Navigating the Fallout: How ACA Subsidy Expiration Threatens Behavioral Health Stability

When the Affordable Care Act (ACA) was first introduced, it fundamentally reshaped how millions of Americans accessed and paid for healthcare. By expanding the availability of premium tax credits and cost-sharing subsidies, the ACA not only made coverage attainable for lower- and middle-income individuals, it redefined how behavioral health services could be delivered with consistency and dignity. Now, as Congress debates the future of these subsidies, the stakes could not be higher. If the enhanced premium tax credits, originally expanded under the American Rescue Plan Act of 2021 and extended through 2025, are allowed to expire, millions of Americans could face premium increases that effectively price them out of coverage. According to a recent Kaiser Family Foundation (KFF) analysis, premiums would more than double on average in 2026 for those currently benefiting from these subsidies. This moment calls for a clear-eyed view of what this means for behavioral health access, for community stability, and for the small businesses that quietly depend on the ACA marketplace to support their workforce.

A System Built on Access—Now at Risk

In 2025, an estimated 24.3 million people were enrolled in ACA Marketplace plans, and 92% of them, roughly 22.4 million individuals, received some form of subsidy to make that coverage affordable. That’s not a marginal statistic. It represents the backbone of health coverage for working-class and middle-income Americans including teachers, service industry staff, social workers, entrepreneurs, and caregivers, many of whom are managing behavioral health needs in the context of complex social and economic pressures. The enhanced subsidies introduced in 2021 helped drive record enrollment, more than doubling the number of Marketplace participants since 2021. This expansion reflected not just policy success but human need. Inflation, housing instability, and stagnant wage growth have left many Americans depending on the ACA Marketplace as the only realistic pathway to maintain access to healthcare coverage, especially behavioral healthcare coverage.

Who Stands to Lose the Most

The individuals most vulnerable to subsidy elimination fall into two distinct groups: young adults (ages 19–34) and older adults (ages 50–65) nearing retirement but not yet eligible for Medicare. For young adults, ACA subsidies often make the difference between staying insured or joining the ranks of the uninsured, a decision that directly affects their ability to access behavioral health services during some of the most formative years of adulthood. For older adults, particularly those navigating chronic health conditions or early signs of depression and anxiety associated with workforce transitions or caregiving responsibilities, the end of these subsidies could make comprehensive health coverage financially impossible. Each of these groups engages with the Marketplace for different reasons, but they share a common vulnerability: behavioral health challenges are often among the first casualties when affordability falters.

Behavioral Health by the Numbers

Among ACA Marketplace enrollees, 18.2% had a healthcare claim associated with a mental health diagnosis in 2022, a figure estimated to reach 4.4 million individuals by 2025. These are not abstract percentages as they represent millions of people receiving counseling, medication-assisted treatment, and preventive services that keep communities functioning and families stable. Without subsidies, these individuals would face premium increases so steep that coverage gaps and care interruptions would become inevitable. The downstream effects are well documented including higher rates of suicide, recovery disruption, emergency department utilization, and incarceration among those with untreated behavioral health conditions. The ACA established a series of critical provisions that dramatically improved access to behavioral health care and recovery services:

• Subsidized plans cover SUD and mental health services: All Marketplace plans must include behavioral health and substance use treatment among the 10 Essential Health Benefits.

• Guaranteed coverage for pre-existing conditions: Insurers cannot deny coverage or impose higher premiums based on a history of mental illness or addiction.

• Increased financial assistance: Over 87% of enrollees receive financial support that reduces monthly costs and out-of-pocket expenses.

• Parity protections: The ACA, in concert with the Mental Health Parity and Addiction Equity Act (MHPAEA), prohibits insurers from imposing stricter limits on behavioral health services than on medical or surgical care.

  
  

The Small Business Connection

The conversation about ACA subsidies often focuses on individuals, but small businesses form the quiet heart of this issue. Approximately half of the adults leveraging ACA subsidies are self-employed or work for small businesses, representing about 10 million Americans who depend on the individual market because their employers cannot afford to offer coverage. Consider this:

• Roughly 60% of all American businesses have fewer than five employees.

• Businesses with fewer than 50 employees, which are not required to offer insurance under the ACA, play a vital role in job creation, community stability, and local economic vitality.

For these business owners and employees, losing subsidy support is not simply an individual hardship; it’s a systemic shock. It could lead to higher uninsured rates, reduced productivity due to untreated behavioral health conditions, and greater financial strain on safety net providers. When small businesses suffer coverage losses, communities feel it in fewer healthy workers, diminished economic output, and increased strain on local health systems.

A Perfect Storm for Behavioral Health Providers

Behavioral health organizations many of which already operate with tight margins will inevitably feel the impact of subsidy elimination. If millions lose coverage, providers could face reduced reimbursement revenue, increased uncompensated care, and growing administrative complexity as they attempt to bridge gaps for uninsured patients. This scenario underscores an urgent truth: behavioral health systems must proactively prepare for financial turbulence.

Five Actions Behavioral Health Organizations Can Take Now

1. Diversify Payer Mix and Contract Models – Expand beyond traditional fee-for-service structures by developing value-based partnerships with MCOs, ACOs, and self-insured employers. Explore bundled payment models for integrated care episodes that include behavioral health, primary care, and social supports.

2. Strengthen Data and Outcomes Infrastructure – Use claims analytics and performance dashboards to identify trends in payer mix, uninsured visits, and cost-of-care metrics. Quantify the impact of subsidy loss on patient engagement and outcomes data that can drive advocacy and partnership discussions.

3. Develop Hybrid Payment or Membership Options – Pilot sliding-scale or subscription-based access models for behavioral health services to ensure continuity for patients who may lose coverage. Integrate telehealth and group services to maintain affordability while sustaining care reach.

4. Leverage Public and Philanthropic Funding Streams – Position your organization to capture opioid settlement funds, state block grants, and foundation dollars aimed at behavioral health infrastructure. Collaborate with local coalitions to braid funding across clinical, social, and workforce development programs.

5. Engage in Policy and Advocacy – Partner with industry groups, chambers of commerce, and professional associations to elevate the behavioral health implications of subsidy expiration. Tell data-informed stories that connect the dots between affordability, coverage continuity, and community well-being.

   
   

Navigating What Comes Next

If the enhanced ACA subsidies expire, the reverberations will be felt across every level of the behavioral health ecosystem from individual clients struggling to afford care, to small businesses losing valued employees, to community providers absorbing the cost of untreated illness. The behavioral health community cannot afford to be a passive observer in this debate. We must quantify, communicate, and collaborate, translating lived experience, data, and innovation into clear calls for continuity and reform.

At NorthStar Behavioral Health Advisory, I believe that navigating complex social systems requires both a mission-oriented compass and a practical roadmap. The loss of ACA subsidies would represent more than a financial disruption. It would signal a retreat from the progress made toward parity, prevention, and community health integration. Our role—as advisors, clinicians, policymakers, and advocates is to ensure that doesn’t happen.

If you’re interested in connecting with me to discuss how I can be of assistance to your organization, please reach out to me directly eric@northstarbhadvisory.com 

NorthStar Behavioral Health Advisory

Navigating complex social systems so that all communities may thrive.

www.northstarbhadvisory.com