Enhanced tax credits decreased number of uninsured Blacks and Hispanics

Enhanced premium tax credits will drive significant gains in health insurance coverage among Black and Hispanic people next year relative to a scenario without enhanced PTCs, according to a new analysis prepared by the Urban Institute with support from the Robert Wood Johnson Foundation.

Participation in nongroup insurance, which includes the Affordable Care Act’s (ACA) individual insurance market, will be 79% higher among Black enrollees and 61% higher among Hispanics than it would have been without the enhanced credits, with the largest coverage gains occurring in states that have not expanded Medicaid. Researchers say enrollment among Black and Hispanic individuals more than doubles in non-expansion states because of enhanced PTCs.

The enhanced tax credits were put in place by Congress during the COVID-19 pandemic to help people maintain affordable health coverage. They are set to expire at the end of 2025. Previous research from Urban Institute researchers found that the enhanced PTCs reduce the overall number of uninsured people in the United States by 4 million next year.

Research simulations from this new analysis show:

• Nationwide, the uninsured rate for Black individuals is projected to be 9.7% in 2025 with enhanced PTCs in effect. The uninsured rate would be 11.9% without enhanced PTCs.
• For Hispanic individuals, the uninsured rate is projected to be 17.9% with enhanced PTCs. It would be 19.8% without the credits.
• For White people, the uninsured rate is projected to be 5.7% with enhanced PTCs and would be 6.8% without.
• Enhanced PTCs dramatically raise coverage rates in the 10 states that have not expanded Medicaid under the ACA.
• In those 10 states, uninsurance among Black people will be 11.7% in 2025 with enhanced PTCs but would be 15.9% without.
• Among Hispanic people, uninsurance will be 24.2% with enhanced PTCs and would be 28.4% without.
• Uninsurance rates among White people are projected to be 7.2% with enhanced PTCs and would be 9.8% without.

“There are likely to be continued large disparities in the rates of uninsured people by race and ethnicity in 2025. However, the enhanced premium tax credits will play a meaningful role in reducing these disparities,” said Jessica Banthin, senior fellow at the Urban Institute. “Our research has shown that the enhanced premium tax credits have secured coverage for millions, but if Congress does not extend the credits after 2025, these gains will be reversed, millions of people will lose their coverage, and racial disparities in health insurance coverage will grow.”

“By increasing the credits available to buy insurance in the marketplace, the enhanced premium tax credits not only make coverage more affordable for all eligible people, they also reduce disparities in coverage for Black and Hispanic individuals,” said Gina Hijjawi, senior program officer at the Robert Wood Johnson Foundation. “We must prioritize policies like the PTCs that make health insurance more affordable for everyone in America and create a more equitable healthcare system.”

Read “The Impact of Enhanced Premium Tax Credits on Coverage by Race and Ethnicity” here.