Impact of Republican Budget Plan on ACA Subsidies and Enrollment Discrepancies
During discussions last fall, incorrect interpretations emerged regarding the estimated impact of the Republican budget plan on subsidies for individuals enrolled in the Affordable Care Act (ACA). Critics suggested that approximately 22.4 million enrollees could see their financial assistance reduced. However, Jeremy Nighossian highlighted discrepancies in these figures, citing issues like misreported incomes and enrollment inaccuracies potentially facilitated by certain brokers.
Recent analyses by the Paragon Health Institute estimate that by 2026, approximately $25 billion will be allocated to cover insurance costs for 6.2 million individuals who may be improperly enrolled in ACA plans. Nighossian conducted a comparison between ACA enrollment figures reported by the Centers for Medicare & Medicaid Services (CMS) and those in the Census Bureau’s Current Population Survey (CPS). While both data sets aligned from 2018 to 2021, discrepancies appeared in 2022, a period influenced by expanded subsidies.
Further insights from Paragon attribute the misalignment partially to enrollees declaring incomes between 100% and 150% of the federal poverty line (FPL), with more than half of ACA enrollments in 2026 within this income bracket. In certain states, there were more ACA enrollees in this income range than the number of individuals officially estimated to be in that income group, indicating potential enrollment misreporting.
Data comparisons across income segments revealed significant differences occurring mainly in the 100%–150% FPL range since 2022. Official CMS enrollments diverged from CPS survey results, and this split widened through 2024 with official figures nearly tripling survey estimates during the period. In other income ranges delineated by ACA subsidy thresholds, the official and survey enrollments were closely aligned.
The shift in official enrollment from 2023 to 2024 coincided with the conclusion of Medicaid continuous coverage provisions, causing individuals near Medicaid eligibility to turn to ACA Marketplace plans. This change is believed to be a factor behind the enrollment surge in the 100%–150% FPL group. However, it does not explain the growing divergence between official enrollment data and survey estimates, as those transitioning from Medicaid would likely report more accurately in the CPS surveys.
Looking ahead, the completion of Medicaid unwinding in August 2024, just before the 2025 enrollment period, could provide data revealing if accurate survey figures align with CMS records. Without this alignment, understanding the enrollment surge becomes challenging, suggesting potential issues in accurately capturing low-income group data.
In a letter to The Washington Post, David Merritt remarked that the Census Bureau's data and CPS often struggle with capturing accurate counts of low-income populations. This persistent undercounting helps explain some discrepancies but fails to clarify why such disparities have grown recently. Addressing this gap is vital for ensuring the ACA achieves its goal effectively without unnecessary taxpayer expenditure.