House budget bill raises premiums for more than 10 million people who buy their own ACA health insurance

Surprise provision added hours before the final vote also cuts funding for state insurance innovation and limits access to abortion

Hours before the House approved its Budget Reconciliation bill by a 215-214 vote, Republican leadership added a brand-new provision that had never been considered while committees were debating the legislation. This new provision funded federal Cost-Sharing-Reduction (CSR) payments to insurance companies offering coverage in the Affordable Care Act (ACA) marketplace. Since 2017, when President Trump terminated these payments, insurers have compensated for the loss by raising premiums in ways that increased the generosity of financial assistance that helps consumers buy ACA insurance. As a result, consumers’ costs fell when CSR payments ended, more people bought insurance, and ACA markets stabilized. If the Senate approves the House’s last-minute addition to Budget Reconciliation, millions of people would be charged significantly more for their ACA health insurance, and many would have no choice but to drop their coverage and become uninsured.

Key findings

If the Senate approves the House’s proposed restoration of CSR payments to insurance companies:

• Premium costs would rise for 10.6 million people, or more than 40% of everyone who buys their own ACA health insurance. Average increases would potentially exceed $1,400 a year.

• Fewer than 600,000 people—just 2% of people with ACA coverage—would see their premium costs fall, potentially by less than $350 a year, on average.

Residents of red and blue states alike would experience harm. But the harm would be particularly deep in certain states:

• The 10 states with the highest percentage of ACA insured who would be hurt by this provision are Alaska (87% of people who buy ACA insurance would pay higher premiums for their current coverage), the District of Columbia (78%), Wyoming (76%), North Dakota (75%), Vermont (74%), New Mexico (72%), Maryland (72%), Hawaii (72%), Delaware (69%), and Colorado (68%).

• The 10 states with the highest number of ACA insured who would be hurt by this provision are Texas (2.1 million people who buy ACA insurance would pay higher premiums), Florida (1.6 million), California (660,000), North Carolina (510,000), Georgia (460,000), South Carolina (350,000), Pennsylvania (330,000), Ohio (280,000), Tennessee (260,000), and Virginia (250,000).

Rather than pay much higher premium charges, some people who now buy ACA insurance would switch to coverage with higher out-of-pocket costs. Many would have no choice but to drop their coverage entirely, even though they and their families would lose health insurance as a result.

People of all races and ethnicities would see their costs rise dramatically. However, Latinos and members of other historically marginalized communities would experience particularly great harm. As of 2024, people of color comprised 54% of everyone buying ACA coverage in healthcare.gov, including 29% who were Latinos and 16% who were African Americans earning too much to qualify for Medicaid but too little to afford insurance without an employer’s help.

This last-minute addition to the House budget bill would also have other effects:

• Federal funding would drop for Alaska, Colorado, Delaware, Georgia, Idaho, Maine, Maryland, Minnesota, Montana, New Hampshire, New Jersey, North Dakota, Oregon, Pennsylvania, Rhode Island, Virginia, and Wisconsin, which use ACA reinsurance waivers to lower total premiums; and for Oregon, Minnesota, and New York, which operate Basic Health Programs that make coverage more affordable for low-income residents,

• Women in Alaska, California, Colorado, Connecticut, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington could lose access to abortion care in the ACA marketplace, except when a pregnancy results from rape or incest or threatens the pregnant woman‘s life. Currently, states have the option to make abortion care available without those limitations in ACA plans, so long as they are funded entirely by the woman buying her own insurance or by the state. Ending this state option and eliminating access to most abortion care in these 19 states would have a serious impact, as they include nearly 40% of all American women of reproductive age. This policy change would also violate the promise that issues involving abortion should be decided by states, rather than the federal government.

The impact of CSR restoration on health insurance costs

How the ACA helps people afford health insurance

The explanation begins with the importance of so-called “silver” plans in determining the financial help people get with ACA health insurance. Most ACA plans fall into the gold, silver, or bronze tiers, with silver coverage occupying the middle ground of coverage generosity. The ACA offers two types of assistance to lower people’s health insurance costs, and silver plans play a central role in both.

