Health Issues

What will happen to Marketplace health insurance subsidy availability – and subsidy size – when the subsidy enhancements instituted under the American Rescue Plan (ARP) and extended by the Inflation Reduction Act (IRA) sunset after 2025? It’s a question that health reform experts and media who cover health reform have been asking as political control of the White House and Congress is about to shift in 2025.

To get an idea of how sunsetting the subsidy enhancements would impact subsidy eligibility and subsidy size, we looked at states with the highest average pre-subsidy Marketplace premiums, which in turn have among the largest subsidies. We found some examples of how premium subsidy amounts would decrease or be eliminated entirely when the ARP’s subsidy enhancements expire at the end of 2025 – unless Congress acts to further extend the enhancements.

But the ARP subsidy enhancements are scheduled to sunset at the end of 2025 unless they’re extended again by Congress. ^{When the subsidy enhancements end, Marketplace subsidy amounts will decrease for everyone who receives them – and will disappear altogether for some enrollees. Let’s take a look at why this would happen, and how enrollees in some states would be affected:}

ACA subsidy rules prior to ARP

When the subsidy enhancements sunset at the end of 2025, the rules will revert – starting in 2026 – to the subsidy rules set by the ACA. Here’s how the ACA premium subsidy rules worked prior to the ARP:

• Subsidies were available if household income was at least 100% of the federal poverty level (FPL), or more than 138% FPL in states that had expanded Medicaid eligibility under the ACA. However,
• Subsidies were not available if household income was more than 400% FPL, regardless of the percentage of income a household would have to spend to buy coverage. This resulted in a subsidy cliff at 400% FPL.
• For subsidy-eligible enrollees, the subsidy amount was based on the enrollee having to pay a certain percentage of their household income for the benchmark plan (second-lowest-cost Silver plan). That percentage varied with household income, and ranged between roughly 2% and 9.5% of household income. (This is called the “applicable percentage” and the range was indexed each year by the IRS.)

Temporary subsidy enhancements under the ARP and IRA

Now let’s take a look at how the ARP temporarily changed these rules, and how the IRA extended those changes through 2025:

• The lower income threshold for premium subsidy eligibility did not change.
• But the 400% FPL cap on subsidy eligibility was temporarily eliminated, so we haven’t had a subsidy cliff for the last few years. Instead, people with household income over 400% FPL are eligible for subsidies if the cost of the benchmark plan is more than 8.5% of their household income. (This assumes they meet other subsidy eligibility requirements, including not having access to Medicaid, premium-free Medicare Part A, or an employer’s plan that’s considered affordable and provides minimum value.)
• For subsidy-eligible enrollees, the percentage of household income that the enrollee has to pay for the benchmark Silver plan has been reduced across the board. Instead of ranging from 2% to 9.5% of household income, it now ranges from 0% to 8.5% of household income. ^{And again, that now applies to households with income above 400% FPL.}

So the ARP subsidy enhancements, extended by the IRA, had two major effects:

• They allow Marketplace enrollees with household income above 400% FPL to potentially qualify for premium subsidies.
• They reduced the percentage of income that people pay for the benchmark plan at all income levels.

For example, under the original ACA rules, a person earning 150% FPL would pay 4% of their income for the benchmark plan, ^{and their subsidy would cover the rest.}

But under ARP rules, a person earning 150% FPL pays 0% of their income for the benchmark plan. Their subsidy covers the entire cost of the premium.

We won’t know the 2025 FPL numbers (used to determine subsidy eligibility in 2026) until early 2025. And we also don’t yet know what the exact applicable percentage range would be for the 2026 plan year when the ARP subsidy enhancements sunset, as the IRS will have to calculate and publish those numbers. But it will be roughly in the range of 2% to 9.5%, with subsidies ending altogether at above 400% FPL. (To clarify: from 2015 through 2020, the range had increased four times and decreased twice. As of 2020, it stood at 2.06% to 9.78%.)

This chart collection explores National Health Expenditure (NHE) data from the Centers for Medicare and Medicaid Services (CMS). These data offer insights into changes in health spending over time in the U.S., as well as the driving forces behind spending growth. The data specifically show how healthcare spending changed in 2023. A related interactive tool contains more of the latest NHE data.

The slideshow is part of the Peterson-Kaiser Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

Now updated with 2023 data, the National Health Spending Explorer on the Peterson-KFF Health System Tracker provides up-to-date information on U.S. health spending by federal and local governments, private companies, and individuals. It was developed by KFF using data from the National Health Expenditure Account and will be updated annually with each data release.

A short video tutorial provides instructions for the tool.

A partnership of KFF and the Peterson Center on Healthcare, the Peterson-KFF Health System Tracker is an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

This analysis for the KFF-Peterson Health System Tracker compares the Medicare’s first-ever negotiated drug prices under a new process created by the Inflation Reduction Act of 2022 to current U.S. list prices, prices negotiated by the Department of Veterans Affairs (VA), and prices in 11 countries of similar size and wealth.

It finds that Medicare’s negotiated prices for 10 high-expenditure prescription drugs are lower than what private Medicare drug plans had been paying, but still much higher than the prices available in other countries – 78% more on average than the country with the next highest price across 11 other wealthy nations.

The analysis is available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

Hospitals account for 30% of total health care spending—$1.4 trillion in 2022—with expenditures projected to rise rapidly through 2032, contributing to higher costs for families, employers, Medicare, Medicaid, and other public payers. Policymakers have sought to reduce spending on hospital care as part of a broader effort to make health care more affordable and reduce the federal deficit. In recent years, for example, there has been bipartisan interest in site-neutral payment reforms, which would reduce Medicare program and beneficiary spending by aligning Medicare rates for certain outpatient services across care settings. The next Trump administration and Republicans in Congress may also seek to cut Medicaid spending, which could result in fewer dollars flowing to hospitals.

At the same time, there are ongoing questions about the effects of policies that reduce spending on hospital finances and access to care, with particular attention to the implications for rural and safety-net hospitals. For example, Senators Cassidy and Hassan recently released a framework for site-neutral payment reforms that would reinvest savings into rural and high-needs hospitals.

This analysis examines hospital margins for non-federal general short-term hospitals in the U.S from 2018 through 2023, the most recent year with virtually complete cost report data. The analysis is based on RAND Hospital Data, a cleaned version of Medicare cost reports. Total margins are defined as net income (revenues minus expenses) divided by revenues. This analysis focuses on operating margins (instead of total margins) to examine the extent to which hospitals profited or lost money on patient care and other operating activities, rather than on other sources, such as investments. Operating margins are approximated using the same calculation as for total margins after subtracting reported investment income and charitable contributions from revenues. Results for groups of hospitals reflect aggregate margins based on total relevant revenues and expenses, which is equivalent to the average margin after weighting hospitals by their revenue. A number of datasets provide information about hospital finances, though each has limitations, and cost reports are no exception. See Methods for additional information.

