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The expiration of the ACA enhanced premium tax credits at the end of this year would reintroduce the “subsidy cliff,” which abruptly ends the credit for Marketplace enrollees earning over 400% of poverty. That means some middle-income enrollees, especially older ones, would spend a much larger share of their income on premium payments than those earning just slightly less with the credit.
Affordable Care Act Marketplace insurers are raising premiums by an average of 18% next year, due in part to the expiring enhanced premium tax credits. Even if the credits are extended in shutdown negotiations, it is unlikely that insurers will have time to revise premiums, though the credits would still offer enrollees relief from them.
Since the enhanced premium tax credits became available in 2021, ACA Marketplace enrollment has increased significantly in some red states, and 57% of enrollees now live in Republican congressional districts.
The ACA enhanced premium tax credits expanded financial assistance to more Marketplace enrollees, an expansion that was especially helpful to older middle-income enrollees, who would see the largest increases in out-of-pocket premiums if the enhanced credits expire.
As Democrats push for an extension of the ACA’s enhanced premium tax credits, new data from KFF show the extent to which states won by Trump in 2024 have come to rely on the ACA Marketplaces and the tax credits, which make health care coverage more affordable for low- and middle-income Marketplace enrollees.
A new KFF Health Tracking Poll finds more than three-quarters (78%) of the public say they want Congress to extend the enhanced tax credits available to people with low and moderate incomes to make the health coverage purchased through the Affordable Care Act’s Marketplace more affordable.
KFF's Health Tracking Poll finds that more than three-quarters of the public say they want Congress to extend the ACA enhanced premium tax credits that are set to expire at the end of this year. If the credits do expire and the average premium more than doubles, seven in 10 of those who purchase their own insurance say they would not be able to afford premiums without significantly disrupting their household finances.
KFF Vice President Cynthia Cox takes a broader look at the expiring enhanced tax credits, which Congressional Democrats have made central to their government funding demands, and how they lower health costs for many traditionally Republican constituencies, such as people in southern states, small business owners and employees, farmers and ranchers, older adults, and rural Americans.
This analysis examines the share of adult workers in occupations that rely more heavily on individual market coverage for health insurance, which is largely made up by the Affordable Care Act (ACA) Marketplaces.
This data note examines how the expiration of the ACA's enhanced premium tax credits could affect the out-of-pocket portion of premiums for different households.
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