Democrats pitch permanent ACA subsidies

U.S. Senators Jeanne Shaheen (D-N.H.) and Tammy Baldwin (D-Wis.) have introduced the Health Care Affordability Act, which aims to permanently extend the Affordable Care Act’s enhanced premium tax credits for marketplace coverage. 

The credits, originally extended through the Inflation Reduction Act, are set to expire at the end of 2025. If they are not renewed, over 20 million Americans will see higher health insurance costs, with an estimated 3 million losing coverage and about 9 million paying more, according to a news release. Identical legislation was introduced in the House by Rep. Lauren Underwood (D-Ill.).

The tax credits increased subsidies for individuals earning between 100% and 400% of the federal poverty level and expanded eligibility for those earning above 400% of the FPL. 

"If we don’t act, millions of families will face a massive tax hike that will make their premiums far less affordable," Senate Majority Leader Chuck Schumer said at a Sept. 25 news conference.

Debates surrounding the ACA have shifted from "repeal and replace" to discussions on the impending expiration of subsidies. Former President Donald Trump has said he would consider changing the ACA only if a less expensive alternative is proposed. While the Republican Party has moved away from repeal efforts, lawmakers have expressed concerns about fraud on ACA exchanges.

Marketplace enrollment reached a record high of more than 20 million in 2024, partly due to the subsidies. However, making the subsidies permanent would add $335 billion to the national deficit between 2025 and 2034, according to the Congressional Budget Office. Public support for making the credits permanent remains high, with 78% of Americans in favor.

ACA reform has not been a major focus of the 2024 presidential campaigns. Democratic nominee Kamala Harris supports maintaining and expanding the ACA, while Republican nominee Donald Trump's campaign has proposed deregulating the individual insurance market, which could lower premiums for younger, healthier individuals but increase costs for older adults and those with preexisting conditions.

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