Nebraska Could See 54,000 Lose Coverage if ACA Tax Credits Expire

A recent health policy report highlights that approximately 54,000 Nebraskan residents could lose health insurance coverage if the current legislation, referred to by some as the major tax reform bill, is enacted along with the expiration of Affordable Care Act (ACA) expanded tax credits. The Congressional Budget Office (CBO) projects that combining the effects of the tax bill with the end of enhanced ACA tax credits may result in an additional 16 million uninsured individuals across the United States by 2034. In Nebraska specifically, the increase in the uninsured population is estimated at around 39,000 due to the tax bill alone, with 30,000 attributed to changes in Medicaid and 24,000 linked to ACA tax credit modifications.

This legislation recently passed the House narrowly and has faced partisan opposition, with the Senate proposing its variant. Public opinion varies significantly along party lines, with a majority of Republicans supporting the bill, contrasted by widespread disapproval among Democrats and independents. Nebraska's current uninsured rate for individuals under 65 stands at 7.5%, below the national average of 9.5%, underscoring a substantial potential impact on coverage within the state should these policy changes be implemented.

Medicaid, a vital government health program for low-income and disabled populations covering approximately 72 million Americans, experiences funding and administrative nuances between state and federal levels. Changes to Medicaid under the new legislation could affect eligibility and benefits, influencing insurance coverage trends in Nebraska and nationwide. States administer these programs and often contract with insurers to manage Medicaid services.

The ACA tax credits, which assist low- to moderate-income families in affording marketplace health insurance, were expanded under recent federal policy to include households earning above 400% of the federal poverty level and to increase subsidy amounts. The Inflation Reduction Act set these enhanced credits to expire at the end of 2025, potentially reversing gains in coverage achieved during the Biden administration.

Nationwide impact is concentrated in several large states, with half of the 16 million people projected to become uninsured residing in Florida, Texas, California, New York, and Georgia. Nebraska's situation exemplifies the broader challenges states may face regarding health insurance coverage, Medicaid funding, and market stability resulting from significant federal policy changes. The evolving legislative environment necessitates close monitoring by insurers, policymakers, and health care providers to anticipate and respond to coverage shifts and regulatory adjustments.