KFF Health News: Team Trump’s Strategy to Tackle Rising Obamacare Premiums: Reduced Coverage Options
September 17, 2025
KFF Health News: Team Trump’s Answer to Ballooning Obamacare Premiums: Less Generous Coverage
In response to the anticipated surge in insurance premiums affecting millions of Obamacare customers next year, officials from the Trump administration are advocating for plans that offer less generous benefits and higher deductibles. This shift aims to encourage more individuals to consider these options as a way to manage rising costs.
The agency overseeing the Affordable Care Act (ACA) announced earlier this month an expansion of eligibility for “catastrophic” plans available in ACA online marketplaces. These plans require individuals to incur over $10,000 in annual deductibles before most medical costs are covered, but they come with lower monthly premiums compared to other ACA policies.
This decision reflects growing apprehension among Republicans regarding potential political repercussions if Congress fails to extend the larger tax credits established during the COVID-19 public health emergency. These enhanced subsidies are set to expire at the end of the year, leading to an average 75% increase in premium costs, according to KFF, a health information nonprofit that includes KFF Health News.
A bipartisan group of House lawmakers has introduced legislation to extend these enhanced subsidies for an additional year, aiming to maintain support through the midterm congressional elections in fall 2026. However, the future of this legislation remains uncertain, as many Republicans oppose extending the extra tax credits, which could cost at least $335 billion over a decade. Without an extension, tax credit amounts would revert to pre-pandemic levels.
“They spent the last 15 years against the ACA, so a lot will be steadfast, but others are worried about the effect of massively spiked premiums on their constituents,” remarked a Democratic Senate staffer who requested anonymity due to media restrictions.
Currently, Republicans hold a slim majority in Congress, increasing the stakes for voters who may blame them for losing ACA tax credits.
Catastrophic plans, a lesser-known type of ACA policy, have primarily been available to individuals under 30. While they offer lower monthly premiums, they come with higher annual deductibles, set at the out-of-pocket maximum for the year: $10,600 for individuals and $21,200 for families in 2026.
A deductible is the amount patients must pay for healthcare before insurance covers most services. Catastrophic plans do allow for three primary care visits per year without requiring full deductible payment, and, like other ACA policies, they cover preventive services such as cancer screenings and vaccines at no cost.
These catastrophic plans will automatically appear on the federal marketplace, healthcare.gov, for consumers who lose tax credit coverage due to their household income. Additionally, those who still qualify for tax credits but not for subsidies that reduce out-of-pocket costs may also be eligible, although they will need to submit paperwork.
“By expanding access to catastrophic plans, we are ensuring that hardworking individuals facing unexpected hardships can obtain affordable coverage that protects them from overwhelming medical expenses,” stated Centers for Medicare & Medicaid Services Administrator Mehmet Oz in a statement.
However, it remains uncertain whether these policy changes will attract more consumers. Catastrophic plans are not available in all states, and the high deductibles can deter potential enrollees.
“It’s a significant amount of money,” noted Louise Norris, a health insurance analyst and broker who frequently writes about the ACA. “A full-price catastrophic plan is still beyond the reach of many, but this move aims to provide a slightly more affordable option.”
Interest in catastrophic plans has been limited, with only about 54,000 out of 24 million enrollees currently opting for this coverage, according to government data.
“Uptake has always been quite low,” said Katie Keith, director of the O’Neill Institute’s Center for Health Policy and the Law at Georgetown University. “It’s not a bad option if it’s the only one available, but I question whether consumers are actively seeking this type of coverage.”
The Centers for Medicare & Medicaid Services (CMS) plans to grant a “hardship” designation for those who lose ACA tax credits next year, allowing them to enroll in catastrophic plans. Most likely to qualify are individuals earning more than four times the federal poverty rate ($62,600 for an individual this year, or $106,600 for a family of three), who will lose access to premium subsidies if Congress does not extend the current enhanced tax credits. The cost of premiums remains uncertain, as insurers may adjust their rates based on anticipated enrollment changes.
AHIP, the insurance industry lobbying group, is actively advocating for the extension of larger tax credits. While they did not comment specifically on the impact of the new guidance on catastrophic health plan premiums, AHIP spokesperson Chris Bond stated that “while catastrophic plans can provide important coverage for specific needs, they are not a substitute for affordable comprehensive coverage.”