Key Takeaways

• Aggregate hospital margins rebounded in 2023 following a large decrease in 2022. This is true for operating margins, which decreased from 8.9% in 2021 to 2.7% in 2022 before increasing to 5.2% in 2023. It is also true for total margins, which decreased from 10.8% in 2021 to 2.3% in 2022 before increasing to 6.4% in 2023. However, both aggregate operating margins and total margins remained below 2019 pre-pandemic levels in 2023.
• Aggregate operating margins were positive in 2023 (5.2%), but about two in five hospitals (39%) had negative margins in that year. About one in five (22%) had operating margins less than -5%.
• Operating margins were higher than average among for-profit hospitals, hospitals with a high share of commercial discharges, and system-affiliated hospitals in 2023. For-profit hospitals had higher operating margins than nonprofit and government hospitals (14.0% versus 4.4% and 3.4%, respectively). Hospitals with a relatively high commercial share of total discharges had higher operating margins than hospitals with low shares (7.5% versus 3.3% among the top versus bottom quarter based on commercial share, respectively) (quartiles are weighted by revenues throughout). System-affiliated hospitals had higher operating margins than independent hospitals (5.8% versus 2.5%).
• Operating margins in 2023 were also higher than average among hospitals with relatively high commercial prices. Operating margins were relatively high among hospitals with commercial prices that were greater than 300% of Medicare rates, especially among hospitals with high commercial shares. In contrast, operating margins were relatively low among hospitals with high Medicaid shares (see below).
• Operating margins were lower than average among hospitals with high Medicaid shares, which was true in both rural and urban areas. Operating margins were lower among hospitals with a relatively high Medicaid share (2.3% among the top quarter of hospitals based on Medicaid shares versus 7.0% among the bottom quarter). Operating margins were relatively low for hospitals with high Medicaid shares in both rural and urban areas (1.7% and 2.3%, respectively).
• Operating margins were lower than average among rural hospitals in 2023. Operating margins were lower among hospitals in rural than urban areas (3.1% versus 5.4%, respectively) and were especially low among hospitals in rural areas that were not micropolitan areas (1.8%), i.e., that did not include and were not closely connected to any substantial population nucleus. However, operating margins were higher among for-profit than nonprofit rural hospitals (8.5% versus 3.5%, respectively). Operating margins were also lower among hospitals with Medicare rural designations, particularly among low-volume hospitals and Medicare dependent hospitals (1.7% and 1.8%, respectively).

Aggregate Hospital Margins Rebounded in 2023 Following a Large Decrease in 2022

Aggregate operating margins decreased from 8.9% in 2021 to 2.7% in 2022 before increasing to 5.2% in 2023 (Figure 1). Similarly, aggregate total margins decreased from 10.8% in 2021 to 2.3% in 2022 before increasing to 6.4% in 2023. While operating and total margins both increased in 2023, they remained below 2019 pre-pandemic levels (6.5% for operating margins and 7.6% for total margins). Operating margins were at a record high in 2021 for hospitals reimbursed under the inpatient prospective payment system (IPPS) but were lower in 2022 than they had been since 2008—i.e., during the Great Recession—according to related analyses from the Medicare Payment and Advisory Commission.

Decreases in operating margins in 2022 were likely due to the erosion of COVID funds, costs associated with labor shortages, and increased supply expenses due to high inflation rates, among other factors. Improvements in 2023 may have been due a number of factors, including stabilizing labor expenses, decreases in average length of stay, and increases in revenue.

Some of the major credit rating agencies have reported relatively stable operating margins among rated not-for-profit health systems from 2022 to 2023 and have projected gradual improvements over time. These trends may differ from the main analysis here because, among other factors, they look at not-for-profit systems and report median (rather than aggregate or weighted average) operating margins. Industry reports, based on a non-representative sample of hospitals, indicate that finances have improved through October 2024 relative to 2022.

Aggregate Operating Margins Were Positive in 2023, But About Two in Five Hospitals (39%) Had Negative Margins

While aggregate operating margins were positive in 2023 (5.2%), operating margins varied substantially across hospitals. On one end of the spectrum, about one in seven hospitals (15%) had relatively high operating margins of at least 15%, while about one in five (22%) had positive but relatively modest margins of less than 5%, including about one in ten (11%) with positive margins of less than 2.5% (not shown). Having positive but modest margins may signal financial challenges for hospitals.

At the same time, about two in five hospitals (39%) had negative margins, and about one in five (22%) had margins of less than -5%. While some of these hospitals may be able to weather financial challenges for a period of time if they have sufficient days of cash on hand, those without sufficient days of cash on hand could be especially challenged to maintain current services or remain open. Based on a prior KFF analysis, the majority of nonprofit hospitals and health systems analyzed with negative operating margins had at least “strong” levels of days cash on hand in 2022, though that analysis was based on data that underrepresent entities likely to be more financially vulnerable.

Operating Margins Were Higher Than Average Among For-Profit Hospitals, Hospitals With High Commercial Discharge Shares, and System-Affiliated Hospitals and Were Lower Than Average Among Hospitals With Low Market Shares in 2023

For-profit hospitals—which accounted for 17% of facilities—had much higher operating margins than nonprofit and government hospitals (14.0% versus 4.4% and 3.4%, respectively) (see Figure 3). For-profit hospitals may have a greater motivation to operate more efficiently and engage in other strategic behaviors to increase their margins, such as focusing on relatively profitable services lines, dropping unprofitable service lines (like obstetrics), or locating in wealthier areas that have more residents with commercial insurance and fewer with public or no insurance. As is the case throughout this analysis, differences in operating margins across groups of hospitals could reflect a variety of factors.

Operating margins were also higher than average among hospitals where commercially-insured patients accounted for a relatively large share of discharges. For example, operating margins were 7.5% versus 3.3% when comparing hospitals in the top versus bottom quarter based on commercial shares (quartiles are weighted by revenues throughout). One factor that likely plays a role in these results is that commercial payers generally reimburse hospital care at higher rates than Medicare and Medicaid, the two other major payers. For instance, a KFF review found that commercial prices were nearly double Medicare rates for hospital services when averaging findings across studies, and one recent analysis found that commercial prices were 254% of Medicare rates for hospital services on average in 2022.

Operating margins were also higher among hospitals affiliated with a health system than independent hospitals (5.8% versus 2.5%). Higher operating margins among system-affiliated hospitals could reflect the effects of consolidation, among other factors. Consolidation might lead to higher margins, for example, to the extent that merging providers are able to reduce operating costs or—as suggested by a large body of evidence—charge higher prices by having greater market power.

Finally, operating margins were lower among hospitals that accounted for a relatively low share of hospital discharges in their market. For example, operating margins were 2.0% versus 7.3% when comparing the bottom versus top quarter of hospitals based on their market share (or the market share of the health system that they are a member of, as applicable). Hospitals with large market shares may be able to negotiate higher rates and, if part of a larger system, benefit from economies of scale, among other factors that could drive higher margins.

Operating Margins in 2023 Were Higher Than Average Among Hospitals With High Prices, Especially Among Those With a Relatively High Commercial Shares

Operating margins were relatively high among hospitals with commercial prices that were greater than 300% of Medicare rates (8.9%) and were even higher (10.5%) among those with a relatively high commercial share of total discharges (i.e., with at least a 25% commercial share) (see Figure 4). In contrast, operating margins were relatively low among hospitals with commercial prices below 200% of Medicare rates (1.0%) and were even lower (0.8%) among those with low commercial patient shares. This aligns with an analysis from researchers at the Urban Institute and Harvard that found that high commercial prices were associated with higher operating margins and more days of cash on hand.

Policymakers have explored a number of options to rein in commercial prices. This analysis suggests that hospitals with the highest prices and largest commercial shares as a group are in a better position to absorb any restraints on prices, though the impact would vary across hospitals.

