The expiration of enhanced premium tax credits for Affordable Care Act (ACA) marketplace plans is expected to have a devastating impact on Alabamians, particularly those who rely on the marketplace for health insurance. The credits, which were introduced in 2021, made health insurance more affordable for many people, but they are set to expire at the end of the year unless Congress takes action to extend them.
According to estimates, the expiration of the credits could lead to a 93% increase in premiums for individuals enrolled in ACA marketplace plans in Alabama. This could result in approximately 130,000 people losing their coverage, either because they can no longer afford it or because they will no longer qualify for subsidies.
The impact will be felt across the state, with hospitals, healthcare providers, and faith leaders all warning of the consequences of allowing the credits to expire. The Alabama Hospital Association has stated that the expiration of the credits will add “incredible financial stress” to hospitals that are already operating on “razor-thin or negative margins.” The association estimates that 27 of the state’s 50 rural hospitals are at risk of closure, with 19 of those at immediate risk.
Faith leaders are also concerned about the impact on their communities. Rev. Shane Isner, a pastor at First Christian Church in Montgomery, gets his health insurance from the marketplace and is worried about the potential increase in premiums. He notes that many pastors and faith leaders rely on the ACA and that the expiration of the credits could lead to instability and even church closures.
The expiration of the credits will also have a significant impact on the state’s economy, with an estimated $63 million in state and local taxes and $968 million in GDP at risk. The Commonwealth Fund estimates that approximately 9,100 jobs in the healthcare industry could be cut if the subsidies are allowed to expire.
Individuals like Adrienne Gilspie, a retired UAB Hospital employee, will also be severely impacted. Gilspie’s sons, who have aged out of eligibility for the VA’s student plan, will see their premiums increase significantly if the credits expire. Her oldest son, who has a rare condition, could see his premium jump from $9.79 to $80, or even $533 if he is unable to return to work.
The expiration of the credits is a result of a vote by U.S. Sens. Katie Britt and Tommy Tuberville of Alabama, who rejected a plan to extend the subsidies for three more years. President Donald Trump has stated that he will work with Democrats to find a solution on healthcare, but it is unclear what plan he supports.
Advocates are urging Congress to act quickly to extend the credits and prevent the devastating consequences of their expiration. As Debbie Smith, campaign director for Cover Alabama, notes, “There’s no doubt our healthcare system is broken and affordability absolutely needs to be addressed. But for the people who are about to lose their health coverage, there is a solution that’s right there. Congress can act now to help these individuals.”