We just got a preview of the likely consequences of the “big, beautiful bill” passed by Republicans in Congress and signed by President Donald Trump: Premiums on the Affordable Care Act’s health insurance marketplaces are on track to increase 15 percent on average next year — a record-setting pace.
This comes from a new analysis of more than 100 health insurers selling plans to individuals on the ACA marketplaces that additionally found that plan premiums increases are twice that in 2025 and the highest single-year increase since 2018. According to the experts from KFF, a health policy think tank, one out of every four plans is raising its rates by 20 percent or more.
Peterson-KFF Health System Tracker
These rates are preliminary and will be finalized later this summer. Though the new rates were actually filed before the Republican “big, beautiful bill” passed in Congress earlier this month, KFF experts explain that the GOP’s agenda is playing a role in these cost increases — and it may drive prices up even more in the future.
Here’s what all of this means for you: If you buy insurance on your own through the ACA’s marketplaces, your coverage may be a lot more expensive as soon as you sign up for coverage next year. If you’re on Medicaid, the GOP’s bill creates new work requirements that will take effect next year and could put your benefits at risk. And if you get insurance through your employer, your premiums are going to grow too if other people lose coverage, which is more likely to happen because of all of these changes. Let’s break it down.
Why all of this is happening, briefly explained
As Republicans were pulling together their budget bill, there was the clear question of what to do about enhanced ACA subsidies that have been in place since 2021, first authorized by the Democrats as part of their own budget reconciliation legislation. At the time, the enhanced subsidies both lowered costs for people already eligible for financial aid under the law and extended eligibility for financial assistance for the first time to more middle-class families. Marketplace enrollment nearly doubled from 2021 to 21 million in 2024 as a result.
But the enhanced subsidies were only authorized through 2025. Republicans, who had previously criticized the ACA for making health insurance unaffordable for the middle-class people who have now gained coverage through the expanded assistance, opted not to include an extension of the subsidies as part of their tax-and-spending bill. Instead, they chose to allow the subsidies to lapse, while slashing Medicaid spending over the next decade and providing an outsized tax cut for businesses and the wealthy.
It is possible that these subsidies could be saved if Democrats and some Republican lawmakers can band together to craft a bipartisan deal to maintain the subsidies later this year, but DC insiders are dubious that one can be struck.
If the subsidies do indeed end, they add more pain to the other regulatory changes that are coming to limit financial aid on the marketplaces. These combine to an estimated 5.1 million people who could become uninsured.
These consequences will have ripple effects: The people who drop coverage are projected to be healthier, because they are more likely to think they could live without health coverage, which leaves a sicker and costlier pool of patients in the marketplace.
Insurers are already pricing that shift in. According to the KFF analysis, health plans are citing the lapsed subsidies to explain the proposed rate increases, with the policy change contributing about 4 percent to the rate hike on average. The threat of tariffs from Trump has been cited for another 3 percent increase by some plans. The rest of the proposed rate hikes are attributed to the continued growth in the prices for medical services, which has been ongoing for decades.
And these increases may be only the beginning.
The Republican bill’s changes to Medicaid don’t take effect until the end of 2026, but they could also push premiums higher if millions of people lose coverage as expected. When people lose Medicaid, they are more likely to end up in the emergency room. That requires more costly care than they’d get if they were insured. Those increased costs to hospitals are passed on to insured patients when providers negotiate their payment rates with health insurance plans.
Whether patients will blame the GOP for these cost increases remains to be seen. But their wallets are already feeling the effects of the Republican budget bill.
