Inflation Reduction Act extends health insurance subsidy through 2025

Enhanced tax credits that helped thousands of people afford health insurance during the COVID-19 pandemic will continue until 2025 under the Inflation Reduction Act, which on Friday received final approval from Congress.

Premium tax credits for people who buy health insurance through healthcare.gov or state-based marketplaces — such as Pennie.com and GetCoveredNJ — were expanded during the pandemic to make health insurance more accessible for people who'd lost jobs or experienced a dip in income. The credits were set to expire in 2023, which would have exposed people to steep, unexpected premium increases next year.

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Previously, tax credits were available to people with income within 400% of federal poverty, about $51,500 for an individual in 2022, to help offset the cost of premiums for health insurance plans bought through the federal and state-based marketplaces.

Out of concern that unemployment and reduced wages during the pandemic would lead to a spike in the uninsured rate, lawmakers in 2021 increased the size of the tax credits and removed the income cap that limited who was eligible.

Individuals would have paid an average of 53% more — an extra $700 a year — for their insurance premium in 2022 without the expanded tax credits, according to a new analysis by the Kaiser Family Foundation.

Between 2021 and 2022, Pennsylvania saw a 11% increase in people who signed up for a health plan through Pennie.com. In New Jersey, the number of people enrolled in a marketplace plan rose 20%, as more people found coverage that was affordable. Both Pennsylvania and New Jersey extended special enrollment periods to allow people who'd lost coverage during the pandemic to sign up.

For people looking to keep their marketplace coverage in 2023, continuing enhanced tax credits will lessen the blow of anticipated premium increases, according to the KFF report.

Premiums are expected to rise 5-14% next year due to inflation and a rebound in people using their health plan, after a dormant period during the pandemic, according to Kaiser Family Foundation.

Pennsylvania's marketplace, Pennie.com, and New Jersey's marketplace, GetCoveredNJ, open for 2023 plan enrollment on Nov. 1.

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