Healthcare spending will drop $11.4B, over 3 million to lose insurance if ARPA tax credits expire, study finds

Healthcare spending will decrease by $11.4 billion nationwide in 2023 and 3.1 million people will become uninsured if Congress does not extend the American Rescue Plan Act subsidies established last year, according to a study released May 25 by the Urban Institute.

The Washington, D.C.-based nonprofit received funding for the report from the Robert Wood Johnson Foundation.

ARPA increased premium tax credits for ACA health plans and extended eligibility to individuals who make up to 400 percent above the federal poverty level, leading to ACA enrollment reaching record highs in 2022.

Five results if the tax credits expire:

  1. Hospital spending would decrease by $3.8 billion.

  2. Prescription drug spending would decrease by $3.4 billion.

  3. Spending on services provided outside of hospitals and physician offices would decrease by $2.8 billion.

  4. Spending on physician practice services would decrease by $1.3 billion.

  5. Florida, Georgia, North Carolina, South Carolina and Texas would experience the largest decrease in total healthcare spending, ranging from 1.3 percent to 1.9 percent.

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