While Operating Margins Were Higher Than Average Among Hospitals With High Commercial Shares in 2023, They Were Lower Than Average Among Hospitals With High Medicaid Shares, Which Was True in Both Urban and Rural Areas

Hospitals with high commercial shares had relatively high operating margins (e.g., 7.5% versus 3.3% when comparing the top versus bottom quarter of hospitals weighted by revenues based on commercial share) (see Figure 3 above) while hospitals with high Medicaid shares had relatively low operating margins (e.g., 2.3% versus 7.0% when comparing the top versus bottom quarter of hospitals weighted by revenues based on Medicaid share) (see Figure 5).

Operating margins in 2023 were relatively low among hospitals with high Medicaid shares in both rural and urban areas (1.7% and 2.3%, respectively) (see Figure 5). In comparison, the operating margin among all hospitals was 5.2% in 2023. While operating margins were lower among hospitals in rural than urban areas overall (3.1% versus 5.4%, respectively) (see Figure 7 below), hospitals with high Medicaid shares in urban areas stand out as another example of hospitals that were struggling more than others.

Some policymakers are especially attentive to the financial stability of safety-net hospitals given their role in providing access to patients with limited resources and other sources of vulnerability. The share of patients covered by Medicaid may signal the extent to which a given hospital cares for a disproportionate share of low-income patients (see Methods for more detail).

Operating Margins Were Also Lower Than Average Among Hospitals With High Medicare Shares in 2023

Operating margins were 4.3% in 2023 among hospitals in the top quarter based on Medicare share of discharges compared to 5.8% among hospitals in the bottom quarter (see Figure 6). Part of this difference may reflect the fact that hospitals with high Medicare shares were more likely to be in rural areas (54% of hospitals in the top quarter of Medicare shares were in rural areas versus 23% of the hospitals in the bottom quarter). As described below, rural hospitals had lower than average operating margins in 2023.

While operating margins among hospitals in the top quarter of Medicare shares were lower than among hospitals overall, they were higher relative to hospitals in the top quarter of Medicaid shares (4.3% versus 2.3%, respectively).

Operating Margins Were Lower Than Average Among Rural Hospitals in 2023

Operating margins were lower among hospitals in rural versus urban (nonmetropolitan versus metropolitan) areas (3.1% versus 5.4%, respectively) and were especially low among hospitals in rural areas that were not micropolitan areas (1.8%) (Figure 7), i.e., that did not include and were not closely connected to any substantial population nucleus (see Methods for more about urban and rural definitions). While 48 states in this analysis had at least one rural hospital, rural hospitals were distributed unevenly across the country. For example, a quarter of rural hospitals were located in Iowa, Kansas, Minnesota, Nebraska, or Texas. Rural hospitals often face unique financial challenges, such as low patient volume, which may lead to higher costs on average and limit the ability to offer specialized services.

Operating margins varied across rural hospitals in 2023, as was the case when looking at hospitals overall. For example, more than four in ten (44%) rural hospitals had negative operating margins while more than half (56%) had positive operating margins, including one in ten (10%) with operating margins of at least 15%. Operating margins were higher among rural for-profit than rural non-profit hospitals (8.5% versus 3.5%) and lower (0.3%) among rural government hospitals. Operating margins were also higher among system-affiliated versus independent rural hospitals (4.8% versus 0.6%, respectively).

Operating margins were lower among hospitals with Medicare rural designations than other hospitals. Low-volume hospitals (hospitals with few discharges that are a minimum distance from other facilities) and Medicare dependent hospitals (small rural hospitals with high Medicare inpatient shares) had the lowest operating margins (1.7% and 1.8%, respectively) (Figure 7). Operating margins were also lower on average among critical access hospitals (rural hospitals with at most 25 beds that with some exceptions are a minimum distance from other facilities) and sole community hospitals (hospitals that are the only source of short-term, acute inpatient care in a region) relative to hospitals without a Medicare rural designation (4.1% and 4.2%, respectively, versus 5.7%). About half of low-volume, Medicare dependent and sole community hospitals had negative operating margins in 2023 (52%, 52%, and 49%, respectively), as did 40% of critical access hospitals. A smaller share (35%) of hospitals without a Medicare rural designation had negative operating margins.

Senators Cassidy and Hassan recently released a framework for site-neutral payment reforms that some of the savings be reinvested into sole community, low-volume, and Medicare dependent hospitals. As noted above, each of these groups had lower operating margins than did hospitals without a rural designation. The framework does not mention new funds for critical access hospitals, which would likely be exempt from site-neutral payment reforms.

Policymakers have had ongoing concerns about the financial health of rural hospitals and the implications for access to care and the local economy. At the same time, it may be difficult to sustain some rural hospitals—such as those in areas with shrinking populations—and some have argued that care in at least some scenarios should be moved towards other settings, including telehealth, outpatient facilities, and larger regional hospitals.

Operating Margins Were Higher Than Average Among Hospitals With a Large Number of Beds and Among Minor Teaching Hospitals in 2023

Hospitals with greater than 500 beds had higher operating margins (6.3%) than those with fewer beds (e.g., 3.9% among hospitals with 51 to 100 beds) (see Figure 8). Minor teaching hospitals had higher margins (6.2%) than major teaching (4.3%) and non-teaching (5.1%) hospitals. Minor teaching hospitals are defined as facilities with interns or residents but at most one full-time equivalent intern or resident for every four beds, and major teaching hospitals are defined as facilities with more.

Operating Margins Varied Across States in 2023

Aggregate operating margins were at least 10% in five states (Alaska, Florida, Texas, Utah, and Virginia) but negative in four states (Michigan, New Mexico, Washington, and Wyoming) (see Figure 9). Differences likely reflect a variety of unique state circumstances, such as demographics, hospital ownership and cost structure, commercial reimbursement rates, and state and local health and tax policy. For instance, operating margins may have been high in Texas in part because the state has a relatively large number of for-profit hospitals (which have higher operating margins on average), among other factors. The same is true of Florida, which may have also had high operating margins in part due to the relatively high commercial prices in the state. As an example of a state on the other end of the spectrum, margins may have been relatively low in Wyoming in part because the vast majority of hospitals are in rural areas (92% compared to 40% of all hospitals), among other factors. It is also possible that a small number of hospitals with large revenue could have a large impact on aggregate operating margins, especially in states with relatively few hospitals, like Alaska.

The Biden administration has proposed to allow Medicare and require Medicaid to cover drugs used to treat obesity by reinterpreting the statutory language that currently prohibits coverage of drugs used for weight loss under Medicare and permits but does not require states to cover these drugs for weight loss under Medicaid. This reinterpretation reflects an evolution in the understanding of obesity as a disease and weight loss as conferring real health benefits in people with obesity rather than being merely for cosmetic purposes. It also comes amidst high and growing demand for and use of a relatively new class of highly effective, but also very expensive, drugs being used to treat obesity, known as GLP-1s.

Under current law, people on Medicare can get anti-obesity drugs covered by Part D, Medicare’s outpatient drug benefit, only if they are used for a medically accepted FDA-approved indication other than obesity, like diabetes or cardiovascular disease risk reduction. State Medicaid programs also have to cover these drugs for indications such as diabetes or cardiovascular disease risk reduction, but only 13 states currently cover these drugs for obesity treatment as well. These limitations on coverage in Medicare and Medicaid mean that millions of people who have obesity and might benefit from these drugs may be unable to access them due to their high prices. But even with these coverage limits in place, gross spending on these drugs for approved uses in Medicare and Medicaid has skyrocketed in recent years, totaling $4 billion in Medicaid in 2023 and close to $6 billion in Medicare in 2022 for selected GLP-1s.