First, premium tax credits (PTCs) lower the monthly premium payments required to purchase health insurance. A person’s PTC is set so the second-lowest-cost silver plan (the so-called “benchmark”) becomes affordable, with affordability defined based on income. If a person’s income does not change, but the cost of the benchmark silver plan rises, the PTC automatically increases to make up the difference. Even though the PTC is based on the cost of silver coverage, it may be used to buy ACA marketplace insurance at any metal tier.

Second, cost-sharing reductions (CSRs) lower the deductibles, copayments, and other health care costs charged when people with insurance seek health care. Ordinarily, a silver plan has deductibles that average nearly $5,000. When lower-income people buy silver coverage, however, the ACA requires the insurer to make a cost-sharing reduction that cuts the silver plan’s average deductible to:

• $532 for people with incomes below 200% of the federal poverty level (roughly $31,000 for an individual); and

• $9 for people with earnings below 150% of the federal poverty level ($23,000).

But these CSRs only apply when people buy silver plans in the ACA marketplace.

What happened when President Trump ended CSR payments in 2017

Under the ACA’s original design, the federal government made payments to insurers that covered the cost of lowering deductibles and other out-of-pocket costs for low-income people who enrolled in silver plans. When President Trump ended these payments in 2017, insurance companies in most states covered CSR costs by raising premiums for silver-tier health plans, the only plans that furnished CSRs. That premium increase was often termed, “silver loading.” It had two major effects:

• Higher silver premiums raised PTC amounts. That happened because PTCs automatically make up the difference between the second-lowest-cost silver plan and the income-based amount a person can afford to pay, as defined by the ACA statute.

• Lower premiums for plans at other metal tiers partially offset the increase to silver premiums.

Most people with PTCs who enrolled in silver plans were largely or entirely unaffected, since their PTC increases generally made up for higher silver premiums. However, the cost to buy insurance at other metal levels fell, for two reasons: premiums for such coverage were lower; and PTCs offered more help paying for insurance. The resulting drop in consumers’ premium costs triggered significant increases in enrollment

The one group of consumers who paid more, due to silver loading, consisted of people who bought silver plans in the ACA marketplace without the aid of PTCs.

What would happen if CSR payments were restored

In 2019, the Rand Institute, a nonpartisan research organization, estimated the impact of restoring CSR payments. The researchers found that “restoration of federal CSR payments results in lower individual market premiums for silver plans but higher premiums for bronze, [and] gold … plans. Furthermore, because … PTC amounts are benchmarked to the second-lowest-cost silver plan, we find that … PTCs decline in value. PTC-eligible individuals have to pay more out of pocket for their premiums on the individual market, and fewer choose to enroll…. Overall, our results suggest that while …the restoration of CSR payments would lead to lower federal spending on PTCs, it would also lead to higher premium costs for many consumers and lower insurance enrollment.”

The number of people affected, by state and nationally

RAND’s detailed results may not fully apply to the current ACA marketplace, which has changed greatly since 2019. However, published data about ACA enrollment in 2025 makes it possible to estimate, under current conditions, the number of people who would pay more because they are enrolled in plan tiers other than silver. Premiums for such plans would rise, if silver loading ends; and people using PTCs to buy non-silver insurance would see their financial assistance cut because of a drop in silver premiums, further increasing the spike in family premium payments. On the other hand, people who buy silver plans without PTCs would see their costs fall.¹ Based on state-specific public information about metal-tier enrollment, consumer income, and the proportion of ACA-covered people who bought insurance with PTCs for 2025, this analysis finds (Table 1):

• 10.6 million people, or 44% of everyone with ACA health insurance, would pay more in premiums if CSR payments were restored. These are mostly people who currently have bronze or gold coverage, though they also include a small number of people who buy coverage at other non-silver metal levels.²

• 560,000 people, or 2% of ACA enrollees, would pay less in premiums, because they buy silver coverage without the aid of PTCs.

• 13.1 million people, or 54% of people with ACA insurance, would have their premium costs generally unaffected, because they purchase silver plans with the aid of PTCs.

However, the effects would vary greatly by state:

• States where cost increases would affect the highest percentage of ACA enrollees. In 10 states, costs would rise for 68% or more of all ACA enrollees: Alaska, the District of Columbia, Wyoming, North Dakota, Vermont, New Mexico, Maryland, Hawaii, Delaware, and Colorado (Table 2).

