2025 ACA Enhanced Subsidies Expire: Reform Proposals for Healthcare Transparency

As 2025 approaches, enhanced subsidies under the Affordable Care Act (ACA), initially introduced during the pandemic, are set to expire. These temporary subsidies have extended financial support for millions of Americans but also mask the true cost of healthcare, complicating efforts to introduce sustainable reforms focused on choice, transparency, and competition. Key healthcare reform proposals for lawmakers include expanding the flexibility of Health Savings Accounts (HSAs) to allow spending on insurance premiums, especially for plans through ACA exchanges. This change would enhance patient control over healthcare spending and improve price transparency by enabling subsidy funds to replenish individual HSAs rather than subsidizing insurers directly. Another reform involves easing federal regulations to facilitate the formation and operation of Association Health Plans (AHPs), allowing small businesses to collectively purchase coverage. This approach aims to leverage economies of scale and improve bargaining power, potentially lowering health plan costs similar to large corporations. Additionally, legislative efforts to reform the drug supply chain focus on altering the financial incentives for Pharmacy Benefit Managers (PBMs). Currently, PBM revenues are tied to drug prices, which can promote the use of higher-cost medications. By decoupling PBM profits from drug costs, reforms would encourage prioritizing patient access to effective, affordable medicines, including generics. Overall, the expiration of enhanced ACA subsidies presents an opportunity for lawmakers to pursue structural reforms targeting systemic inefficiencies rather than extending short-term government support. These policy shifts aim to foster a more transparent, competitive, and cost-effective healthcare environment benefiting families and small businesses nationwide.