Donald Trump’s upcoming presidency is set to reshape the US health insurance landscape, with the expiration of Affordable Care Act (ACA) subsidies in 2025 looming as a pivotal concern. Medicare premiums, critical for millions, face uncertainty, risking inflation in healthcare costs and leaving low- to medium-income households vulnerable to limited or no coverage amidst rising medical expenses, says GlobalData, a leading data and analytics company.

GlobalData’s Insurance Company Line of Business Breakdown database reveals that the US Medicare Health insurance market grew by 9.4% from $696 billion in 2022 to $761 billion in 2023.

Medicare is a social insurance program which is funded by the Federal Government and primarily supports people over the age of 65 by paying for half of their medical expenses. The only social healthcare program offered in the US is Medicaid, which offers free medical care to those who qualify, including low-income children, pregnant women, the elderly, and people with disabilities. Therefore, these premiums could come under threat as subsidies expire.

Ben Carey-Evans, Senior Insurance Analyst at GlobalData, says: “During his first term, Trump supported Republican efforts to repeal the Affordable Care Act (ACA), though these attempts were unsuccessful. However, with Republicans now holding a majority in both the House of Representatives and Congress, he is in a significantly stronger position. Notably, the ACA enjoys substantial popularity in southern, predominantly Republican states, making the expiration of subsidies a politically risky decision for a Republican president.”

The expiration of subsidies is expected to drive significant inflation in healthcare premiums, posing a considerable challenge for insurers who may struggle to retain customers. This development presents a substantial risk to low- and middle-income consumers, potentially leaving them with limited or no health insurance coverage and exposing them to exorbitant medical expenses.

Carey-Evans concludes: “The situation remains uncertain at this stage, as Trump’s inauguration is scheduled for January 2025. However, his track record and his party’s stance on Medicare and the ACA indicate that these programs could become key targets for government cost-cutting initiatives.”