4M will lose coverage if Congress allows enhanced ACA credits to expire

Four million people will become uninsured if Congress allows the expiration of tax credits that have significantly reduced millions of people’s out-of-pocket healthcare expenses, according to a new analysis and interactive data simulation released by researchers at the Urban Institute with support from the Robert Wood Johnson Foundation.

Enhanced premium tax credits were initially established by Congress in 2021 to help people maintain their health coverage amid the COVID-19 pandemic. Congress renewed the credits in 2022 and they are set to expire at the end of 2025. The interactive data simulation shows how the expiration will affect insurance coverage rates in all 50 states, as well as how it will impact people of various income groups, ages, races, and ethnicities.

Key findings include:

• Four million people will become uninsured as a result of no longer being able to afford their current health coverage.
• Nearly 2.5 million of these people live in states that have not expanded Medicaid under the Affordable Care Act (ACA)—something researchers say will make transitions to new coverage more difficult.
• Mississippi will experience the largest increase in the number of uninsured residents (112,000 people).
• Alabama, Georgia, Louisiana, South Carolina, and Tennessee will each see more than a 30% increase in the number of uninsured.
• Subsidized ACA Marketplace enrollment will decline by 7.2 million people—4.5 million of whom live in states that have not expanded Medicaid eligibility.
• In Louisiana, Kentucky, and Texas, subsidized Marketplace coverage will decline by more than 60%.
• Black and Hispanic people will see disproportionate reductions in health insurance coverage.
• Without the tax credits, 1.1 million Black people will lose subsidized health coverage through the ACA, about 75% of whom live in non-expansion states.
• 3 million Hispanic people will lose subsidized coverage, about 75% of whom live in non-expansion states.
• Over half of the 4.3 million White people who will lose subsidized ACA coverage plans live in non-expansion states.

“If the enhanced premium tax credits expire, there will be dramatic declines in Marketplace coverage and increases in uninsurance, but the effects will not be felt equally across states or by race, income, and age,” said Jessica Banthin, senior fellow at the Urban Institute. “Our analysis shows that their expiration could mean some communities may experience greater coverage losses, making healthcare unaffordable and inaccessible.”

“Millions of individuals and families across the United States rely on these tax credits to access high-quality, affordable healthcare,” said Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation. “Allowing these credits to expire will force families to choose between healthcare and other necessities like housing and food. The implications will be profound, with the ripple effects being felt across the entire U.S. economy.”

Read the full analysis, “Who Would Lose Coverage if Enhanced Premium Tax Credits Expire?” here.