Health insurance premiums could rise for millions of Americans if new legislation proposed by Democrats is not passed.
Under the Affordable Care Act, Americans saw an enhanced premium tax credit for insurance on health insurance marketplaces. The credit was later extended by President Joe Biden’s Stopping Inflation Act but is set to expire at the end of 2025.
Eliminating the deductible would mean higher health insurance premiums for more than 20 million people, an additional 3 million would lose their health insurance altogether and about 9 million Americans would pay about $400 more in premiums, according to Sens. Jeanne Shaheen, D-New Hampshire, and Tammy Baldwin, D-Wisconsin.
Senator Jeanne Shaheen speaks during the 2024 Government Day reception hosted by Breakthrough T1D in the Kennedy Conference Room of the Russell Senator Office Building in Washington, D.C. on June 4. Senator Shaheen proposes making the enhanced tax credit under the Affordable Care Act permanent in her new bill. More photos by Jemal Countess/Getty Images for Breakthrough T1D
Shaheen and Baldwin have proposed the Affordable Care Act, which would make the enhanced premium tax credit permanent and ensure higher levels of health care coverage across America.
“Over the years, the ACA’s enhanced premium tax credit has significantly lowered the cost of health insurance and increased access to health care for families in New Hampshire and across the nation,” Governor Shaheen said in a statement.
“But let’s be clear: if Congress does not act before these tax credits expire, tens of millions of Americans will suffer significant increases in health care costs and millions more could lose their health insurance altogether. The time has come to extend these highly effective tax credits to prevent skyrocketing costs and ensure that all Americans have access to health care. And I’m proud that our Affordable Care Act will do just that.”
Baldwin said the new bill is a solution to the rising costs of medical care and prescription drugs that all too often keep families up at night.
“I have worked hard to reduce health care costs for Wisconsinites, saving thousands of families hundreds of thousands of dollars each year, and I will not back down,” Baldwin said in a statement. “Our bill will prevent skyrocketing health care costs for millions of hardworking Americans and give families peace of mind knowing they can get the quality care they need at a price they can afford.”
Illinois Democratic Rep. Lauren Underwood has proposed a nearly identical bill that would make the credit permanent for Americans.
The ACA’s enhanced tax credits initially increased the value of the tax credit for people earning between 100 percent and 400 percent of the federal poverty line, but the premium tax credit was also expanded to people earning more than 400 percent of the poverty line.
“The way the premium tax credit works is that when someone applies for insurance through the marketplace, their income determines the amount of premium tax credit they can receive to offset their monthly premiums for their insurance plan,” Chris Fong, CEO of Smile Insurance Group, told Newsweek.
“If the tax credit were to be eliminated, individuals and families who receive the premium credit would have to pay the full premium, imposing a significant financial burden on them and their families.”
Minority groups may be hardest hit by the elimination of the credit: Lawmakers say the credit’s expansion increased coverage for Black and Latino Americans by at least 95 percent.
So far, the bill has broad support among Democrats, but could face challenges winning support from Republicans.
Alex Bean, a financial literacy lecturer at the University of Tennessee at Martin, said many of the new credit expansions have been well-received among recipients, so their removal would likely spark backlash from people currently receiving them.
“Inflation remains a big factor in many Americans’ lives, and anything that softens the impact of rising health care costs on people’s wallets is popular,” Bean told Newsweek. “It’s hard to imagine these measures not being extended in some form.”
