Should policymakers choose not to extend enhanced subsidies for Affordable Care Act (ACA) plans, about 4 million people would likely become uninsured, according to a new analysis.
The report from left-leaning think tank Urban Institute finds that should the premium tax credits expire after 2025, as they’re currently set to do, enrollment on the exchanges would decrease by 7.2 million people, with 4 million of them becoming fully uninsured.
The enhanced subsidies extended eligibility to people earning up to 400% of the federal poverty level and ensured people earning between 100% and 150% of the poverty level could secure coverage with no premium cost. Given the increased access to the subsidies, enrollment in exchange plans has grown rapidly, reaching 21.4 million in 2024, according to the report.
The effect would be felt most strongly in states that have not expanded their Medicaid programs under the ACA, the researchers said, and overall impacts would vary between regions.
“Millions of individuals and families across the United States rely on these tax credits to access high-quality, affordable healthcare,” said Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, which backed the study, in a press release. “Allowing these credits to expire will force families to choose between healthcare and other necessities like housing and food. The implications will be profound, with the ripple effects being felt across the entire U.S. economy.”
Ten states have yet to expand Medicaid, and, while these states account for just 28% of the people under 65 in the U.S., they would account for 63% of those losing marketplace coverage should the subsidies expire, or about 4.5 million people.
In Louisiana and Kentucky—two expansion states—as well as Texas, subsidized marketplace coverage would decrease by more than 60% should the enhanced tax credits end, according to the study.
The study also found that the loss of the subsidies would have a disproportionate impact on Black and Hispanic enrollees. About 1.1 million Black people would lose marketplace coverage if the subsidies were not extended, with most (75%) living in states that did not expand Medicaid.
In addition, 1.3 million Hispanic enrollees would lose coverage through the exchanges without the enhanced subsidies, and 75% of these people live in non-expansion states. By comparison, about half of the 4.3 million white people who would lose their marketplace plans live in states that did not expand Medicaid.
For Black and Hispanic people living in these states, the uninsured rate would increase by 4.2% should the subsidies expire, nearly double the 2.6% increase projected for whites.
The study also warns that ending the enhanced subsidies could push younger and middle-aged enrollees out of the pool, which would likely drive up costs for the older people who remain.
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