• States where cost increases would affect the greatest number of ACA enrollees. In 10 other states, more than 254,000 people would pay increased premiums for their current health insurance: Texas, Florida, California, North Carolina, Georgia, South Carolina, Pennsylvania, Ohio, Tennessee, and Virginia (Table 3).

Table 1. How premium costs for people buying ACA health insurance would change if CSR payments were restored, by state: 2025

Source: Analysis of Centers for Medicare and Medicaid Services (CMS), Public Use Files for 2025 Open Enrollment Period (2025 PUF files).

Note: Totals do not sum because calculations of state-specific enrollment, by PTC status and metal level, were based on CMS-reported percentages, whereas the national total was based on CMS-reported specific numbers. Enrollees in all non-silver metal levels were classified as facing increased premiums. Enrollees in silver-tier plans without PTCs were classified as charged lower premiums. Those in silver plans with PTCs were classified as experiencing generally stable costs. The table shows how premium costs would change for the coverage people purchased in 2025.

Table 2. The 10 states with the highest percentage of people with ACA health insurance whose premium costs would rise if CSR payments were restored: 2025

Source: CMS, 2025 PUF files. See notes for Table 1.

Table 3. States with the highest number of people with ACA health insurance whose premium costs would rise if CSR payments were restored: 2025

Source: CMS, 2025 PUF files. See notes for Table 1

The impact on affected individuals

The amount by which premium payments would change is difficult to calculate without actuarial analysis or microsimulation. However, it seems likely that, in general, effects for people with and without PTCs would be of the same general order of magnitude as those estimated by Rand for 2020 ACA enrollees.

Among PTC beneficiaries, Rand found that:

• 71% would experience increased premium costs under the restoration of CSR payments, with increases averaging $1,265 per person.

• 11% would see premium costs drop, with savings averaging $307 per person.

Among people buying ACA coverage without PTCs:

• 89% would experience increased premium costs that average $2,033 per person.

• 11% would see their costs drop by an average of $146 per person, according to Rand.

If that same pattern applied to the current ACA marketplace, based on the distribution of consumers between those who purchase health insurance with and without PTCs, and the resulting totals were updated based on the increase in average silver benchmark premiums from 2020 to 2025, then:

• The average increase in premium charges for those who pay more would be $1,442.

• The average drop in premium charges for those who pay less would be $313.

Effects by race and ethnicity

People of all races and ethnicities would see their costs rise dramatically. However, Latinos and members of other historically marginalized communities would experience particularly great harm. Thanks to enhanced PTCs since 2021, high levels of outreach, and other policies pursued by the Biden administration, people of color comprised 54% of everyone buying ACA coverage in 2024, including 29% who were Latino, 16% who were African American, 6% who were Asian Americans and Pacific Islanders, and 1% who were Native American. These estimates are limited to healthcare.gov plans.

Coverage changes

In response to higher premium costs for current ACA coverage, some consumers would shift to less generous plans, with higher out-of-pocket costs and lower premiums. Others would drop ACA coverage entirely, even if that meant becoming uninsured.

Other effects of CSR restoration, as proposed by the House budget bill

Reduced federal funding for state health insurance programs

Many states are implementing innovative health insurance programs, relying on federal payments that are based on the cost of benchmark silver coverage. Lower silver premiums would translate into fewer federal dollars for two groups of states:

• States operating reinsurance waivers. These states provide reinsurance that pays a portion of ACA insurers’ claims. Such payment lowers gross premiums. The states fund these programs using federal pass-through payments that equal the federal PTC costs saved by the waiver. The baseline of current PTC costs would fall with the restoration of CSR payments, since benchmark silver premiums would fall. As a result, the amount of federal money saved through waivers would drop, cutting federal pass-through payments. States currently operating reinsurance waivers that would see their funding cut by the House bill include Alaska, Colorado, Delaware, Georgia, Idaho, Maine, Maryland, Minnesota, Montana, New Hampshire, New Jersey, North Dakota, Oregon, Pennsylvania, Rhode Island, Virginia, and Wisconsin.

• States implementing the ACA’s Basic Health Program (BHP) option. BHP states move low-income residents out of the ACA marketplace and into state-contracted coverage, which is more affordable to the consumer. The federal government funds BHP states based on 95% of the federal PTCs that would have been paid without BHP. CSR restoration would lower benchmark silver premiums, causing a corresponding drop in federal PTC amounts in the absence of BHP. This would reduce federal support for the three states currently operating BHPs: Oregon, Minnesota, and New York.

