GOP Health Care Plan: Medicaid, ACA Subsidies, and TrumpRx

The Republican health care plan in force today is not a single bill but a stack of changes: a July 2025 budget reconciliation law that restructures Medicaid and tightens ACA marketplace rules, the expiration of enhanced ACA premium tax credits at the end of 2025, a drug-pricing portal launched in February 2026, and a one-page White House framework released in January 2026 that has not become law.¹² Together these moves are projected to leave about 10 million more people uninsured by 2034, or roughly 15 million once the subsidy expiration is counted, and they have already driven benchmark ACA premiums up 21.7% for 2026.³⁴

What Changes for Medicaid

The reconciliation law, called the One Big Beautiful Bill Act and signed on July 4, 2025, cuts roughly $990 billion in gross federal Medicaid spending over ten years.³ The single biggest change is a work and reporting requirement for adults enrolled through the ACA’s Medicaid expansion. To keep coverage, able-bodied adults must work, volunteer, or attend school for at least 80 hours a month, with implementation set for 2029 under the original committee text. The requirement applies to adults ages 50–64 in the expansion population.¹ The CBO estimated that provision alone reduces federal Medicaid spending by $326 billion and causes nearly 5 million people to lose coverage.⁵

Beyond work requirements, the law freezes state provider taxes and limits state-directed supplemental payments, together accounting for about $340 billion in savings.⁶ Starting January 1, 2027, expansion enrollees must have their eligibility redetermined every six months, and retroactive coverage shrinks from 90 days to one month.⁷ Biden-era rules that streamlined enrollment for older adults and people with disabilities are subject to a moratorium.¹ The law also blocks Medicaid funding for gender-affirming care for minors and for organizations that provide abortions, including Planned Parenthood.⁸

The impact is uneven by state. Louisiana, Illinois, Nevada, and Oregon face the steepest reductions, with projected federal Medicaid spending down 19% or more over the decade.⁵

What Changes for ACA Marketplace Coverage

The enhanced premium tax credits that had lowered marketplace premiums since 2021 expired at the end of 2025. Senate Republicans voted against extending them in December 2025, and a Democratic three-year extension failed 51–48 the same night.⁹¹⁰

Several administrative rules changed at the same time. Automatic renewals ended; you now have to verify income, residence, and family size each year. The annual open enrollment period ends December 15 rather than January 15. Lower-income households can no longer get financial aid if they sign up during a special enrollment period. Repayment caps on excess premium tax credits are gone, so if your income comes in higher than estimated, you owe the full overpayment back starting with the 2026 tax year.¹⁰

Starting January 1, 2027, many legal immigrants, including refugees and people with Temporary Protected Status, lose eligibility for subsidized marketplace coverage. Medicare coverage also ends for most non-U.S. citizens (green card holders are excluded) within 18 months of enactment.¹⁰¹ On the plus side for savers, all bronze and catastrophic marketplace plans are now eligible for health savings accounts.⁸

How Many People Lose Coverage and What Premiums Look Like

The CBO projects 10 million more uninsured Americans by 2034 from the reconciliation law itself: 7.5 million from Medicaid and CHIP cuts (5.3 million from work requirements alone) and 2.4 million from marketplace changes. Losses ramp up over time, with 1.3 million newly uninsured by 2026, 5.2 million by 2027, and 8.6 million by 2029. Over 76% of the ten-year Medicaid spending reductions land in the second half of the decade. Add the expiration of enhanced premium tax credits, which the CBO previously estimated would push another 4.2 million into the uninsured, and the total climbs to roughly 15 million by 2034.³

Benchmark ACA premiums rose 21.7% for 2026, compared with an average of about 2% annual growth over the prior five years. About 7.3 million fewer people held subsidized marketplace coverage, and 21 states saw the number of participating insurers drop, with Aetna exiting all of its marketplace regions.⁴ State-level projections cited by Senate Democrats put average increases at 170% in Colorado, 38% in New York, and up to 107% for rural residents in states using the federal marketplace.¹¹

The Subsidy Fight and What May Still Change

The subsidy expiration produced a wave of competing bills, none of which has become law. In December 2025 the House passed H.R. 6703 on a party-line vote. That bill did not extend the enhanced tax credits. Instead it allowed small businesses to offer association health plans, tightened rules on pharmacy benefit managers, and funded a separate cost-sharing subsidy meant to reduce out-of-pocket costs, with the cost-sharing funds barred from covering plans that include abortion services.¹²¹³ The Senate never advanced it.

