Medicaid Expansion and Premium Tax Credits Critical to U.S. Insurance Coverage Gains

Recent years have seen significant progress in reducing the number of uninsured Americans, with the uninsured rate now at 8%, a marked improvement from prior levels. This progress has largely been driven by the expansion of Medicaid and the availability of premium tax credits through federal and state insurance marketplaces.

Since 2013, Medicaid expansion has increased coverage by over 13 million people and now covers more than 70 million Americans, significantly reducing the uninsured rate among non-elderly adults and improving health outcomes.

Federal and state marketplaces, enhanced by premium tax credits implemented in 2021 and extended through 2025, have also contributed to record enrollment numbers, providing affordable options for millions. These programs together offer critical coverage continuity for individuals experiencing life changes such as employment transitions.

However, proposed federal policy changes threaten this progress. The expiration of enhanced premium tax credits after 2025 could lead to significant increases in premiums, causing millions to lose marketplace coverage and raising the uninsured rate by an estimated 2.2 million in 2026 and up to 3.7 million by 2027. Simultaneously, potential reductions in Medicaid funding and eligibility could cause further coverage losses.

These changes would result in increased uncompensated care costs for healthcare providers, estimated to rise by billions of dollars, primarily absorbed by hospitals. This financial strain risks reducing healthcare services, increasing prices, and threatening hospital closures, which would further impact state and local economies and healthcare employment.

States that have not expanded Medicaid would face the greatest economic and coverage impacts. Overall, policy decisions on Medicaid funding and premium tax credits will have profound effects on healthcare affordability, coverage, health outcomes, and economic stability, underscoring the importance of maintaining current coverage provisions for vulnerable populations and healthcare system sustainability.