The new Biden administration proposal would authorize Medicare and Medicaid coverage of anti-obesity medications for people with obesity but not people who are overweight. While coverage would be available for Medicare and Medicaid enrollees with obesity, Medicare Part D drug plans and state Medicaid programs could still apply utilization management tools such as prior authorization, which could limit access. According to the Centers for Medicare & Medicaid Services, the proposal would increase Medicare spending by $25 billion and Medicaid spending by $15 billion over 10 years (net of rebates) and would apply to around 3.4 million people with Medicare and 4 million people with Medicaid. Because Medicaid is jointly financed by the states and the federal government, CMS estimates the federal government would pay $11 billion and states would pay nearly $4 billion.

Rising prescription drug costs are an ongoing concern for states, and state Medicaid programs reported the high cost of obesity drugs as key reason for not expanding coverage prior this proposal. The potential cost to Medicare is lower than some other estimates because it assumes many people with obesity can already get Medicare coverage of these drugs for other medically accepted indications, and CMS’s proposal would not apply to people who are overweight. Nonetheless, the combination of high demand, new uses, and high prices for these treatments is likely to place tremendous pressure on Medicare spending, Part D plan costs, and premiums for Part D coverage over time.

KFF analysis has found most large employer firms currently do not cover GLP-1 drugs for weight loss and coverage in ACA Marketplace plans remains limited, but if finalized, the proposed change to Medicare and Medicaid coverage could put pressure on other payers to expand access. If it becomes official coverage policy, this change would also lift the burden off lawmakers in Congress who have repeatedly introduced legislation to authorize Medicare coverage of anti-obesity drugs but who may have been stymied by the potential cost of doing so. But as the Biden administration prepares to hand the reins over to the incoming Trump administration, a key question is whether the rule will be finalized as proposed under new leadership at CMS, changed in some way, or pulled back altogether.

The outcome of the 2024 presidential election is settled with Republicans regaining control of the U.S. house and controlling the U.S. Senate, with President-elect Donald Trump set to begin a second term in January 2025. With most votes counted and races called, this analysis takes a deeper dive into the role that health care issues played in the 2024 race. In the first presidential election since the overturning of Roe v. Wade and amid voters’ increased anxieties about the country’s economic direction, health care issues influenced voters’ decisions in complicated but rational ways.

In the 2022 midterm elections, Democratic candidates were able to capitalize on their base’s enthusiasm for protecting reproductive rights to encourage turnout in key electoral races. Two years post-Dobbs, voters in 10 states (including some staunchly Republican states) were directly voting on ballot measures aimed at expanding or protecting abortion access in their states, presenting a real test for abortion rights advocates who had seen other conservative states enshrine abortion rights or push back on restrictions through ballot initiatives in 2022 and 2023. Nationally, while abortion hadn’t risen to a top campaign issue when President Biden was the Democratic candidate – perhaps due to his reticence on the issue – when Vice President Harris became the nominee, the issue became more salient for voters who were confronted with two very different candidates talking about their positions on reproductive rights. President-elect Trump had successfully garnered support from the pro-life contingent of the Republican Party due to his Supreme Court appointments who overturned Roe, while he repeatedly stated throughout his campaign that he was not in favor of passing a national ban. Vice President Harris, on the other hand, embraced reproductive freedom as a core campaign issue during her short bid for president.

Yet, abortion policy never rose to a top campaign issue for voters. Instead, concerns about inflation continued to take center stage, and candidates on both sides of the aisle were tasked with crafting messages about how they would address voters’ economic concerns. Previous KFF polls before and during the campaign documented the important role that health care expenses played in voters’ economic worries.

This analysis examines the role that abortion policy and abortion-related state ballot initiatives, as well as the economy and health care costs, played in the 2024 election. In partnership with The Associated Press (AP), KFF added supplemental questions to AP VoteCast, a survey of around 120,000 voters conducted nationally and in 48 states, to provide a deep dive into how voters were weighing health care issues as they made their decisions. These questions and KFF’s analysis shed light on the role health care issues, including abortion, played in shaping the concerns voters brought to the ballot box, as well as their decisions about whether to vote and whom to vote for.

Key Findings

• President-elect Trump won key electoral victories in four states where voters also chose to expand or protect abortion access. Trump garnered small but important shares of votes from those who voted in favor of ballot measures protecting abortion access, including support from about a third of those who voted in favor of abortion access in Missouri and three in ten voters in the battleground states of Nevada and Arizona. Large shares of pro-Trump, pro-abortion voters say they think abortion should be legal, but few say it is the most important factor in their vote. In addition, in Arizona, a substantial share of this group (more than a quarter) are young men, who are less motivated by the issue of abortion than by other issues.
• Voters in seven states voted to expand abortion access through abortion-related ballot measures, while the ballot measures to expand or protect abortion access failed in Florida, South Dakota, and Nebraska. In Florida, while the ballot measure failed to reach the 60% threshold required to pass in the state (57% voted “yes”), it garnered support from majorities of voters across key demographics (including large majorities of Democratic voters (93%), Black voters (83%), independent voters (72%), women voters (66%), and Hispanic voters (65%)). However, most Florida Republicans opposed the measure (58%). Similarly, in Nebraska and South Dakota, large majorities of Republicans opposed expanding abortion access – helping to ensure the ballot measures’ defeat. And, while majorities of women voters in Nebraska voted in favor of expanding abortion rights, a majority of South Dakota women voters voted against.
• Nationwide, abortion continued to be a motivating factor for a notable share of women voters in 2024. About three in ten women voters said abortion policy was the “single most important factor” in their vote, including 44% of Black women, 39% of Hispanic women, and one third of women voters between the ages of 18 and 44. Black women and Hispanic women were also more likely than White women to say abortion policy had a major impact on their decision to turn out and which candidate they supported. Black and Hispanic women disproportionately voted for Vice President Harris over President-elect Trump.
• Voters’ economic anxieties were pervasive throughout the 2024 presidential campaign, and four in ten (39%) voters said “the economy and jobs” was the most important issue facing the country. With this in mind, voters also said they were worried about being able to afford many household expenses, including the cost of health care. President-elect Trump garnered majority support among voters who were most concerned with the cost of household expenses, including over half (58%) of voters who said they were “very concerned” about their own health care costs – even as Harris was seen as the more trusted candidate on health care. Overall, President-elect Trump had a ten-point advantage over Vice President Harris on who voters trust to better handle the economy.

Abortion Ballot Initiatives

In the 2024 election, voters in 10 states were asked to cast ballots on abortion-related ballot measures. In all of the states, the ballot measures were aimed at protecting or expanding abortion access, while Nebraska’s ballot also included a competing measure curtailing abortion rights. Voters in seven states voted to expand abortion access, while the ballot measures to expand or protect abortion access failed in Florida, South Dakota, and Nebraska. To see a complete explanation of the abortion-related ballot measures and the outcome of the election, check out KFF’s dashboard.

