Insurance credits to expire

Standard-Radio Post reporter City leaders and members of the health care community met last week to discuss many Gillespie County residents being priced out of health insurance if enhanced premium tax credits (EPTC) are not renewed at the end of the year.

The Fredericksburg Chamber of Commerce and Methodist HospitalHill Country co-hosted a panel at the John William Klein Meeting Room on the topic to inform the public about upcoming impacts to county residents’ pocketbooks. The panel discussion called, “A Rural Health Crisis: How expiring tax credits could hurt business, workers and access to healthcare coverage” was held Wednesday, Aug. 20.

Panelists were doubtful the federal government or state legislature would act before the credits were set to expire at the end of this year.

Pricey scenario Panelists included Keith Stehling, owner of Keith Stehling Insurance; Deborah Jennings, a clinical assistant professor at UT Health; Greg Hansch, executive director of NAMI Texas, and John Willome, executive director of The Good Samaritan Center. Emily Kirchner, Fredericksburg City Councilmember, moderated the discussion.

Without this tax credit, Gillespie County residents who purchase health insurance through a Health Insurance Marketplace will see their insurance premiums rise substantially.

A typical medium-income family of four could see a 93% increase in their premium, according to a study done by Keep America Covered (KAC), a coalition of entities in the health care community.

“I have a family in Mason, Texas, husband and wife, two kids. Their tax credit is like $2,200 a month. That’s going to go away, and I just cannot com- John Willome, executive director of The Good Samaritan Center, shows a map of counties with the lowest rates of insurance coverage, most of which are in Texas (including Gillespie). Changes ahead for the Earned Premium Tax Credit could cause that number to spike. Standard-Radio Post/Annie Bresee INSURANCE: Rate may price many out of coverage prehend how they’re going to all of a sudden pay that extra money,” Stehling said. “That’s a house payment.”

Jennings, with UT Health, compared the increase to what someone on COBRA may see after their employment ends.

“Your employer pays a very large amount of your health insurance. All of the sudden you’re on COBRA, and your $100 a month went to $900 a month. Essentially this is what is going to happen,” she said.

The tax credit will also impact those who do not buy their healthcare on the marketplace.

“A lot of (people buying off the marketplace) are just going to decide not to carry insurance, which means they put off preventative care,” said Clint Kotal, CEO of Methodist HospitalHill Country.

Over 4,000 people in Gillespie County buy insurance through the marketplace, according to Kotal. The hospital has encountered this type of insurance over 3,000 times this year, not including independent doctors and healthcare providers.

Without preventative care, more patients will come in with serious health issues. Without insurance, the treatment of these serious issues will be uncompensated for the hospital.

This cost would fall on the taxpayer, as funding for uncompostated care comes from local and federal government programs, according to the Texas Department of Health and Human Services.

Negative effects Jennings added the increased cost will price out the people that need care the most, and even those training to provide care.

“If you are in school for any health career, you are required to carry health insurance. Now, not only are they out more money for tuition and student loans, but now they are out more money trying to pay for their health insurance,” Jennings said.

“In 2021, 5.2 million Texans lacked coverage. The following year, only 4.9 million lacked insurance coverage,” said Greg Hansch, of NAMI Texas, a mental health care organization. “One of the reasons why fewer people went uninsured just over that oneyear span was because they had access to EPTC.”

He added this effect was pronounced in rural areas, where premiums tend to be high. Texas conditions Texas leads the nation in residents under 65 that are uninsured.

Gillespie County is ranked 229th of 255 counties in residents under 65 uninsured, according to Willome. This means 24.7% of that Gillespie population does not have health insurance.

“Eighty percent of people do not qualify for tax credits, then all of a sudden, everybody qualified for tax credits. Everybody has gotten quite used to these substaintially high tax credits,” Stehling said.

In 2024, 3,352,000 Texans received these tax credits, according to Hansch.

Premium tax credits were introduced under the Af- fordable Care Act (ACA) in 2014. This lowered premiums for qualifying individuals who buy insurance on the marketplace. Under ACA, those at the poverty line or below 400% of the federal poverty line would receive these credits if they bought insurance on the market. The amount someone could spend on their insurance was capped at 8.5% of their total income.

These credits were expanded in 2021, under the Inflation R e d u c t i o n Act (IRA), to Enhanced Premium Tax Credits.

“There are about 225 million people that haven’t aged into Medicare and don’t qualify for Medicaid,” Kotal said. Of that 225 mil- 175 million get insurance through an employer. This leaves 50 million Americans.

Half of those will likely buy insurance from the Marketplace, he said, while the other half will go uninsured.

Following the expiration at the end of the year, these tax credits revert to the credits outlined under ACA.

“[People below 400% poverty level], they’re still going to get tax credits, but I’m not sure how far they’re going to get scaled back. But they will be scaled back to pre-COVID rates,” Stehling said.

Impacts Julie Herbort of Heath Family Brands expressed anxiety for her employees. “We just got notified that our renewal is probably going to be a 30% increase and we have 150 employees. We pay half of the employee premium, and also the employee-spouse and employee-family,” Herbort said. “We can’t continue to pay that amount and we are afraid that were going to have a lot more employees that can’t afford insurance now.”

Stehling forecasts this issue impacting smaller business even greater.

“When enhanced premium became understood, I saw a real downtick in small employers wanting a quote for small group health insurance,” Stehling said. “They can’t compete with the federal government’s tax credits [so they told employees to seek insurance on the ACA]. I think what’s going to happen is once these enhanced premium tax credits get scaled back, there will be pressure put on these small employers.”

Hansch cited a NAMI study that showed 69,000 Texans losing jobs and 300,000 people nationwide.

He added that even with a $1,700 tax relief from the One Big Beautiful Bill, a medium-income family of four would see a $1,247 shortfall each month, erasing any tax benefit, because of the projected premium increase of $2,947.

Hansch worried about those in need of mental health care after the credit expires.

“Mental health treatment plans are far more accessible when a person has insurance, and EPTC simply makes insurance more affordable for people,” Hansch said, noting that more than 800,000 people live with a mental health condition in Texas.

There will also be a larger economic impact on businesses and hospital, according to the panel.

“Congress not giving serious consideration to the extension of these EPTCs is pennywise and pound foolish,” Hansch said. “Its going to put our individuals, businesses and families, and the broader U.S. economic sphere, at a crisis point.”

Fallout from the expiration may force lawmakers to reexamine the tax credit, Stehling said. The insurance salesman was doubtful the legislature would act before the credits are set to expire at the end of the year. Clockwise from top left: Methodist Hospital CEO Clint Kotal said loss of the credit would lead to less preventative care; UT Health’s Deborah Jennings said medical debt is already the leading cause of bankruptcies; and insurance broker Keith Stehling said families and businesses could see huge cost increases.