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The timeframe for extending premium tax credits under the Affordable Care Act is getting squeezed on both ends. The year-end expiration date is drawing closer, and Congress appears to be in no hurry to discuss an extension during the ongoing government shutdown.
If the credits are not extended, about four million additional Americans will uninsured by 2034, the Congressional Budget Office estimates. However, extending the credits would increase the federal debt by $350 billion during the same period.
The credits have helped millions of lower- and middle-income Americans access affordable health care coverage that they otherwise would not have been able to obtain, according to a new analysis by the Washington Post. The typical ACA policyholder is an adult in his or her mid-40s with an income between 100% and 200% of the federal poverty line, or about $21,000 to $42,000 for a family of two, it noted.
Among other findings from the analysis:
- If the credit expires, ACA marketplace customers at or near the poverty line would see their premiums jump from $0 to 4% of their income for a silver-level plan. A 50-year-old couple in Dallas that earns 150% of the federal poverty level ($32,000 in 2025) would see their premiums increase to about $1,300 in 2026.
- Those with slightly higher incomes pay for part of their premiums already, but the amount would increase dramatically if the enhanced credits expire. For people who earn 250% of the federal poverty level ($53,000 for a couple in 2025), costs would go from about 4% to 8% of their income.
- Increases would be most extreme for the more than one million Marketplace customers earning more than 400% of the poverty level (about $84,000 for a family of two). About a million people would go from paying 8% of their income for health insurance premiums to becoming responsible for the entire cost themselves. This would be especially painful because health insurance premiums are expected to increase by 18% in 2026.
- Those who remain in the individual market will have to either pay higher costs or switch to a lower level of coverage. These increasing costs probably would come as a surprise to many people who benefit from the enhanced tax credit.
ACA subsidies were enhanced under the Biden administration during the COVID-19 pandemic in an attempt to make health care more widely available. Democrats voted to extend those subsidies through 2025 as part of the 2022 Inflation Reduction Act.
Democrats now are pushing to extend the subsidies, using the ongoing government shutdown as leverage to force Republicans to deal with the issue. Both House and Senate GOP leaders have signaled they are willing to discuss the expiring health care subsidies but rejected pairing them with their bill to fund the government.
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