About half of voters in each of the 10 states said the outcome of the abortion ballot initiative was “very important” to them. This includes majorities of voters who said they cast their ballot in support of the ballot measures in each of the 10 states. Voters who were opposed to the ballot measures were less likely than their counterparts to say the outcome of the ballot initiative on abortion was “very important” to them, except in Nebraska and South Dakota – two states where the ballot measure seeking to expand abortion access failed. In both these states, majorities of voters on both sides of the ballot measure said the outcome of the measure was “very important” to them – suggesting that both sides were equally motivated by the potential outcome of these ballot measures.

In Florida, the ballot measure failed to reach the 60% threshold needed to pass. About six in ten Florida voters who voted in favor of expanding abortion access said the outcome of the ballot measure was “very important” to them compared to nearly half of voters who voted against the ballot measure in the state who said the same, suggesting while enthusiasm for the outcome of the ballot measure was on the pro-access side, it wasn’t enough to overcome the high vote percentage threshold required by Florida law.

President-elect Trump won key electoral victories in four states where voters also chose to expand or protect abortion access. Across the ten states with abortion ballot measures, Trump garnered small but important shares of votes from those who voted in favor of ballot measures protecting abortion access, including support from about a third of those who voted in favor of abortion access in Missouri and at least three in ten voters in the battleground states of Nevada and Arizona.

Arizona and Nevada: Two Battleground States

Arizona and Nevada are two swing states that President-elect Trump won and a majority of voters passed ballot measures expanding abortion access. This is largely due to significant shares of Republican voters in each of the states voting in favor of expanding abortion access.

Arizona’s Proposition 139 (“Right to Abortion”) proposed enshrining the right to abortion in the state constitution, allowing abortion until fetal viability or at any stage in cases where the pregnant person’s health or life is at risk. The ballot measure will add an amendment to the Arizona state constitution which will provide protections similar to those in place at the federal level before Roe v. Wade was overturned. Arizona law currently bans abortions after 15 weeks. Majorities of voters across age groups and gender voted in support of Proposition 139, even as fewer men said the outcome of the measure was “very important” to them. Nearly eight in ten Black voters and three in four Hispanic voters in Arizona voted in support for expanding abortion access, as did nearly two in three White voters.

Yet, the proposition was viewed largely through a partisan lens. The vast majority of Democratic voters and those who voted for Kamala Harris in the state also voted in support of the proposition (95% and 94%, respectively). On the other hand, most Republicans in the state and those who voted for Donald Trump voted against the proposition, yet about four in ten in both groups voted in favor of the measure. Importantly, while about three-fourths of Democratic voters and Harris voters in the state said the outcome of the ballot measure was “very important” to them, less than half of independent voters, Republican voters, and Trump voters said the same.

Nevada’s ballot featured the Right to Abortion Initiative, Question 6, which sought to affirm a constitutional right to abortion up to fetal viability and after viability in cases where the pregnant person’s life or health is endangered. Similar to Arizona, majorities of voters across age groups, race and ethnicity, and gender voted in support of the measure – but with more variation. For example, a much larger majority of younger voters ages 18-29 in Nevada voted in support of the measure (80%) compared to older voters (63%), ages 65 and older. Younger voters were also twenty points more likely than their older counterparts to say the outcome of the initiative was “very important” to them. In addition, while two-thirds of men voted in support of the measure, just four in ten said the outcome of the initiative was “very important” to them. Less than half of white voters said the outcome of the initiative was “very important” to them, even as two-thirds voted in support.

The measure passed, receiving support from over nine in ten Nevada Democrats (94%) and those who voted for Harris (93%), as well as nearly half of Republicans (46%) and those who voted for Trump (46%). While nearly half of Republican voters and Trump voters supported the measure, just three in ten said the outcome of the ballot measure was “very important” to them.

Who Were the Pro-Trump and Pro-Abortion Voters?

In all 10 states with abortion-related ballot measures, a larger share of voters voted in favor of abortion access than voted for either presidential candidate. This is largely due to significant shares of Republicans and Democrats voting in favor of the ballot measures, suggesting that partisans may agree more on abortion policy than on the candidate they want to guide national legislation on abortion access. Throughout the campaign, Trump said that abortion laws should be left to the states and that he didn’t plan on signing a national abortion ban, while Harris, on the other hand, said she would sign a national law to restore the abortions rights set by Roe.

This analysis focuses on two key battleground states and finds the demographic profile of pro-abortion ballot measure voters who also voted for President-elect Trump looks very different than the Democratic voters who voted in favor of abortion access in terms of how motivated they were by the issue. Yet, Trump voters who voted in support of abortion access also differ from the other segment of Republican voters (those opposed to the ballot measure) in their views on abortion access legality.

Young men represent the largest segment of Trump voters who voted in support of abortion access in Arizona. More than a quarter (28%) of pro-abortion Trump voters were men between the ages of 18 and 49, while older women represent the largest segment of Harris voters who voted in support of abortion access (31%). Unsurprisingly, partisanship matters a lot. Republican men and Republican women constitute nearly all of pro-abortion Trump voters.

Trump voters who voted in favor of abortion access were much less motivated by the issue of abortion compared to Harris voters who supported the ballot initiative. While four in ten (43%) Harris voters who supported the abortion initiative said that abortion was the single most important factor to their vote, just one in seven (15%) pro-abortion Trump voters said the same. While large majorities of Harris supporters who voted for the ballot measure said the issue of abortion impacted whether they turned out to vote (81%) and who they voted for (76%), far fewer Trump supporters who voted for abortion access said the same.

When comparing Trump supporters who voted for and against the ballot measure, supporters of the Arizona abortion initiative tended to be younger (51% were under age 50 compared to 39% of anti-abortion Trump voters). About seven in ten (71%) Trump voters who supported the measure said abortion should be legal in all or most cases, while the large majority of Trump voters who voted against the measure said it should be illegal in all or most cases. Among both groups, few (about one in eight) said abortion was the single most important factor in their vote.

Some of the same patterns in Arizona were also present in Nevada, with pro-abortion Harris voters more likely to rate abortion as the single most important factor than pro-abortion Trump voters, and pro-abortion Trump voters being more likely than anti-abortion Trump voters to say they think abortion should be legal in at least most cases. In Nevada, there wasn’t as much of an age and gender difference between Harris supporters and Trump supporters who voted in favor of the ballot measure, with 18-49 year old men representing about a fifth of each voting group.

Voters in South Dakota, Florida, and Nebraska Rejected Constitutional Amendments Which Would Have Invalidated Current State Bans or Restrictions

For the first time since voters have been asked to vote on abortion access since the Dobbs decision, abortion-related ballot measures failed to pass in three states—Florida, Nebraska, and South Dakota. In each of these three states, the views and motivations of Republican voters proved to be important in determining the future of abortion access.

Florida

Florida’s Amendment 4, the “Florida Right to Abortion Initiative,” would have amended the state constitution to enshrine the right to abortion until the point of fetal viability or to protect the mother’s health. While a majority (57%) of the electorate voted in favor of the initiative, it failed to meet the 60% supermajority required to pass. Therefore, Florida’s current 6-week abortion ban will remain in effect in the state.

While the ballot measure failed to reach the 60% threshold, large majorities of Democratic voters (93%), Black voters (83%), and independent voters (72%) in the state voted in favor. About two-thirds of women voters (66%) and Hispanic voters (65%) also supported the measure, as well as six in ten White voters (60%) and male voters (61%). While most Republicans opposed the measure, around four in ten (42%) voted in favor.

