A recently released Gallup poll shows that the Affordable Care Act (also known as Obamacare) remains popular with the public and has the support of 54% of American adults. But experts say that may not protect the federal Medicare program from changes as President-elect Donald Trump and his fellow Republicans look to add $4 trillion to the program. Tax cuts that are about to expire.
Many of the provisions of the 2017 Tax Cuts and Jobs Act (TCJA), the signature law passed during Trump’s first term, will expire at the end of 2025. The president also promised to cut corporate taxes and eliminate taxes on worker tips and overtime.
But simply extending TCJA tax breaks without reducing federal spending would increase the national deficit by nearly $4 trillion by 2035, according to the Committee for a Responsible Federal Budget, an advocacy group dedicated to reducing the national debt.
Trump has already eliminated two of the largest government programs — Social Security and Medicare — in potential cuts. Larry Levitt, executive vice president for health policy at KFF (formerly the Kaiser Family Foundation), said in a recent JAMA article that defense spending cuts are also considered unlikely, That means nearly half of federal spending will be protected.
That makes “Medicaid (the second-largest source of federal spending) and the Affordable Care Act prime targets for spending cuts. The math is unavoidable,” Levitt said.
Will Trump repeal the Affordable Care Act?
By comparison, outright repeal of the Affordable Care Act is unlikely. While Trump continues to criticize the health care expansion, he has backed away from his previous vow to completely repeal the Affordable Care Act.
“President Trump will make good on his promise to make his highly successful tax cuts permanent and ease the financial burden on families across the country. He will also end the drain on our health care system so our nation can continue to care for those who rely on health care of Americans.
In 2017, support for the Affordable Care Act reached a record 55%, the first time a majority of Americans approved of it since Gallup began asking about it in 2012. This high water mark occurred a month later.
“The Affordable Care Act remains politically divisive but overall is more popular with the public than ever before,” Levitt told CBS Financial Watch. “Republicans are unlikely to try to repeal the Affordable Care Act again, but if Republicans want to pay for tax cuts, cutting the Affordable Care Act and Medicaid is a real possibility.”
Brad Ellis, senior director at Fitch Ratings, noted that Trump and Republican lawmakers have expressed interest in changing the way the ACA operates, including introducing a high-risk participant pool and potentially reducing subsidies for public trading businesses. Such changes could impact enrollment, he said in a recent report.
During the presidential campaign, Trump said he had a “concept of a plan” to replace the Affordable Care Act.
“Obamacare is terrible,” Trump said recently on NBC News' “Meet the Press.” , I will take action on it.
Achieve large cuts with minimal effort
Republicans can slash the Affordable Care Act simply by standing still. This is because of the enhanced Affordable Care Act premium subsidies enacted after President Biden was elected and Democrats took control of Congress. Booking expired Plus the 2017 tax cuts through the end of 2025.
The Congressional Budget Office estimates that if additional ACA subsidies expire, the federal deficit will be reduced by $335 billion over ten years relative to a permanent extension of subsidies.
After enhanced subsidies took effect, ACA enrollment nearly doubled to a record 21 million people. CBO estimates that without subsidies, 6.9 million fewer people would be enrolled in ACA Marketplace plans and 3.4 million more people would be uninsured.
The impact will be felt across the country, especially in Southern states that have not yet expanded Medicaid Levitt said the five states with the fastest growth in ACA enrollment since 2020 are Georgia, Mississippi, South Carolina, Tennessee and Texas.
“Health care was not a big topic during the campaign, so I can imagine that voters might be surprised to see cuts to Medicaid and the Affordable Care Act that they didn't hear about during the campaign,” Levitt said. “While people Frustrated by the current state of health insurance, disrupting the status quo makes them nervous.”
Medicaid targeted for cuts?
According to KFF, Medicaid accounts for more than $600 billion in federal spending annually and covers 81 million people.
“There are signs that support for Medicaid will diminish under the new administration, suggesting that enrollment and revenue headwinds to the program will diminish,” Fitch's Ellis said.
Trump has been silent on Medicaid during the 2024 campaign, but his budget proposals during his first administration included a plan to limit federal Medicaid spending. Project 2025, developed by the Heritage Foundation and a coalition of conservative groups, proposes reforms to Medicaid, including limits on federal spending.
“At the center of several important plans—Project 2025, the Republican Study Committee’s Fiscal Year 2025 (RSC) Budget, and the House Republicans’ Fiscal Year 2025 Budget Resolution—are restrictions and deep cuts in federal Medicaid funding,” said Georgetown University’s McCourt Public The Center for Children and Families at the Institute for Policy Studies noted in September.
Trump seeks distance Himself in the 2025 plan In the months leading up to the election, some of its policy proposals were criticized as “terrible”.
But Levitt said the Affordable Care Act and Medicaid may still ultimately face cuts as Republicans who control the White House and both chambers of Congress debate fiscal plans after President-elect Trump takes office.
“A lot depends on whether there is pressure to pay for the tax cuts through spending cuts. If Republicans are willing to cut taxes and increase the deficit, we may not see significant cuts to the Affordable Care Act and Medicaid,” Levitt said . “Some Republicans may insist on spending cuts to offset the tax cuts. If that's the case, the Affordable Care Act and Medicaid will likely be on the chopping block.”
