What To Know Ahead of 2025 Affordable Care Act Open Enrollment

Affordable Care Act (ACA) marketplace open enrollment begins on November 1. Thanks to the Inflation Reduction Act (IRA), millions of Americans will once again benefit from enhanced tax credits that will lower the cost of their premiums in 2025. These enhanced tax credits have helped drop the nation’s uninsured rate to historic lows, reduced racial disparities in coverage, and allowed states to experiment with making their ACA marketplace coverage even more affordable to consumers, including by offering deductible-free coverage. This could be the last open enrollment where consumers will see such low premium costs: Unless Congress extends the enhanced tax credits or makes them permanent, the enhancements will expire at the end of 2025—causing premiums to increase for 20 million people and leaving 5 million Americans uninsured by 2027.

IRA enhanced tax credits led to historic coverage gains and improved affordability in 2024

• Nearly 1 in 7 Americans—roughly 50 million people—have enrolled in marketplace coverage since the marketplaces’ launch in 2014.
• Last year, more than 21.4 million people enrolled in marketplace coverage, a record high.
• Coverage gains were driven partially by the IRA’s enhanced tax credits that helped improve premium affordability: The IRA made tax credits more generous for people previously eligible for them; expanded eligibility for tax credits to people in households earning more than 400 percent of the federal poverty level—who previously received no financial assistance to purchase coverage; and capped the costs of premiums for marketplace plans at 8.5 percent of household income.
• In 2024, 4 out of 5 HealthCare.gov consumers could select a plan with a monthly premium of $10 or less after the tax credit.
• The enhanced tax credits also made more generous coverage less expensive. As a result, in 2024, nearly twice as many people (10.6 million) enrolled in plans with reduced deductibles than did in 2020 (5.7 million).

IRA enhanced tax credits narrowed coverage disparities and allowed states to offer deductible-free insurance plans

• The enhanced tax credits helped bring down uninsurance rates among communities that have historically faced barriers to coverage: Between 2020 and 2023, Black and Latino enrollment in ACA marketplace plans grew by an astounding 95 percent and 103 percent, respectively.
• States such as California and New Mexico are leveraging the enhanced tax credits to reduce or to eliminate deductibles for some marketplace plans and are rolling out standardized plan designs that increase access to services with lower out-of-pocket costs. Making the enhanced tax credits permanent is essential for the long-term viability of these state affordability policies.

What will happen if the enhanced tax credits expire at the end of next year?

• If Congress does not act and the enhanced tax credits expire at the end of 2025:
  • Nearly 20 million enrollees would see premium increases beginning in 2026, and an estimated 5 million people would become uninsured within two years.
  • Premiums will skyrocket, rising most steeply for enrollees who are lower-income, older, or have household incomes above 400 percent of the federal poverty level. For example, a 45-year-old man in Wisconsin making $60,000 per year would see his premium increase by $1,354, and a young Pennsylvania family of four with a $125,000 annual income would see their premium increase by $6,448.

What’s new for 2025 open enrollment?

• Consumers will have an improved shopping experience with simplified options. To streamline consumer choice and minimize confusion, health insurers can offer only two nonstandardized plans, down from four such plans during 2024 open enrollment. This change allows consumers to more easily compare and contrast their coverage options.
• DACA recipients are eligible for coverage. This year, the Centers for Medicare and Medicaid Services (CMS) issued a final rule modifying the definition of “lawfully present”—a condition for marketplace eligibility—to include Deferred Action for Childhood Arrivals (DACA) recipients. Accordingly, CMS estimates that 100,000 DACA recipients nationwide will enroll in marketplace plans for 2025 coverage. The timing and scope of their enrollment are contingent on ongoing litigation in Kansas et al. v. United States of America and the Centers for Medicare and Medicaid Services.
• HealthCare.gov will include a voter registration question. The HealthCare.gov application now features a question for applicants to indicate their interest in receiving information about voter registration. Interested enrollees will be provided with a link to Vote.gov for further details.
• ACA enrollment navigators have more support. The Biden-Harris administration awarded $100 million, the largest amount of federal support to date, to the Navigator program. Navigators assist consumers with understanding their coverage options and enrolling in the marketplace.

Conclusion

The 2025 ACA open enrollment period represents a critical juncture in the future of affordable marketplace coverage. Without swift congressional action to extend the enhanced premium tax credits, historic coverage gains could be reversed, leaving millions uninsured or underinsured.