Senate Republicans proposed a different structure, the Cassidy-Crapo plan, which would have deposited $1,000 for adults 18–49 and $1,500 for adults 50–64 into individual health accounts and steered enrollees toward bronze or catastrophic plans. It failed 51–48.⁹ In January 2026 the House passed H.R. 1834 by 230–196, and that bill also stalled in the Senate. As of mid-2026, a bipartisan Senate effort called the Consumer Affordability and Responsibility Enhancement (CARE) Act is being finalized. It would reestablish enhanced tax credits for two years with income caps, minimum premium payments, and expanded HSA access.¹⁴ Abortion coverage restrictions remain the main sticking point between the parties.¹⁵

HSAs and Deregulated Plan Options

A common thread across GOP proposals is expanding tax-advantaged health accounts as an alternative to direct premium subsidies. HSAs are triple tax-advantaged, meaning contributions, growth, and qualified withdrawals are all tax-free, but they require enrollment in a high-deductible health plan. The 2026 contribution limit for individual coverage is $4,300.¹⁶

The math gap has been the main critique. The average bronze plan deductible in 2026 is about $7,500, well above the $1,000–$1,500 deposit amounts proposed under Cassidy-Crapo. Analysts at the CBO and elsewhere have warned that pushing healthier enrollees toward low-premium, high-deductible plans could fragment insurance risk pools and drive up premiums for people who stay in comprehensive coverage.¹⁷ Data cited by Senate Democrats shows nearly half the tax benefit from HSAs goes to households earning over $200,000, and only 4% to those earning under $50,000.¹⁶

The wider deregulation strategy also promotes association health plans, which let small businesses and self-employed workers band together to buy coverage, and short-term limited-duration plans, which can be cheaper but can deny coverage based on health status and exclude benefits like maternity care and mental health services. Under Section 1332 waiver guidance originally issued in 2018, states can count enrollment in these non-ACA-compliant plans toward federal coverage benchmarks and use pass-through funds to subsidize them.¹⁸

Drug Pricing and TrumpRx

Drug pricing is the one area where GOP action has moved past proposals. In February 2026 the administration launched TrumpRx.gov, a portal where patients with prescriptions can access discounted drugs from manufacturers that struck deals with the White House. At launch, five manufacturers participated — AstraZeneca, Eli Lilly, EMD Serono, Novo Nordisk, and Pfizer — covering 40 branded medicines. Headline discounts included Ozempic reduced from $1,028 to as low as $199, and the pill form of Wegovy from $1,349 to as low as $149.¹⁹ By mid-2026 the site had added more than 600 generic drugs and had begun linking to third-party discount programs including GoodRx and Cost Plus Drugs. Independent analysis has questioned whether the portal offers savings beyond existing discount programs, and the discounted prices are generally not available at independent pharmacies, affecting the roughly 20% of Americans who rely on rural pharmacies.²⁰

On the legislative side, a government funding bill signed earlier in 2026 added transparency requirements and banned pharmacy benefit managers from tying their compensation to drug manufacturers’ list prices in Medicare Part D.²¹ The reconciliation law also broadened the orphan drug exemption from the Medicare Drug Price Negotiation Program.¹

The January 2026 White House Framework

On January 15, 2026, the White House released a one-page document titled “The Great Healthcare Plan.” It called on Congress to codify most-favored-nation drug pricing, redirect ACA premium subsidies from insurers to consumers, fund a cost-sharing reduction program the White House said would save $36 billion and lower ACA premiums by more than 10%, end PBM kickbacks, expand over-the-counter drug availability, and impose plain-English transparency rules on insurers.²²²

The Committee for a Responsible Federal Budget estimated the plan’s cost-reduction measures could save about $50 billion over a decade, but warned that the consumer subsidy proposal could increase federal borrowing by up to $350 billion over ten years depending on design.²³ The framework has not been introduced as legislation. Reporting from January 2026 described it as unlikely to advance, with Speaker Mike Johnson publicly distancing himself from the most-favored-nation drug pricing element. Congressional leaders instead attached a narrower bipartisan health agreement to a $1.2 trillion funding package that was largely silent on the White House proposals.²⁴

Pre-Existing Conditions

Republicans have said their proposals protect people with pre-existing conditions, and the House GOP bill from December 2025 explicitly bars association health plans from charging individual workers or family members more based on pre-existing conditions or excluding those conditions from coverage. There is a limit to that protection. Association health plans are allowed to set premiums based on the risk profile of a participating business, so while an individual worker is protected within a plan, the cost to a particular small business can vary with the health of its workforce.²⁵ Short-term limited-duration plans, promoted separately, can still deny coverage based on health status.¹⁸

1
KFF. What Could the Health-Related Provisions in the Reconciliation Bill Mean for Older Adults
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The White House. Great Healthcare
3
Georgetown University Center for Children and Families. New CBO Health Coverage Estimates of Budget Reconciliation Law
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Urban Institute. Understanding the Extraordinary Increase in ACA Premiums, 2026
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KFF. Allocating CBOs Estimates of Federal Medicaid Spending Reductions Across the States
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American Hospital Association. Resources on the One Big Beautiful Bill Act Signed Into Law
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CBPP. How States Will Implement HR 1s Medicaid Policies
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American Hospital Association. Dueling Senate Bills Address Health Care Affordability, Fail to Pass
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CNBC. GOP Big Beautiful Bill to Deal Shock to the ACA Marketplace
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16
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17
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18
KFF. New Rules for Section 1332 Waivers, Changes and Implications
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The White House. President Donald J Trump Launches TrumpRx.gov
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American Enterprise Institute. The House GOP Plays It Safe on Health Care