These states may lose significant federal funding. In 2019, Rand found that average silver premiums would fall by 16% if CSR payments were restored, dropping from $6,995 for a 40-year-old non-smoker to $5,884. Of course, changes in insurance markets since 2019 mean that Rand’s results cannot be assumed to show anything more than the approximate general magnitude of federal funding losses under the House bill’s last-minute addition.

Unprecedented limits on abortion care in ACA health plans

Today, states can have ACA plans cover abortion care that falls outside the Hyde Amendment’s longstanding limitations on federally-funded Medicaid services. Under that amendment, federal Medicaid dollars cover abortions only if the pregnancy resulted from rape or incest or if it threatens the pregnant woman’s survival. However, a state can use its own dollars to cover non-Hyde abortion care for Medicaid beneficiaries. Along similar lines, federal ACA funding may not be used to finance non-Hyde abortion care, states can require or allow ACA plans to cover such care using funding that comes entirely from the women who buy their own coverage or from state government.

The CSR restoration language added to the House reconciliation bill would break with the core principle that states can offer their residents full abortion care, so long as federal dollars are not used. Instead, the House bill’s last-minute addition forbids all ACA plans from accessing CSR payments if they cover non-Hyde abortion care, even if that care is financed entirely with consumer or state dollars. It does not matter what the state or what the women involved would decide, given the choice. This could effectively eliminate women’s access to such abortion care in two groups of states:

• States that require all ACA plans to cover non-Hyde abortion care, using consumer or state dollars: namely, California, Colorado, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Vermont, and Washington.³

• States where coverage of non-Hyde abortion care is offered through ACA plans, even though state law does not require it. These states are Alaska, Connecticut, the District of Columbia, Hawaii, Montana, New Hampshire, and Rhode Island.

Together, these 19 states include two out of every five American women of reproductive age (39%), as defined by the World Health Organization.⁴ Empirically, this last-minute addition to the House reconciliation could thus have a significant impact reducing women’s access to abortion care. As a matter of principle, it would also mark an important violation of the promise that issues involving abortion should be decided by states, rather than the federal government.

Conclusion

Restoring CSR payments would cut federal spending on ACA health insurance, but it would do so by shifting billions of dollars in health insurance costs to working families. This change would significant raise insurance costs for more than 40% of everyone who buys their own ACA coverage, many of whom would have no choice but to drop health insurance altogether. This would harm Americans of all races and ethnicities but have a disproportionate impact on Latinos and members of other historically marginalized communities.

As Americans increasingly worry about rising health care costs, Senators should not make matters worse by further driving up their constituents’ health insurance costs. The Senate should also avoid cutting federal funding for state health insurance programs while imposing an unprecedented, one-size-fits-all federal limit on women’s access to abortion care.

1. For people buying coverage in healthcare.gov, federally-published data show the number of silver-tier purchasers who do not benefit from PTCs and would therefore see their premium costs drop as a result of CSR payment restoration and the end of silver loading. In state-based marketplaces, for which the federal government publishes less information, this analysis approximates the number of silver-tier purchasers without PTCs by assuming that everyone with income above 400% of the federal poverty level (FPL) is ineligible for PTCs. In the median healthcare.gov state in 2025, the number of silver purchasers with incomes above 400% FPL was the same as the number without PTCs. In the average such state, the number of silver purchasers with incomes above 400% FPL was 2% lower than the number without PTCs.

2. Nationally, 54,109 people bought very high deductible catastrophic plans in 2025, and 118,099 bought very low deductible platinum plans. Rand researchers did not specifically assess the effect of CSR restoration on plans at these metal levels, and it is possible that their premiums would not increase—especially for catastrophic plans, since they are priced outside the overall individual-market risk pool. State tables without those additional numbers are available on request.

3. It is possible that, in such states, silver loading could continue, because no plans would receive federal CSR payments. It is not clear whether that was the intent of those who drafted this provision, and it is not clear whether the current administration would interpret the provision in this way.

4. Analysis of 2023 American Community Survey data, accessed through IPUMS USA, University of Minnesota, www.ipums.org.