Legislation Extends Health Tax Credits to Insure 3.8 Million Americans

The Congressional Budget Office (CBO) has projected that a permanent extension of premium health subsidies could significantly increase health insurance coverage, potentially insuring up to 3.8 million more Americans by 2035. While this policy would add approximately $349.8 billion to the national deficit over a decade, it aims to stabilize and expand access to health coverage. The subsidies, originally established under the Affordable Care Act in 2010, were temporarily expanded during the COVID-19 pandemic in 2021 and extended in 2022, but their expiration is scheduled for December 31 without legislative action.

This analysis was commissioned by Democratic lawmakers seeking to prevent the upcoming expiration and to encourage negotiations with Republicans on extending these benefits. Efforts also include rolling back certain Trump-era policies such as the final marketplace rule that limits enrollment periods and eligibility, which, if repealed, could boost coverage by an additional 300,000 people and increase the deficit by $40.3 billion.

Furthermore, repealing parts of the reconciliation law related to health care marketplaces might increase insured individuals by nearly 2.9 million while adding approximately $271.9 billion to the deficit over ten years. These proposals aim to address coverage gaps, especially as the open enrollment period begins on November 1, and to reduce overall healthcare costs by lowering premiums.

CBO estimates highlight that waiting too long to implement these extensions could diminish their effectiveness, with premiums for marketplace plans projected to be 7.6% lower annually from 2026 to 2035 if the credits are made permanent. Immediate action before September 30 could result in more substantial savings and coverage improvements, whereas delays would lessen these benefits.

This legislative debate occurs amidst negotiations on various health policies, with some Republican leaders opposing extensions due to concerns over federal spending and the perceived encouragement of expensive health plans. Nonetheless, proponents argue that restoring these subsidies is crucial for making healthcare more affordable and accessible for millions, especially in light of rising premium costs and coverage challenges.