The impending presidency of Donald Trump is expected to reshape the health insurance landscape in the US, given that the subsidies under the Affordable Care Act (ACA) are also set to expire in 2025, according to a report on Tuesday.
The report by GlobalData, a data and analytics company, showed that medicare premiums -- critical for millions -- face uncertainty.
The increasing inflation in healthcare costs will leave low- to medium-income households vulnerable to limited or no coverage amidst rising medical expenses, said the report.
GlobalData's Insurance Company Line of Business Breakdown database reveals that the US Medicare Health insurance market grew by 9.4 per cent from $696 billion in 2022 to $761 billion in 2023.
Medicare is a social insurance programme that 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 programme 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.
"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," said Ben Carey-Evans, Senior Insurance Analyst at GlobalData.
The ending of subsidies can likely drive significant inflation in healthcare premiums. This will pose a considerable challenge for insurers who may struggle to retain customers.
The report said that this will lead to a substantial risk to low- and middle-income consumers. They will have limited or no health insurance coverage, which exposes them to exorbitant medical expenses.
"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 programmes could become key targets for government cost-cutting initiatives," Carey-Evans said.
(With inputs from IANS)