Additional challenges exist, as insurers do not offer plans in 10 states: Alaska, Arkansas, Indiana, Louisiana, Mississippi, New Mexico, Oregon, Rhode Island, Utah, and Wyoming. Where available, options are often limited. For instance, a 25-year-old in Orlando, Florida, had access to 61 “bronze” plans, the lowest coverage tier for ACA shoppers, but only three catastrophic plans.
Policy experts emphasize the importance of consumers exploring all options during the annual open enrollment period, which begins on November 1. In addition to catastrophic and bronze plans, there are also “silver” and “gold” plans, each with varying premiums and deductibles.
Bronze plans feature the lowest premiums but the highest deductibles; the average bronze deductible this year is $7,186, still lower than catastrophic plans, according to KFF.
While catastrophic plan deductibles are high, they are comparable to some bronze plans, Norris noted. Those who choose catastrophic plans are not eligible for any ACA tax subsidies to assist with monthly premiums.
A pending court case may provide lawmakers concerned about voter backlash on Obamacare changes with an unexpected reprieve. In late August, a federal judge in Maryland temporarily halted some changes mandated by the Trump administration for the upcoming year. These changes included additional verification paperwork requirements for certain individuals enrolling in ACA plans, which were challenged by several cities due to concerns that they could result in up to 1.8 million people losing their insurance in 2026.
The court ruling stayed several provisions of the Trump administration rules, including income verification requirements affecting individuals below the poverty level and those without tax return information. The ruling also paused verification requirements for individuals applying outside the annual open enrollment period and blocked a $5 monthly charge for those automatically enrolled in plans where subsidies cover the entire premium unless they confirm their selection with the marketplace.
The Trump administration is appealing this decision, but the case may not be resolved until next year, according to Keith at Georgetown University.
This situation likely means that the suspension of the new requirements will remain in effect for this year’s open enrollment season. Keith remarked that the ruling is a “bigger deal” than the expansion of catastrophic plan eligibility, stating that “consumers across the country won’t have to deal with the red tape the Trump administration rushed to implement ahead of the new plan year,” and that it also “helps people maintain their coverage.”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
September 17, 2025
KFF Health News: Team Trump’s Answer to Ballooning Obamacare Premiums: Less Generous Coverage
In response to the anticipated surge in insurance premiums affecting millions of Obamacare customers next year, officials from the Trump administration are advocating for plans that offer less generous benefits and higher deductibles. This shift aims to encourage more individuals to consider these options as a way to manage rising costs.
The agency overseeing the Affordable Care Act (ACA) announced earlier this month an expansion of eligibility for “catastrophic” plans available in ACA online marketplaces. These plans require individuals to incur over $10,000 in annual deductibles before most medical costs are covered, but they come with lower monthly premiums compared to other ACA policies.
This decision reflects growing apprehension among Republicans regarding potential political repercussions if Congress fails to extend the larger tax credits established during the COVID-19 public health emergency. These enhanced subsidies are set to expire at the end of the year, leading to an average 75% increase in premium costs, according to KFF, a health information nonprofit that includes KFF Health News.
A bipartisan group of House lawmakers has introduced legislation to extend these enhanced subsidies for an additional year, aiming to maintain support through the midterm congressional elections in fall 2026. However, the future of this legislation remains uncertain, as many Republicans oppose extending the extra tax credits, which could cost at least $335 billion over a decade. Without an extension, tax credit amounts would revert to pre-pandemic levels.
“They spent the last 15 years against the ACA, so a lot will be steadfast, but others are worried about the effect of massively spiked premiums on their constituents,” remarked a Democratic Senate staffer who requested anonymity due to media restrictions.
Currently, Republicans hold a slim majority in Congress, increasing the stakes for voters who may blame them for losing ACA tax credits.
Catastrophic plans, a lesser-known type of ACA policy, have primarily been available to individuals under 30. While they offer lower monthly premiums, they come with higher annual deductibles, set at the out-of-pocket maximum for the year: $10,600 for individuals and $21,200 for families in 2026.
A deductible is the amount patients must pay for healthcare before insurance covers most services. Catastrophic plans do allow for three primary care visits per year without requiring full deductible payment, and, like other ACA policies, they cover preventive services such as cancer screenings and vaccines at no cost.
