States Prepare for Potential Reversal of Obamacare Coverage Improvements Under New Federal Legislation

In 2025, U.S. states are increasingly concerned about the possible rollback of gains made under the Affordable Care Act (ACA), as a recent sweeping tax and spending bill proposed by President Donald Trump aims to significantly alter healthcare policies. The legislation includes measures that could lead to shorter enrollment periods, increased paperwork, and higher premiums for millions of Americans. Notably, it seeks to end automatic re-enrollment, a process that has helped many maintain their coverage without regular reapplication, particularly benefiting residents in the 19 states and Washington, D.C., which operate their own ACA exchanges.

Many of these states rely heavily on rolling over enrollees from year to year, a process now threatened by new rules requiring consumers to actively update their information annually, starting in August. This change could cause a substantial number of policyholders to lose coverage, as assumed by experts estimating a minimum 30% to 50% enrollment decline. Such losses threaten to undo many of the strides made since 2014, when the uninsured rate had dropped from around 14-15% to slightly over 8%.

The anticipated impact includes not only increased uninsured rates but also a dramatic rise in premiums—by an estimated 75%, with early rate requests already reflecting double-digit increases for 2026. This is compounded by the expiration of enhanced subsidies introduced during the COVID-19 pandemic, which had helped keep premiums affordable. Without these subsidies, many consumers, especially those with low incomes or with pre-existing conditions, face higher costs and reduced access to coverage.

The legislation also aims to curb enrollment fraud by tightening verification processes, a move favored more by states with their own marketplaces, where stricter controls have deterred fraudulent activities. Conversely, the federal marketplace in states using healthcare.gov has experienced issues with fraudulent enrollments, often linked to brokers exploiting automatic re-enrollment.

Additionally, the bill proposes to eliminate certain COVID-era policies, such as extended open enrollment periods and special sign-up programs for low-income individuals, further complicating access for vulnerable populations. Experts warn that these combined changes could lead to millions of eligible individuals dropping out of coverage, increasing the uninsured population, and raising overall healthcare costs.

Supporters argue these measures are necessary to combat fraud and reduce government spending, while opponents contend they threaten to dismantle the progress made towards universal coverage. As the Congressional debate continues, millions of Americans remain uncertain about the future of their healthcare coverage, especially in states that run their own ACA exchanges with more robust safeguards.

This evolving landscape underscores the importance of policy design in ensuring affordable and accessible healthcare for all, and highlights the ongoing political struggle over the future of the ACA.

Source: https://medicalxpress.com/news/2025-07-states-brace-reversal-obamacare-coverage.html