Nebraska

Nebraska was the only state in this election cycle to have two competing abortion-related ballot measures. One, Initiative 434, would have established a fundamental right to abortion until fetal viability or when needed to protect the life or health of the pregnant person at any time during pregnancy, while Initiative 439, which passed, has amended the constitution to ban abortions past the first trimester, except in medical emergencies or when the pregnancy is a result of rape or incest. The state’s current 12 week ban will stay in effect, and the legislature cannot enact any protections beyond the first trimester – 14 weeks gestation.

Support for the two ballot measures was largely divided along partisan lines, with nine in ten (89%) Democrats supporting the “Right to Abortion Initiative” and about three-quarters (76%) of Republicans supporting the measure restricting abortion access. Among independent voters, a larger share supported the measure expanding abortion access (60%) than the one restricting abortion access (42%).

Over half (58%) of male voters in Nebraska voted in favor of the restrictive abortion initiative, while similar shares (57%) of women voters voted in favor of the initiative to expand abortion rights.

South Dakota

South Dakota voters rejected Amendment G, which would have amended the state constitution so that the government could only prohibit abortion after the end of the second trimester, except when necessary to preserve the life or health of the pregnant person.

Four in ten (41%) voters in South Dakota supported the measure, though there were pronounced partisan differences. Nine in ten (90%) Democrats, voted in favor of the measure, compared to about one in five Republican voters including a quarter (25%) of Republican men and one in five (19%) Republican women. A larger share of voters, including six in ten (59%) voters ages 45 and older, voted against the amendment rather than in support. Women, ages 18-44, were more divided with about half saying they voted “yes” (48%), and 52% saying they voted “no.”

Abortion as a Voting Issue

Abortion continued to be a motivating factor for a notable share of voters in 2024, especially a core constituent of the Democratic base – women. Overall, a quarter (25%) of voters said abortion was the “single most important” factor to their vote, similar to the share in 2022 who said the Supreme Court overturning Roe v. Wade was the most important factor (24%). In addition, about four in ten voters (43%) in 2024 said abortion had a major impact on their decision about whether to turn out, and over half (56%) said it had a major impact on which candidates they supported.

While the overall share of voters who said abortion had an impact on their vote is unchanged from the 2022 midterm elections, it ranked well behind two key factors for voters: the future of democracy in this country and the high prices for gas, groceries, and other goods. Abortion policy also ranked behind the future of free speech in this country and the situation at the U.S.-Mexico border. For Democratic voters, abortion policy ranked above all other issues other than the future of democracy, and Democrats were more than twice as likely as Republicans to say abortion policy was the “single most important factor” to their vote.

The impact of abortion policy on voters’ decisions stands out among certain groups of voters, namely groups of women voters. Three in ten women voters said abortion policy was the “single most important factor” in their vote, including 44% of Black women, 39% of Latina women, and one third of women voters between the ages of 18 and 44. Similar shares of college educated women and women without college degrees said abortion policy was the “single most important factor” in their vote.

In addition, majorities of several groups of women voters said abortion policy had a “major impact” on their decision to turn out and which candidates they supported. More than half of women ages 18 to 44, Black women, and Hispanic women said abortion policy had a major impact on their turnout in the election. Additionally, two thirds or more of Black women voters and Hispanic women voters said abortion policy had a major impact on which candidates they supported. Vice President Harris garnered majority support among Black and Hispanic women.

Vice President Harris Did Better Among Voters Who Prioritized Abortion

A large majority of voters (69%) who said abortion was the single most important factor to their vote supported Vice President Harris. The only other issue that one candidate had such a strong advantage on was among those who said the situation at the U.S.- Mexico border was their most important factor in their vote, a group that overwhelmingly voted for President-elect Trump. Other issues, such the future of democracy or high prices for gas, food, and groceries, were more mixed with an advantage for Harris on the former, and Trump on the latter. Voters whose most important issue when voting was the future of free speech in this country split between Harris (45%) and Trump (54%).

Health Care Costs and Other Issues

Voters’ economic anxieties were pervasive throughout the 2024 presidential campaign, and four in ten (39%) voters said “economy and jobs” was the most important issue facing the country. With this in mind, voters also said they were worried about being able to afford many household expenses, including the cost of health care. Two-thirds (67%) of voters said they were “very concerned” about the cost of food and groceries, followed by more than half who said the same about affording their own health care costs (54%). About half of voters said they were “very concerned” about being able to afford the cost of their housing (51%) or the cost of gas (48%).

Overall, President-elect Trump had a ten-point advantage over Vice President Harris on who voters trust to better handle the economy. Trump’s advantage on the economy was present among voters, regardless of age, but varied among other groups. For example, his advantage was larger among White voters and men voters. Hispanic voters were split on which candidate they trusted to do a better job handling the economy, while Black voters were much more likely to say they trusted Harris to do a better job. Women voters, on the other hand, were also split on which candidate they trusted on the economy.

Democratic voters predictably gave Harris a big advantage and Republican voters gave Trump the advantage, while independent voters also gave Trump the advantage. Fifteen percent of independent voters said they trusted neither candidate on the economy.

President-elect Trump garnered majority support among voters who were most concerned with the cost of household expenses, including over half (54%) of voters who said they were “very concerned” about their own health care costs – even as Harris was seen as the more trusted candidate on health care. Trump also garnered majority support among voters who were very concerned about the costs of gas (67%), food (61%), and housing (56%).

The FAQs below are intended to help you understand this Calculator. More detailed questions and answers about signing up for coverage are available on our Marketplace FAQ page.

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Does the calculator provide definitive results for what I will pay?

No. Although this comparison calculator is based on actual premiums for plans sold in your area, there are several reasons why your calculator results may not match your actual tax credit amount or premium payment. For example, the calculator relies completely on information as you enter it, whereas the Marketplace may calculate your Modified Adjusted Gross Income (MAGI) to be a different amount or may verify your income against previous year’s data. Additionally, some plans may include non-essential benefits, which would not be subsidized by premium tax credits.  To find out if you are eligible for financial assistance under current law and to sign up, you must contact HealthCare.gov, your state’s Health Insurance Marketplace, or Medicaid program office. Note that data under the baseline ACA subsidy column is hypothetical.

How do health insurance subsidies work?

Subsidies are financial assistance from the Federal government to help you pay for health coverage or care. The amount of assistance you get is determined by your income and family size. For more information of how health insurance subsidies are calculated, visit this page.

What is included in household income? How do I know what to enter for my income?

For information on how to calculate your household income, see here.

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Medicaid is a comprehensive, free health insurance program  for people with limited income.  This interactive takes into account whether your state has expanded Medicaid or not and will give you an estimate of whether your household income qualifies you and your family for Medicaid or the Children’s Health Insurance Program (CHIP), if applicable. Members of your family that are eligible for either Medicaid or CHIP are not eligible for subsidies in the Marketplace and would instead need to sign up for Medicaid or CHIP.

If I am eligible for Medicare, can I still sign up on the Marketplace?

No, you cannot sign up for new Marketplace coverage if you are eligible for Medicare.  Most people age 65 and older are eligible for Medicare, which is the health insurance program run by the federal government.  If you are eligible for Medicare, even if you do not choose to enroll in Medicare, you are not able to purchase Marketplace coverage.

When using the Health Insurance Marketplace Calculator, if some members of your household are eligible for Medicare and others are not, you should enter your full household size (including those who are eligible for Medicare) in Question #4. For the following question, please enter only those family members who are signing up for Marketplace coverage (do not enter adults who are eligible for Medicare in Question #5).

