Here's what would happen if health care tax credits expired

At the center of a bitter federal government shutdown battle threatening to halt all but essential government business for an extended period are health care tax credits set to expire Dec. 31.

Democrats in both the House and Senate say their Republican colleagues refused to bargain in good faith, allowing health care subsidies to expire will leave millions without health insurance and increase costs for everyone.

Republicans counter there is no need to argue in September over something that will happen in December.

"The current funding bill is a simple short-term funding extension with no policy changes, and health care programs are fully funded at the current levels," according to a messaging document produced by Speaker of the House Mike Johnson, first reported by Fox News. "Democrats want to hold September government funding hostage over an unrelated December policy fight of their own making. Policy debates can happen separately and Democrats don't need to shut down the government to do it."

The enhanced tax credits themselves were enacted in 2021 as part of the Affordable Care Act. Policy analysts say the impact, should those tax credits expire, would be significant in Connecticut and beyond the state's borders.

"If the enhanced ACA tax credits are allowed to expire, the impact could be significant across the health care landscape," said Ben Wade, senior vice president at Stamford Health.

According to the Robert Wood Johnson Foundation, "hospitals, physicians and other providers would face more than $32.1 billion in lost revenue and a $7.7 billion spike in uncompensated care in 2026" if the tax credits expire.

Connecticut Hospital Association, citing Access Health CT data, estimates 30% to 35% of the 151,000 state residents using an Access Health CT health care plan -- about 52,000 people -- would lose coverage, and as many as 130,000 people would lose some financial help to pay for their health coverage.

Hospitals in Connecticut would see an immediate $22 million drop in revenue when the tax credits expire, according to the Johnson Foundation analysis. At the same time, as the number of people without health insurance would increase, the amount state hospitals spend in uncompensated care would increase by $5 million.

"Over time, as hospitals and providers give more uncompensated care, this dynamic can erode hospital revenue and destabilize local health care systems," Wade said.

While the immediate impact in Connecticut would be modest compared to other states, according to the Johnson Foundation analysis, CHA Senior Vice President Paul Kidwell said a knock-down effect would extend the impact.

"When people lose health insurance, they often delay or forgo care. They may skip doctor visits, postpone treatment or leave prescriptions unfilled, allowing manageable conditions such as high blood pressure, diabetes or infections to worsen. Without coverage, many may wait until their health deteriorates into an emergency, leaving hospital emergency departments as their only option for care," Kidwell said. "By then, illnesses are more advanced, requiring more intensive and more expensive treatment."

The end result "is a surge in uncompensated care costs, adding pressure to hospitals already facing chronic Medicaid underpayment and rising operating expenses," he added.

U.S. Sen. Richard Blumenthal, D-Conn., said residents with Access Health CT plans who don't lose coverage completely would still see an increase in health care costs.

"Without the subsidies, they will pay on average 75% more for health care," he said. "People will say, 'I don't need health insurance.' If they're healthy, they'll do without it because they'll say it isn't worth the additional cost. The sicker people, who are more vulnerable, potential patients, will enroll and it will cost more for that health insurance company to provide that health care, and consequently, premiums will rise for everyone."

Wade said an increase in the uninsured population is "troubling for many reasons."

"When people are uninsured, the biggest concern is that patients often delay care until it becomes urgent, which leads to worse health outcomes," he said. "This shift tends to reduce preventive and routine health spending while increasing the financial strain on emergency services and safety-net providers."

U.S. Rep. Rosa DeLauro, D-3rd District, said during a Tuesday news conference that "those who are fortunate enough to keep their health care, their costs will rise even more, and that's for families at all income levels."

"A family of four earning $129,800 a year could see their premiums rise by $18,170," she said. "A family of four earning $64,000 could see their premiums rise by over $2,500. A 60-year-old couple earning $82,800 a year would see their premiums rise by over $28,000."