ACA’s Future Under Trump’s Tax Plan

Public Support vs. Financial Reality

The Affordable Care Act (ACA) maintains strong public backing, with 54% of Americans supporting the healthcare program according to recent Gallup polling. However, this popularity may not protect it from impending changes as the Republican leadership, led by President-elect Trump, focuses on extending $4 trillion in expiring tax cuts.

The Tax Cut Challenge

The 2017 Tax Cuts and Jobs Act (TCJA) provisions are scheduled to sunset in 2025. According to the Committee for a Responsible Federal Budget, extending these tax breaks without corresponding spending reductions would increase the national deficit by nearly $4 trillion through 2035.

Limited Options for Spending Cuts

With Trump protecting Social Security and Medicare from potential cuts, and defense spending likely to remain untouched, federal spending options have narrowed significantly. This situation puts Medicaid and the ACA in a vulnerable position as primary targets for budget reduction.

ACA’s Evolution Under Trump

While a complete repeal of the ACA appears unlikely, significant modifications may be forthcoming. Trump has shifted from his earlier stance of total elimination to exploring potential improvements and changes to the existing framework.

Impact of Subsidy Expiration

The enhanced ACA premium subsidies are set to expire alongside the 2017 tax cuts in 2025. This expiration would:

• Increase out-of-pocket premiums by an average of $705 annually
• Reduce ACA Marketplace enrollment by 6.9 million people
• Add 3.4 million people to the uninsured population

Medicaid’s Uncertain Future

Medicaid, with its $600 billion annual federal spending and 81 million beneficiaries, faces potential restructuring. Conservative policy proposals, including Project 2025, suggest implementing federal spending caps on the program, though Trump has distanced himself from some of these recommendations.

The Path Forward

The future of both the ACA and Medicaid will largely depend on how Republicans balance their tax cut objectives with deficit concerns. If deficit reduction becomes a priority, these healthcare programs could face substantial modifications to offset the cost of tax extensions.