A new report from the Commonwealth Fund and the George Washington University Milken Institute School of Public Health finds that if Congress allows enhanced premium tax credits to expire at the end of 2025, communities nationwide will experience significant economic repercussions.
The report projects that hundreds of thousands of jobs — many in the health care sector — would be lost, state economies would shrink by billions of dollars, and more than $2 billion in state and local tax revenue would disappear as people become uninsured and health insurers and health care providers lose revenue. All told, states would lose $26.1 billion in federal health insurance subsidies in 2026 alone, triggering widespread economic disruptions that would compound over time.
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“If Congress does not reauthorize the legislation that provides the more generous tax credits, this financial lifeline will no longer be available to consumers after December 31, 2025,” according to the report, titled The Cost of Eliminating the Enhanced Premium Tax Credits: Economic, Employment, and Tax Consequences. “There would be a sharp rise in the net cost of marketplace premiums, and many Americans would no longer be eligible for tax credits to defray the cost of their plan premiums.
The enhanced premium tax credits, which began in 2021 and were extended through 2025 by the Inflation Reduction Act, have made Affordable Care Act (ACA) health insurance marketplace plans more affordable for millions of Americans. Since their initial implementation in 2021 under the American Rescue Plan Act, enrollment in ACA plans has doubled to 24 million as of early 2025, according to The Commonwealth Fund. Without a tax credit extension, marketplace premiums will rise sharply, forcing many consumers to forgo coverage.
The Commonwealth Fund is a private, nonprofit foundation supporting independent research on health policy reform and a high-performance health system, and its new report projects the impact of expiring tax credits on state economies, employment, and tax revenue across all 50 states and the District of Columbia in 2026.
Key findings include the following:
• State economies would lose $34 billion in gross domestic product (GDP), while total economic activity would decline by $57 billion, leading to 286,000 job losses nationwide — nearly half of them in hospitals, doctors’ offices, and pharmacies.
• State and local tax revenue would decline by $2.1 billion, making it harder for states to fund essential services like education and infrastructure.
• The hardest hit states would be those that have not expanded Medicaid, where residents depend more on marketplace subsidies due to limited Medicaid coverage. These states (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming) would experience nearly 70% of the total job losses nationwide — shedding 194,000 jobs, $23 billion in GDP, and $1.3 billion in state and local tax revenue.
• Hospitals and health providers would face major revenue losses. Some providers likely would be forced to close or reduce services, leading to longer wait times, fewer available providers (especially in rural areas), and higher uncompensated care costs.
“Unless Congress extends the enhanced premium tax credits, four million more Americans will become uninsured, and many will likely experience difficulties accessing affordable health care,” the report concludes, noting that the organization’s estimates are conservative. “This analysis demonstrates the harm to state economies that will also result. The direct, indirect, and induced effects of ending the enhanced credits will create serious hardships for health care providers, other businesses, and the workers they employ. Moreover, the lower tax revenues that state and local governments receive will make it more difficult for them to balance their budgets.”
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