Four Million Americans Could Lose Health Coverage Once ACA Credits Expire

Key Takeaways

Tax credits that have significantly slashed out-of-pocket health costs for millions of Americans are set to expire next yearIf Congress doesn't extend them, many will be unable to afford healthcare, a new study warnsThe impact would be especially potent in states that have not widened eligibility for Medicaid coverage

WEDNESDAY, Nov. 20, 2024 (HealthDay News) -- If Congress lets healthcare tax credits established during the pandemic expire, 4 million Americans will become uninsured, a new analysis warns.

The tax credits, which have significantly lowered out-of-pocket costs for millions of Americans, are set to expire at the end of 2025.

"Allowing these credits to expire will force families to choose between healthcare and other necessities like housing and food," said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation (RWJF). It supported the analysis and an interactive data simulation, which were conducted by a team at the Urban Institute, a public policy think tank.

"The implications will be profound, with the ripple effects being felt across the entire U.S. economy," she added in a RWJF news release.

Congress introduced the tax credits in 2021 to help Americans maintain health insurance overage during the pandemic. Congress renewed them a year later.

The Urban Institute's new analysis examines how insurance coverage rates would be affected in all 50 states and the impact on people of various races, ethnicities, ages and income levels.

"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 state or by race, income and age," said Jessica Banthin, a 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," she added.

Of the estimated 4 million people who would no longer be able to afford health coverage, nearly 2.5 million live in states that have not expanded Medicaid eligibility under the Affordable Care Act (ACA), also known as Obamacare.

Southern states would be hard hit. Mississippi is projected to have the largest increase in uninsured residents -- 112,000 people in all -- followed by Alabama, Louisiana, Georgia, Tennessee and South Carolina. The percentage of uninsured people would rise in those states by more than 30%, according to the analysis.

At the same time, enrollment in subsidized plans offered through the ACA Marketplace is projected to fall by 7.2 million Americans. Of those, 4.5 million live in states that have not expanded Medicaid eligibility, according to the study.

Subsidized Marketplace coverage is projected to drop by more than 60% in Louisiana, Kentucky and Texas alone.

The report warns that 1.1 million Black Americans stand to lose subsidized health coverage through the ACA -- mostly in non-expansion states. A similar number of Hispanic people -- 1.3 million -- would be affected the same way.

More than half of the 4.3 million white Americans who stand to lose subsidized ACA coverage also live in non-expansion states.

More information

Find state-by-state information on health care coverage at HealthCare.gov.

SOURCE: Robert Wood Johnson Foundation, news release, Nov. 18, 2024

What This Means For You

Finding affordable health insurance could be more difficult if Congress does not extend tax credits introduced during the pandemic.