KFF Survey Highlights Risks of Expiring ACA Marketplace Tax Credits

The New Democrat Coalition Health Care Working Group has introduced a Health Care Action plan aimed at reducing health care costs, expanding access to care, and safeguarding existing health care programs. A recent KFF poll indicates that 25% of Americans insured through the Affordable Care Act (ACA) Marketplace might become uninsured if the enhanced tax credits expire. Currently, 22 million people benefit from these tax credits, which are scheduled to end this year, potentially causing average premium increases of 114%. Many ACA Marketplace enrollees already find it challenging to afford premiums and related health care expenses, with some prioritizing these costs over essentials like rent and food. Nearly 60% of enrollees report that a $300 annual increase in premiums would substantially strain household finances, while 20% could not handle a $1,000 increase. The risk of premium hikes prompts respondents to consider measures like reducing daily expenses, seeking additional work, or increasing debt. The enhanced tax credits originated with the American Rescue Plan Act of 2021, providing expanded and increased assistance to ACA Marketplace enrollees. These credits were subsequently extended by the 2022 Inflation Reduction Act. However, their impending expiration has fueled political tension, contributing to the longest government shutdown in U.S. history. Senate Democrats plan to push for a vote on extending the tax credits on December 11. Public opinion largely supports the extension, with 84% of enrollees across political affiliations backing continuation. The poll also reveals that ACA enrollees tend to hold Congressional Republicans and former President Trump more responsible for potential cost increases than Democrats. Overall, the expiration of enhanced tax credits poses substantial risks to ACA Marketplace affordability and coverage levels, with expected market-wide premium surges and increased financial strain on enrollees. This scenario underscores critical regulatory and policy considerations for federal health care programs and insurance markets in the upcoming legislative agenda, influencing payer and provider environments significantly.