Enhanced subsidies under the Affordable Care Act are set to expire at the end of 2025, with Democratic lawmakers racing to reach a deal with Republicans to extend the tax credits before this year's legislative session concludes.
On Dec. 5, Democrats privately proposed a one-year extension of the ACA subsidies, which would prevent an estimated 2.2 million people from losing health coverage, people familiar with the matter told The Washington Post.
Five notes:
- Premium tax credits for ACA coverage were originally extended through the Inflation Reduction Act, which President Joe Biden signed into law in 2022. The subsidies offer assistance to individuals earning up to 400% of the poverty level. This year, enrollment in ACA plans reached a record high of 21.4 million, largely driven by the subsidies.
- Democrats have issued proposals to extend the subsidies as a way to prevent increases in health insurance costs for millions of Americans. More than 2 million people could lose health coverage in 2026 if the ACA credits expire, according to new estimates from the Congressional Budget Office, which Democrats referenced in proposing the one-year extension to Republicans.
- If the credits expire, the number of uninsured people will continue to increase year over year, growing by an average of nearly 4 million annually through 2034, according to the CBO's latest estimates.
- Republicans declined to comment on the Post's inquiries regarding whether they will agree to proposals to extend the subsidies. GOP lawmakers have regarded the tax credits as a costly program that offers subsidies to individuals who do not need the assistance. Prior to the enhanced credits, individuals whose incomes surpassed the 400% poverty level were not eligible for ACA premium subsidies. The credits expanded eligibility to those earning above 400%.
- A permanent extension of the tax credits would cost the federal government an estimated $355 billion over the next decade, according to CBO projections published in June.