The US government shutdown has brought attention to the issue of extending Affordable Care Act (ACA) tax credits, which are set to expire in December. Democrats are pushing for an extension, citing the urgency of the situation, while Republicans argue that there is plenty of time to figure it out. The tax credits make ACA health care premiums affordable for many Americans, and their expiration could lead to a significant increase in premiums.
A recent poll found that over 78% of the public, including majorities of Democrats, independents, Republicans, and MAGA supporters, favor extending the enhanced ACA tax credits. Insurance commissioners, including North Dakota’s Jon Godfread, are also calling for an extension, citing the need to act before open enrollment begins on November 1.
If Congress fails to extend the subsidies, premiums are expected to double for many consumers next year, potentially driving people to go uninsured. The Congressional Budget Office estimates that 4 million people will become uninsured in the next few years if the enhanced tax credits expire. Most enrollees in the ACA marketplaces live in states that President Trump won, and they are often small business owners, farmers, ranchers, or gig workers.
The subsidies are expensive for the government, with the Congressional Budget Office estimating that extending them permanently would cost $350 billion over the next decade. Conservative groups oppose the enhanced subsidies, arguing that they were meant to be temporary during the COVID-19 pandemic and that extending them will exacerbate rising health care costs. However, some Republicans, such as Rep. Marjorie Taylor Greene and Sen. Josh Hawley, support extending the tax credits or coming up with a different plan to prevent dramatic rate hikes for consumers.
The debate over the ACA tax credits is complex, with different opinions on the urgency of the situation and the potential consequences of not extending the subsidies. However, with open enrollment approaching, the need for a solution is becoming increasingly pressing. As Godfread notes, the discussion about rising health care costs is separate from the need to extend the subsidies, which have helped provide access to consumers. Ultimately, the fate of the ACA tax credits will depend on the ability of lawmakers to come to an agreement, and the consequences of their decision will be felt by millions of Americans who rely on the ACA marketplaces for their health insurance.