The ACA’s enhanced premium tax credits are set to expire at the end of 2025 and that deadline is top of mind for the CEO of one of the largest for-profit health systems in the country.
Saum Sutaria, MD, chairman and CEO of Dallas-based Tenet Healthcare said on a July 22 earnings call that pushing for an extension of the subsidies is the system’s top lobbying priority.
He said it affects not only the healthcare industry, but also the macro economy through the support for small businesses that are “unable to provide broad-based insurance coverage options to their employees, which supports a very large part of the economy.”
With the expiration date looming, here are eight things to know about the subsidies:
1. Premium tax credits were originally available for enrollees making between 100% and 400% of the federal poverty limit, according to The Peterson Center on Healthcare and KFF. In 2021, amid the COVID-19 pandemic, American Rescue Plan Act increased the amount of these tax credits and expanded Marketplace eligibility to households with an annual income over 400% of the federal poverty limit, capping out-of-pocket premiums for a benchmark plan at 8.5% of income.
2. The enhanced tax credits were first set for two years — 2021 and 2022 – but the timeframe was extended through the end of 2025 with the passage of the Inflation Reduction Act.
3. Since the introduction of the enhanced tax credits, ACA marketplace enrollment has more than doubled from 11.4 million in 2020 to 24.3 million in 2025, according to KFF.
4. The Peterson Center on Healthcare and KFF said in a July 18 report that the “vast majority of insurers” are citing the expiration in their proposed 2026 rate filings, with most saying they will raise premiums by an additional 4%.
5. The expiration would also drive up out-of-pocket costs by more than 75% on average, which is expected to cause healthier enrollees to exit the marketplace and create a sicker risk pool, according to the report.
6. A permanent extension could cost tax payers $335 billion over the next decade, according to the Congressional Budget Office.
7. The AHA said the expiration would leave more patients uninsured or with higher costs, more incentive to delay or skip care, and an increase in uncompensated care. The organization warned this could lead to a $28 billion reduction in hospital spending over the next decade.
8. A possible renewal faces a tough political battle, according to Politico. Democrats are seeking an extension, but House Ways and Means Chair Jason Smith, R-Mo., said it could be a nonstarter for his conference.