If you are over the age of 65 but not yet eligible for Medicare due to immigration status or your work history, you may be eligible for Marketplace coverage and subsidies. You can use the Health Insurance Marketplace Calculator by entering your age as 64.

What are my options if I have job-based health coverage?

In general, people who qualify for health insurance through their job are not able to get financial assistance through the Marketplaces.

However, if your employer’s coverage is either unaffordable or doesn’t meet the health care law’s “minimum value” requirement, then you may be eligible for financial help to purchase through the Marketplace. Family members (spouses and children) who are eligible for employer-sponsored coverage can still qualify for Marketplace premium tax credits if the employer-sponsored coverage is considered unaffordable. Starting in 2023, the so-called “family glitch” has been fixed to allow family members in these circumstances to enroll in subsidized coverage.

When using the Health Insurance Marketplace Calculator, you can answer “No” to Question #3 if your employer’s coverage is unaffordable or does not meet the minimum value requirement.

Following three consecutive years of record enrollment numbers, the upcoming 12^th annual Affordable Care Act (ACA) Marketplace open enrollment season presents another chance for many to obtain health coverage. Additionally, it provides an opportunity for current enrollees to modify their health plans. Below are ten essential points to understand about the 2025 open enrollment period.

1. Unsubsidized premiums are rising slightly, but most enrollees won’t shoulder the cost. Benchmark silver plan premiums, which are used for subsidy calculations, are projected to increase by 4% on average, while the lowest-cost bronze premiums are expected to rise by 5%. The steepest increases can be seen in Vermont, Alaska, and North Dakota, where unsubsidized monthly costs have surged by 10% or more. Conversely, premiums for low-cost plans are declining in 9 states, with significant reductions in Louisiana. (You can check state-specific data here.) A Peterson-KFF Health System Tracker analysis indicates that increasing hospital expenses and the greater use of GLP-1 medications are key drivers of higher premiums. On a national scale, a benchmark silver premium for a 40-year-old is estimated to be $497 monthly without subsidy assistance. However, the bulk of Marketplace shoppers (92%) qualify for subsidies, and with the enhanced subsidy options, many can secure plans with premiums under $10 per month. Since these subsidies cap monthly payments based on a percentage of an enrollee’s income, the vast majority will not face increased premium costs.
2. This may be the final year of enhanced subsidies. The enhanced subsidies established under the Inflation Reduction Act (IRA) are set to expire at the conclusion of 2025. Initially introduced in the American Rescue Plan, these subsidies enhanced premium support for existing enrollees and broadened eligibility for individuals earning above 400% of the poverty line. While these subsidies, which have significantly contributed to high enrollment numbers, will be available throughout 2025, they require Congressional action for any extension into 2026 and beyond. Without the enhanced subsidies, original ACA subsidies will persist, but net premium payments are anticipated to double or more in multiple states come 2026.
3. Marketplace shoppers will experience increased insurer options. On average, there will be 9.6 insurers participating in the ACA Marketplaces across states, the highest number recorded in any year to date (state data available here). In 2025, 97% of Healthcare.gov enrollees will have access to three or more ACA insurers, up from 78% in 2021. Several insurers, such as UnitedHealth Group, are venturing into new states in 2025, expanding into 4 new states and 119 additional counties across 13 of the 26 states where they currently participate. Centene (Ambetter) is also expanding its reach into 60 new counties across 10 states. With continual record-high sign-ups and strong financial performance from participating insurers, the ACA Marketplaces are becoming an increasingly appealing market compared to the low participation seen in 2018 (lowest point).
4. Open enrollment runs from November 1, 2024, to January 15, 2025, in most states. In line with new federal regulations promoting standardized open enrollment periods, the 2025 season will commence on November 1, 2024, throughout most states, with the exception of Idaho, which began its period on October 15. Open enrollment will conclude on January 15, 2025, in most states, apart from Idaho (December 16, 2024), Massachusetts (January 23), California, New Jersey, New York, Rhode Island, and DC (all January 31).
5. More states are shifting to State-Based Marketplaces. Georgia is set to transition to a State-Based Marketplace for the 2025 plan year, raising the total state-based marketplaces to 20. Illinois is scheduled to move to a state-based marketplace for the 2026 plan year and will cease using the federal platform in November 2025. Until then, residents of Illinois should continue utilizing Healthcare.gov.
6. The federal government is implementing new anti-fraud measures. The federal government has received numerous reports from consumers who have fallen victim to fraud, where insurance brokers signed them up or altered their plans without consent. To combat this issue, the federal government has undertaken enforcement actions against fraudulent brokers (including suspending certain brokers) and has applied Healthcare.gov standards to web brokers and direct enrollment entities in State-Based Marketplaces.
7. Modifications to short-term insurance plans are now in effect. The Biden Administration is reversing the Trump Administration’s expansion of short-term health insurance plans that do not comply with ACA standards and can discriminate against individuals with pre-existing conditions. The new regulations restrict short-term plans to a maximum of 4 months in total, and require that all online and written marketing materials have a consumer notice declaring that the coverage “is NOT comprehensive health coverage.” Although these short-term plans are not available on the ACA Marketplaces, many customers have reported feeling misled into thinking they were purchasing comprehensive insurance. A similar notice must also be included for fixed indemnity policies sold off Marketplace. These policies provide fixed payments in the event of illness or hospitalization, but, like short-term plans, they do not meet most ACA consumer protection standards. Written and online content must indicate that this fixed indemnity coverage “is NOT health insurance.” A recent lawsuit aims to challenge the new notice requirements for fixed indemnity plans, but for the time being, compliance is mandatory.
8. Special enrollment opportunities are undergoing changes. HealthCare.gov enrollees with incomes at or below 150% of the federal poverty line will continue to enjoy year-round special enrollment options, though this remains voluntary for state-based marketplaces. However, the “Medicaid Unwinding” special enrollment window will close on November 30, 2024. Additionally, starting in 2025, all consumers who select an ACA Marketplace plan during a special enrollment period (available in both federal and state-based marketplaces) will have their coverage effective from the first day of the month following their selection. Previously, in some state-based marketplaces, coverage initiation for plans selected after the month’s 15th day was delayed until the first day of the second month.
9. DACA recipients will be eligible for subsidized Marketplace coverage in 2025. A newly finalized rule by the Biden-Harris administration broadens eligibility for DACA recipients by redefining who is considered “lawfully present.” Starting November 1, 2024, DACA recipients will be able to enroll for coverage through either the Marketplace or the Basic Health Program. They will qualify for premium tax credits and cost-sharing reductions, even if their income is under 100% of FPL. A special enrollment period lasting 60 days will commence on November 1, 2024, allowing newly eligible DACA individuals to enroll. If they enroll in November 2024, their new Marketplace coverage could take effect as early as December 1, 2024. Despite ongoing litigation, DACA recipients remain eligible to enroll.
10. Network adequacy regulations must be met. Beginning in 2025, federal Marketplace plans will be obligated to comply with maximum appointment wait-time standards (e.g., no longer than a 10-business day wait for a behavioral health appointment, a maximum of 15 business days for routine primary care appointments, and 30 business days for non-urgent specialty care). Plans are expected to undergo a “secret shopper” survey from 2025 onwards to determine if in-network providers fulfill these appointment wait times for new patients seeking primary and behavioral health care.

