ACP joins call to keep health insurance tax credits for ACA Marketplace plans

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Congress must ensure continuation of premium tax credits that have contributed to record high health insurance coverage rates in the nation, according to the American College of Physicians (ACP).

The tax credits are set to expire at the end of 2025. ACP has joined with the American Academy of Family Physicians, the American Medical Association, and others to call for an extension.

“ACP strongly supports making these enhanced health insurance premium tax credits permanent,” the College announced.

This year, Health Insurance Marketplace coverage has topped 21 million people, almost double the 11 million enrolled in 2020, ACP Vice President for Governmental Affairs and Public Policy David Pugach said in a news release. Among those enrollees, 92%, or 19.7 million people, qualified for the premium tax credits, according to the Center on Budget and Policy Priorities (CBPP).

ACP cited a KFF analysis that attributed the growth to the premium tax credits and to more public outreach that happened with the American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022. The tax credits dropped premium costs for people enrolling in health insurance through the Marketplaces created under the Affordable Care Act (ACA); for the lowest-income enrollees, the premiums covered 100% of the premium costs. Tax credits became available for people earning up to 400% of the federal poverty level (FPL).

“Before the tax credits were expanded to include middle-income people, many individuals and families who did not qualify for Medicaid were being priced out of coverage,” Pugach said. “Now, in 2024, a family of three with an annual income of $103,000, which is four times the poverty level, qualifies for a tax credit that makes comprehensive health insurance coverage more affordable. A 40-year-old couple making $25,000 per year currently pays $0 for a silver plan premium with significantly lowered out-of-pocket deductible costs.”

ACP supports eliminating the eligibility cap of 400% of FPL and for Congress permanently expanding eligibility for enhanced premium tax credits through legislation known as the Health Care Affordability Act. However, Congress has few legislative days left in 2024, Pugach said.

“Another challenge is a political one: The health insurance premium tax credits are currently perceived as more of a partisan issue rather than a bipartisan one,” he said.

As a result, Pugach said an extension of these tax credits will likely need to be included in a broader bipartisan tax package or paired with other legislation.

“While it is possible that legislation could move this year, there is a greater likelihood for legislative activity some time in 2025,” he said.

Without the enhanced premiums, ACP predicted onerous effects on patients in 10 states that have not expanded Medicaid eligibility: Alabama, Georgia, Florida, Kansas, Texas, Tennessee, South Carolina, Mississippi, Wisconsin and Wyoming. In parts of North Carolina, South Carolina, Alabama, Mississippi, Texas and Utah, at least 10% of the population was enrolled in insurance through the ACA Marketplace, according to a map published by Keep Americans Covered, the joint effort by the physicians’ and health care organizations to pass the premium tax credits.

The CBPP found Black and Latino people made up the majority of ACA Marketplace enrollees for the first time in 2023, rising by more than 80% each from 2021 to 2023.

This month, the U.S. Centers for Medicare & Medicaid Services announced “window shopping” for health care plans available through the ACA Marketplace. Open enrollment begins Nov. 1 there and for the 20 states that run their own marketplaces.

This month, the U.S. Centers for Medicare & Medicaid Services announced “window shopping” for health care plans available through the ACA Marketplace. Open enrollment begins Nov. 1 there and for the 20 states that run their own marketplaces.