Millions of Americans could face significant increases in their healthcare premiums if Congress does not act to extend the Affordable Care Act (ACA) tax credits set to expire at the end of the year, according to Democratic lawmakers and some Republicans. With the open enrollment period for ACA marketplace plans beginning Nov. 1, time is running out to prevent what some predict could be a major financial burden for families across the country.
Tax Credits at Risk as Deadline Approaches
The enhanced subsidies, originally introduced as part of the American Rescue Plan in 2021 during the COVID-19 pandemic, were designed to make healthcare coverage more affordable for millions of Americans. These subsidies were extended in 2022 under the Inflation Reduction Act, but they are set to lapse at the end of the year unless Congress takes action. According to the nonpartisan health policy organization KFF, the expiration of these tax credits could result in a 75% average increase in premium costs for those enrolled with the subsidies.
The Congressional Budget Office (CBO) has also projected significant consequences if the credits are not renewed. A recent analysis estimates that more than 4 million Americans could lose their health insurance by 2034 as a result of the lapse. Currently, 24 million Americans are enrolled in ACA marketplace plans, with over 90% of them – approximately 22 million people – receiving premium tax credits, according to the Centers for Medicare and Medicaid Services.
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Democrats Push for Urgent Action
Democrats are urging Congress to extend the tax credits as part of critical legislation required to keep the government funded past the end of the month. Without a funding measure in place, the government risks shutting down on Oct. 1. Senate Minority Leader Chuck Schumer emphasized the stakes during a press conference, stating, "So ACA tax credits must be expanded, we believe that firmly and strongly. Not just to save Americans the thousands more each year that they’d have to pay, but for the very lives that are at stake if this expires."
Sen. Jeanne Shaheen of New Hampshire also criticized recent Republican-led legislation for failing to address the expiration of the credits. She pointed to the signature tax reform bill passed earlier this year and its anticipated impact on healthcare coverage. "That’s why it’s so important to extend these tax credits, to give families more breathing room, because what we saw in that big bill was that we kicked millions of Americans off of Medicaid, we failed to extend those enhanced premium tax credits that so many families rely on in order to be able to afford health insurance", Shaheen said.
A coalition of 18 Democratic governors has also joined the push, sending a letter to congressional leaders urging swift action to extend the credits.
Republican Resistance and Bipartisan Efforts
Republicans, who control both chambers of Congress, have historically opposed the ACA and did not support either the American Rescue Plan or the Inflation Reduction Act. House Speaker Mike Johnson dismissed the idea of tying the tax credits to the government funding measure, calling the two issues "unrelated." "That is a December policy issue, not a September funding issue", he said in a press conference, though he expressed broader concerns about continuing the subsidies.
Despite this, some Republicans, particularly those in competitive districts, have joined a bipartisan effort to extend the credits for one year. Rep. Jen Kiggans, a Republican from Virginia, co-leads the effort and stressed the importance of providing relief for families. "We can’t pull the rug out from under hardworking families – we must give Americans more time to plan", Kiggans said in a press release.
However, Democrats argue that a one-year extension does not go far enough to address the potential financial strain and long-term implications of the subsidies’ expiration.
A Looming Crisis
As the deadline to prevent a government shutdown looms, the future of the ACA tax credits hangs in the balance. For millions of Americans relying on these subsidies to keep their healthcare costs manageable, the stakes could not be higher. The coming weeks will determine whether Congress can bridge its partisan divide to address the issue or whether families will face the financial fallout of inaction.
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