These catastrophic plans will automatically appear on the federal marketplace, healthcare.gov, for consumers who lose tax credit coverage due to their household income. Additionally, those who still qualify for tax credits but not for subsidies that reduce out-of-pocket costs may also be eligible, although they will need to submit paperwork.
“By expanding access to catastrophic plans, we are ensuring that hardworking individuals facing unexpected hardships can obtain affordable coverage that protects them from overwhelming medical expenses,” stated Centers for Medicare & Medicaid Services Administrator Mehmet Oz in a statement.
However, it remains uncertain whether these policy changes will attract more consumers. Catastrophic plans are not available in all states, and the high deductibles can deter potential enrollees.
“It’s a significant amount of money,” noted Louise Norris, a health insurance analyst and broker who frequently writes about the ACA. “A full-price catastrophic plan is still beyond the reach of many, but this move aims to provide a slightly more affordable option.”
Interest in catastrophic plans has been limited, with only about 54,000 out of 24 million enrollees currently opting for this coverage, according to government data.
“Uptake has always been quite low,” said Katie Keith, director of the O’Neill Institute’s Center for Health Policy and the Law at Georgetown University. “It’s not a bad option if it’s the only one available, but I question whether consumers are actively seeking this type of coverage.”
The Centers for Medicare & Medicaid Services (CMS) plans to grant a “hardship” designation for those who lose ACA tax credits next year, allowing them to enroll in catastrophic plans. Most likely to qualify are individuals earning more than four times the federal poverty rate ($62,600 for an individual this year, or $106,600 for a family of three), who will lose access to premium subsidies if Congress does not extend the current enhanced tax credits. The cost of premiums remains uncertain, as insurers may adjust their rates based on anticipated enrollment changes.
AHIP, the insurance industry lobbying group, is actively advocating for the extension of larger tax credits. While they did not comment specifically on the impact of the new guidance on catastrophic health plan premiums, AHIP spokesperson Chris Bond stated that “while catastrophic plans can provide important coverage for specific needs, they are not a substitute for affordable comprehensive coverage.”
Additional challenges exist, as insurers do not offer plans in 10 states: Alaska, Arkansas, Indiana, Louisiana, Mississippi, New Mexico, Oregon, Rhode Island, Utah, and Wyoming. Where available, options are often limited. For instance, a 25-year-old in Orlando, Florida, had access to 61 “bronze” plans, the lowest coverage tier for ACA shoppers, but only three catastrophic plans.
Policy experts emphasize the importance of consumers exploring all options during the annual open enrollment period, which begins on November 1. In addition to catastrophic and bronze plans, there are also “silver” and “gold” plans, each with varying premiums and deductibles.
Bronze plans feature the lowest premiums but the highest deductibles; the average bronze deductible this year is $7,186, still lower than catastrophic plans, according to KFF.
While catastrophic plan deductibles are high, they are comparable to some bronze plans, Norris noted. Those who choose catastrophic plans are not eligible for any ACA tax subsidies to assist with monthly premiums.
A pending court case may provide lawmakers concerned about voter backlash on Obamacare changes with an unexpected reprieve. In late August, a federal judge in Maryland temporarily halted some changes mandated by the Trump administration for the upcoming year. These changes included additional verification paperwork requirements for certain individuals enrolling in ACA plans, which were challenged by several cities due to concerns that they could result in up to 1.8 million people losing their insurance in 2026.
The court ruling stayed several provisions of the Trump administration rules, including income verification requirements affecting individuals below the poverty level and those without tax return information. The ruling also paused verification requirements for individuals applying outside the annual open enrollment period and blocked a $5 monthly charge for those automatically enrolled in plans where subsidies cover the entire premium unless they confirm their selection with the marketplace.
The Trump administration is appealing this decision, but the case may not be resolved until next year, according to Keith at Georgetown University.
This situation likely means that the suspension of the new requirements will remain in effect for this year’s open enrollment season. Keith remarked that the ruling is a “bigger deal” than the expansion of catastrophic plan eligibility, stating that “consumers across the country won’t have to deal with the red tape the Trump administration rushed to implement ahead of the new plan year,” and that it also “helps people maintain their coverage.”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.