On average, Americans allocate over $1,000 annually per person for prescription medications, significantly exceeding spending in other comparable countries. A 2023 KFF survey indicates that 30% of adults on prescription drugs have not adhered to their prescribed medication due to financial constraints. Additionally, a 2023 KFF consumer survey revealed that nearly one-quarter (23%) of insured adults have faced issues with their health insurance not covering a prescribed medication or imposing very high copays, a figure that rises to over one-third (35%) among those in fair or poor physical health. Individuals requiring specialty or brand-name medications for chronic conditions such as diabetes, cancer, arthritis, and HIV are particularly at risk for high costs, especially amidst increasing deductibles over the years. Moreover, insurance plans are more inclined to utilize coinsurance (a percentage of the medication cost after meeting the deductible) rather than copayments (a fixed dollar amount) for expensive specialty drugs, which can lead to higher out-of-pocket expenses for enrollees.

As biologics and specialty drugs have become more accessible, many individuals relying on these costly medications receive financial aid from drug manufacturers to mitigate out-of-pocket expenses. For those with private insurance, this support can be quite beneficial when applied toward deductibles and out-of-pocket expenses; however, an increasing number of plans have instituted “copay adjustment programs” that exclude these contributions from counting toward enrollees’ out-of-pocket limits. This issue brief summarizes copay adjustment programs, presenting arguments for and against their implementation, their commonality, and ongoing federal and state initiatives to tackle these issues.

Key Takeaways

• A number of drug manufacturers distribute copay coupons for their high-cost medications (often specialty drugs) to promote their usage and reduce consumers’ out-of-pocket expenses. In response to concerns over these coupons affecting their benefit structures and escalating costs, some health plans have modified the way these coupons apply to enrollees’ out-of-pocket responsibilities, potentially placing patients in a challenging position.
• Copay accumulators allow the value of the manufacturer’s copay coupon to apply with each prescription fill; however, this value does not contribute toward the enrollee’s deductible or out-of-pocket maximum. Once the coupon is depleted, the enrollee becomes liable for meeting their deductible before any copayment and/or coinsurance applies, which can be considerable for such medications.
• The 2024 KFF Employer Health Benefits Survey indicated that nearly one in five (17%) large employer-sponsored health plans have implemented a copay accumulator program in their primary plan, with this figure rising to one-third (34%) among firms with 5,000 or more workers. Further analysis revealed that two-thirds (66%) of individual Marketplace plans sold in states lacking prohibitions against copay accumulator programs have embraced these mechanisms in 2024.
• With copay maximizers, insurers aim to capitalize on the savings from manufacturer coupons. Plans may re-categorize specific high-cost specialty medications to exempt them from the Affordable Care Act’s limits on patient cost-sharing. Consequently, copay coupons do not contribute toward the enrollee’s deductible or out-of-pocket maximum, and cost-sharing requirements are calibrated to align with the maximum coupon value, spread evenly throughout the year. Enrollees who opt into this program typically do not face immediate out-of-pocket costs, but those who opt out may incur significant obligations that do not contribute to their out-of-pocket limits.
• While comprehensive data on the prevalence of copay maximizers remains scarce, one study shows their usage has surged in recent years, with approximately half of commercially insured individuals exposed to such programs.
• Although federal regulations have not yet thoroughly addressed the implementation of copay adjustment programs, relevant legislation has been proposed, and 21 states plus Washington, DC have taken steps to mitigate this issue within state-regulated health plans.

An Overview of Manufacturer Copay Coupons

Numerous prescription drug manufacturers have launched copay assistance initiatives in the form of copay cards and coupons designed to alleviate immediate out-of-pocket expenses (deductibles, copays, and coinsurance) for brand-name, often specialty, prescription medications for insured individuals. Some branded drugs with available coupons also have generic alternatives. The structure of these copay coupons differs by manufacturer and medication. Some coupons cover a specific number of prescription refills or are valid for the entire duration a patient is prescribed the medication. Others impose a maximum annual value or a monthly cap or a combination of both. Some manufacturer copay programs may require a minor monthly contribution (such as $10) from patients towards the drug cost. Additionally, copay coupons can be allocated to patient deductibles and coinsurance payments.

Eligibility for these programs may depend on whether the patient’s health insurance includes a copay adjustment program (as discussed in the following section). Copay assistance programs are distinct from patient assistance programs (PAPs), which typically provide financial support to those who are uninsured or underinsured but meet certain income criteria. They are also different from drug discount cards available to any consumer that can offer discounts on medications from pharmacies.

Copay assistance is accessible for the vast majority of brand-name drugs, and this percentage has increased over time. In 2023, it was estimated that copay assistance was utilized for 19% of prescriptions for privately insured patients (notably higher in some therapy areas), totaling approximately $23 billion in value. Nearly one-third of brand commercial prescriptions in the top 10 therapy categories made use of manufacturer copay assistance that year.

The federal anti-kickback statute prohibits the offering of copay coupons for beneficiaries of federal healthcare programs, including Medicare and Medicaid, as these coupons may incentivize beneficiaries to select more costly drugs over cheaper equivalents, potentially leading to increased federal expenditure. Manufacturers often implement safeguards to comply with this regulation, including printed notices on coupons and verifications during the claims process. However, a 2014 study by the Office of the Inspector General of the Department of Health and Human Services indicated that these safeguards may not stop all copay coupons from being used for Medicare Part D drugs, largely due to the lack of transparency in the pharmacy claims process related to coupon usage.

In contrast, federal regulations applicable to private insurance, such as the Affordable Care Act (ACA), do not specifically address copay coupons. However, the ACA does establish annual limits on out-of-pocket cost-sharing for essential health benefits (EHBs), including prescription drugs, for consumers with private health insurance (see callout box). Two states (MA (until 2026) and CA)) have banned the usage of copay coupons in their private insurance markets if a generic equivalent exists, subject to certain exceptions.

How Do Manufacturer Copay Coupons Operate?

To illustrate how manufacturer copay coupons function in real-world scenarios, consider this hypothetical example featuring a patient with cystic fibrosis who requires a brand-name specialty medication priced at $2,000/month, with and without the utilization of a copay coupon (Refer to Table 1). Assume the patient has the following:

• $2,000 deductible that remains unmet,
• 25% coinsurance (equivalent to $500),
• $5,000 out-of-pocket (OOP) maximum, and
• A $6,000/year manufacturer copay coupon applied.

Without a copay coupon: The patient covers the complete medication cost in January, fulfilling her deductible. The insurance plan begins to cover the medication in February, at which point the patient pays her coinsurance. By July, she hits her OOP maximum ($5,000), and from then on, the plan fully covers her cystic fibrosis medication (as well as all other in-network covered services and medications) for the rest of the plan year.

With a copay coupon: The copay coupon is deducted from her deductible and coinsurance each month. In this case, her $5,000 OOP maximum is reached in July, meaning that although the coupon was valued at $6,000, the manufacturer contributes $1,000 less. Her health plan will subsequently cover the medication in full for the remainder of the year, meaning the patient incurs $0 costs for this medication throughout the plan year. The health plan receives no advantage from the copay coupon.

In both scenarios, the patient achieves her deductible and OOP maximum within the same month. The total out-of-pocket expenses remain identical in both cases; however, without a coupon, those expenses are shifted from the patient to the drug manufacturer.