More than 70 organizations, led by Families USA, sent a letter to Congress on Monday calling on them to extend the enhanced premium tax credits that are set to expire at the end of 2025. The enhanced premium tax credits, introduced in 2021, reduced health insurance premiums for millions of individuals purchasing coverage through the marketplace.
Families USA is an advocacy organization for healthcare consumers. The letter also includes child advocates, labor groups, equity organizations, patients, providers, disability rights groups and aging organizations.
The premium tax credit is a refundable credit that lowers the out-of-pocket cost of health insurance premiums for those who receive insurance via the marketplaces. Originally available to individuals with incomes between 100% and 400% of the federal poverty level, the American Rescue Plan Act (ARPA) expanded eligibility to those with incomes above 400% of the federal poverty level and lowered the maximum household contribution.
If the enhanced premium tax credits expire at the end of 2025, older and rural households will be especially impacted, according to the letter. The organizations noted that one in five small business owners and self-employed workers rely on the marketplaces for coverage. In addition, premiums would double for many people and millions would completely lose coverage.
“Congress needs to take action as soon as possible, because while the credits are not set to expire in federal statute until December 31, 2025, Americans will feel the impacts far sooner,” the letter stated. “Health insurers will begin setting next year’s rates as early as this spring, new rates will be announced by summer, and by fall people in every Congressional district will experience premium shock when they shop for 2026 plans.”
The letter also cited a new survey that found 86% of 2024 voters want the tax credits extended, and the organizations argued that it’s now Congress’ responsibility to “demonstrate that they are listening to that call from their constituents.”
The organizations also gave specific examples of people who would be affected by the enhanced premium tax credits expiring.
“People in every community are at risk,” they said. “This includes people like Dean, a 34-year-old self-employed designer, who used his tax credit to afford a plan with a lower deductible and out-of-pocket maximum – which proved crucial to him when he was diagnosed with cancer that would have otherwise subjected him to financial ruin. Jenny, a 64-year-old woman who used her tax credit to buy a plan for $500 per month that helped cover her million dollar hospital bill and treatment after she experienced a stroke. Without that coverage – facilitated by the tax credit – she and her husband would have lost their home and life savings to pay for care.”
The letter comes after the Congressional Budget Office released a report last week on the enhanced premium tax credits. It found that if there isn’t an extension through 2026, the number of people without insurance will increase by 2.2 million in that year and gross benchmark premiums will increase by 4.3% on average.
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