End to ACA tax credits could leave 3 million uninsured
But extending the enhanced credits would increase the federal deficit by $305 billion over 10 years.
More than three million people could lose insurance coverage if enhanced premium tax credits included in the American Rescue Plan expire at the end of this year, according to a new report from the Urban Institute. The American Rescue Plan Act of 2021 increased credits for Marketplace insurance coverage and extended eligibility to more individuals.
“If Congress does not extend these benefits, marketplace enrollment will most likely fall and the number of people uninsured will increase,” said Jessica Banthin, senior fellow at the organization. “Our findings show that 4.9 million fewer people will be enrolled in subsidized Marketplace coverage in 2023 if the enhanced credits aren’t extended. This comes at a pivotal time when millions of people will be losing Medicaid as the public health emergency expires.”
Related: 4 FAQs for employers about ACA compliance
The report states that if Congress wishes to extend the PTCs, it would need to act soon to allow insurers time to adjust their plans accordingly. If the credit is not extended and consumers opt not to re-enroll in a health plan, it could adjust the risk pools and drive premiums higher, resulting in a further decrease in signups.
Congress would need to act by midsummer to give marketplaces, insurers and outreach programs time to prepare for the 2023 open enrollment period, which begins in November.
Among other findings from the study:
- Non-Hispanic Black individuals, young adults and people with incomes between 138% and 400% of the federal poverty line would experience the largest coverage losses.
- Individuals and families enrolled in the Marketplaces or other nongroup coverage will pay hundreds of dollars more per person each year in premiums if the credits expire.
- People currently eligible for credits with incomes between 150% and 400% of the federal poverty level would pay more than $1,000 more per person for a silver plan.
- People with incomes above 400% of the federal poverty level who lose eligibility would pay roughly $2,000 more per year.
- Extending the enhanced credits would increase the federal deficit by $305 billion over 10 years unless legislation extending them includes raising revenue.
“The combined effect of ending both the premium tax credits and the public health emergency could lead to a tsunami of coverage loss,” said Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, which sponsored the study. “A reversal of progress in boosting the coverage rate to record levels seems inevitable if Congress does not act.”
Read more: