Impact of Expiring ACA Enhanced Premium Tax Credits on Marketplace Costs

The Affordable Care Act (ACA) includes premium tax credits to reduce health insurance costs, with an income eligibility cap set at 400% of the federal poverty level. Temporarily expanded under the American Rescue Plan Act (ARPA) and Inflation Reduction Act (IRA), these enhanced credits extended benefits beyond this threshold and increased support for lower incomes. These enhancements are set to expire this year, which will significantly increase premium costs for enrollees receiving these tax credits, with average premium increases of 114%. Premium payments are capped based on income, so increases for those under 400% of poverty will be relatively uniform, rising by hundreds to over $1,500 annually per person. However, for enrollees above 400% of poverty losing tax credit eligibility, particularly older adults and those in high-cost regions, premium increases will be substantial, sometimes doubling or tripling annual payments. The report highlights stark regional disparities, with some states like Wyoming and West Virginia facing up to $22,000 hikes for older enrollees, while others like New York and Massachusetts experience more modest increases. The analysis emphasizes that premium cost impacts will differ by age and income, with older enrollees most affected by the expiration of enhanced credits. This report provides a detailed geographic and income-level breakdown of expected premium payment increases, relevant for insurers and policymakers assessing market stability and affordability post-expiration.