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Health insurance costs for middle-income Americans insured through Obamacare could start to rise next month before surging in January, if Congress doesn't intervene. Their premiums have been offset since 2021 by Enhanced Premium Tax Credits (ePTC), which are set to expire. That is one of the topics on the table in the negotiations on a congressional spending bill that must pass before October 1 to avoid a government shutdown, according to San Antonio Congressman Joaquin Castro.
"These are slated to go away at the end of the year, so in our negotiation, the case that we're making is that millions of Americans are going to be without health insurance if these tax credits go away," Castro said during a virtual news conference Thursday afternoon.
The ePTC provision is a subsidy that was included in the American Rescue Plan Act of 2021 and then extended to 2025 as part of the Inflation Reduction Act. For those who were eligible for premium subsidies before the ePTC, this credit increased the total amount of tax credits they would receive. Middle-income people who made above 400% of the poverty line and hadn't previously been eligible for a subsidy, became eligible. That means an individual enrolled in coverage for plan year 2026 could make $62,600 and get a premium tax credit.
Lynn Cowles, Director of Health and Food Justice for Every Texan, joined Castro at the briefing and said more than two million people have enrolled in health insurance plans in Texas since ePTCs were adopted. If they're allowed to expire, she fears many will be forced into plans with less expensive premiums but much higher copays. The plan with the cheapest premiums also has the highest point of service costs.
"If somebody picks the Bronze Plan on the Health Insurance Marketplace, they don't have a copay to go see a specialist," Cowles said. "They pay the full cost of that visit, up to their deductible, which can be $8,000 or $9,000."
Cowles said many middle-income families will still qualify for some assistance, but others won't qualify at all, spiking the annual premium for a family of four making $120,000 by up to $15,000.
"That's just not possible to pay 10%, 11%, or 12% of your household income in monthly health insurance premiums," Cowles explained. "It just doesn't work for families, right?"
Some of the people who may find themselves in this position are small business owners. Anita Fernández co-owns OCI Group, a consulting firm, and calls this population the 'working middle.'
"You make too much to qualify for Medicaid, Medicare, etc, but not enough to be able to afford a full-blown private insurance plan. And as a small business owner, no one else is going to take care of that for us, except us," Fernández said.
If another ePTC extension cannot be negotiated in Congress before October 1, premiums may start to rise ahead of their expiration at the end of the year. Castro said the negotiation is currently at a standstill, and he blames the GOP.
"We have given them every opportunity to try to negotiate in good faith to keep the government open," Castro said, "And what we've been working to do is to protect health tax credits that make sure that health care is affordable for millions of Texans and millions of Americans."
The Congressional Budget Office has estimated that 4.2 million people will be uninsured by 2034 if the ePTCs are allowed to expire.
If you'd like to see how the expiration of the Enhanced Premium Tax Credit might impact you, KFF has created an interactive tool where users can enter their geography, income, and family size, and get a good idea of how their premium costs might change.
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