead states to eliminate their Medicaid expansions and fails to extend the enhanced premium tax credits beyond 2025. For example, a middle-class family of four in Charlotte, North Carolina, could see their annual marketplace premium costs increase by nearly $9,500.
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Dual threats to health care affordability
Congress is considering a budget reconciliation package that would enact the deepest Medicaid cuts in the program’s history. Republican leadership, including House Speaker Mike Johnson (R-LA) and Energy and Commerce Chair Brett Guthrie (R-KY), are considering cutting federal matching funds—known as the federal medical assistance percentage (FMAP)—for the ACA Medicaid expansion population and imposing work reporting requirements on Medicaid enrollees, both of which would threaten coverage and lives. If Congress enacts these proposals and drops the FMAP for Medicaid expansion enrollees to below the current 90 percent, at least 12 states could be forced to reverse their Medicaid expansions, which would both eliminate Medicaid coverage for millions and increase costs for marketplace premiums.
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At the same time, the ACA’s enhanced premium tax credits are under threat. First introduced under the American Rescue Plan and later extended through the Inflation Reduction Act, these enhanced tax credits made marketplace coverage more affordable for millions of Americans. The enhanced tax credits eliminated silver benchmark plan premiums for people with family incomes between 100 and 150 percent of the federal poverty level (FPL) while also delivering significant premium savings for middle-income families earning more than 400 percent of the FPL, who were previously ineligible for any financial assistance, by ensuring those families would not have to spend more than 8.5 percent of their household income on silver benchmark plan premiums. In 2024, the enhanced tax credits lowered premium payments by roughly 44 percent compared with the original ACA tax credits, saving eligible enrollees about $700 per year and helping drive 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 once again lose eligibility for financial help to afford their marketplace premiums. Roughly 20 million people across income levels would see steep premium increases in 2026, leading to nearly 4 million more people 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, seasonal, 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 in 2026 altogether.
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 estimates annual premiums would skyrocket by thousands of dollars across cities in all 40 Medicaid expansion states and Washington, D.C.
Table 1 approximates how premium costs would rise sharply for a wide range of household types across the country 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 Charlotte, North Carolina, would pay nearly $9,500 more for their annual benchmark premium. In Des Moines, Iowa, that same type of family would see their premium rise by more than $6,300.
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 Charleston, West Virginia, annual premiums would rise by more than $23,400. That increase would be nearly $11,200 in Omaha, Nebraska.
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 but largely don’t require 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 Burlington, Vermont, would have to pay more than $11,800 more per year to keep their 2025 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 Bridgeport, Connecticut, premiums for a 62-year-old couple making $84,000, or 411 percent of the 2024 FPL, could surge by nearly $37,300 per year, with increases exceeding $24,800 in Wilmington, Delaware.
Conclusion
Congressional Republicans’ health care proposals would raise costs and reduce coverage for millions of Americans. 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.
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’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.
The states of Alaska and Hawaii have separate poverty guidelines due to their higher cost of living. In the analysis, incomes were adjusted to align with the FPLs for the other 48 states and the District of Columbia. For a family of four, this was 413 percent of the 2024 FPL; for a single parent of one child, this was 416 percent of the 2024 FPL; for a young adult, this was 405 percent of the 2024 FPL; and for an older couple, this was 411 percent of the 2024 FPL.