Who Benefits From Enhanced Premium Tax Credits in the Marketplace?

The Issue

The enhanced premium tax credits (PTCs) were put in place by Congress during the COVID-19 pandemic to help people maintain their health coverage and are set to expire at the end of 2025.

Key Findings

Urban Institute simulations show:  

• Enhanced PTCs will reduce the number of uninsured people in the United States by 14% and increase Marketplace enrollment by 71% in 2025.

• Enhanced PTCs make Marketplace premiums significantly more affordable. Under enhanced PTCs, average household premium costs in 2025 will be reduced by:
  • 50% to 100% for the lowest income groups (below 300% of the federal poverty level, or FPL).
  • about 25% for subsidized households with higher incomes (above 300% FPL), compared to premiums under the original PTCs.

• Enhanced PTCs lead to greater Marketplace enrollment in all income categories.
  • In five states (Texas, S.C., Miss., La., and Ga.) the ACA market will roughly double under enhanced PTCs, leading to declines in the number of uninsured people of 21% or more.

Conclusion

Researchers conclude the credits will lead to millions of additional people across America getting health coverage. 

About the Author/Grantee

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.