The longest government shutdown is over, but millions of people are waiting for Congress to resolve a healthcare impasse with its own potential historic implications — enhanced premium tax credits.
The Urban Institute estimates nearly five million people with Marketplace health insurance will lose coverage if enhanced premium tax credits (PTCs) expire, unless Congress makes the credits permanent or extends them. If the credits expire, the uninsurance rate would increase most among non-Hispanic Black people, with the rate climbing to 30%; to 25% among non-Hispanic White people; and to 25% among young adults ages 19 to 35, according to the Institute’s brief, “4.8 Million People Will Lose Coverage in 2026 If Enhanced Premium Tax Credits Expire.”
The credits greatly reduce Marketplace premiums for individuals with lower incomes and provide subsidies to individuals with higher incomes, expanding affordable coverage to consumers at all income levels.
Stephanie Burton, a Kansas City, Mo., attorney, used the Marketplace for herself and four children before securing a job with health insurance.
“People assume that because I am an attorney that I have a bucket of money, but when I graduated law school I was diagnosed with Type 2 diabetes, I couldn’t get health insurance, and there were no jobs, so I had to start my own practice,” she said. “I was able to get the diabetes medication I needed because of PTCs; otherwise, it would have cost me $900 per month, which was more than my mortgage.”
“And the income subsidy helped my daughter who has mental health issues because she could access private insurance, which meant she didn’t have to wait for treatment; her in-patient stays were covered, and her medication was only $40 per month instead of $1,600 per month. So, the PTCs and the income subsidies are important,” Burton said.
The Urban Institute’s measurement of the “erosion of affordability” should enhanced PTCs expire, shows in 2026 average net premiums would be more than four times higher — $919 instead of $169 — for individuals and households with subsidized Marketplace coverage and incomes below 250% of the federal poverty level (FPL) under standard PTCs, compared with enhanced PTCs. For context, 250% of the FPL is $39,125 for an individual and $80,375 for a family of four.
Uninsurance rates will vary by state, depending on whether a state has expanded Medicaid according to Matthew Buttegens, lead brief author and a senior fellow in the Health Policy Division at the Urban Institute. For example, in Medicaid expansion states like Montana and Ohio, the percentage of uninsured will jump to 29% and 26% respectively.
“The Medicaid expansion states would see particularly large decreases in coverage. They saw the biggest increases in coverage after the enhanced tax credits were put in effect, so this is reversing that,” Buttegens said.
The Marketplace is a source of coverage for people without employer-sponsored insurance or are ineligible for Medicaid or Medicare, low income individuals and households, and entrepreneurs. And Centers for Medicare & Medicaid Services (CMS) data show Marketplace enrollment more than doubled when PTCs were added to the Marketplace in 2021, underscoring the credits’ purpose to expand coverage. However, if Congress does not act before the credits expire December 31, 2025, the reverse will happen, and millions will be stranded without health insurance.
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