What if the American Rescue Plan Act Premium Tax Credits Expire?

Coverage and Cost Projections for 2023: Over 3 Million People Could Lose Insurance if American Rescue Plans’ Premium Tax Credits Expire

The Free Clinics makes available a pharmacy for patients to fill prescriptions.

The American Rescue Plan’s enhanced premium tax credits helped make health insurance more affordable for individuals and families during the pandemic. Millions could become uninsured when the Premium Tax Credits expire at the end of 2022.

The Issue

The American Rescue Plan Act of 2021 (ARP) increased Premium Tax Credits (PTCs) for Marketplace insurance coverage and extended eligibility for PTCs to more individuals, making health insurance more affordable for millions in America. However, the enhanced tax credits are set to expire after 2022.

Key Findings

  • Over 3 million more people (3.1M) could be uninsured in 2023 if the PTCs expire at the end of 2022, as planned.

  • Non-Hispanic Black individuals, young adults, and people with incomes between 138 and 400 percent of the federal poverty line would experience the largest coverage losses.

  • Individuals and families enrolled in the Marketplaces or other nongroup coverage will pay hundreds of dollars more per person each year in premiums if the PTCs expire. People currently eligible for PTCs with incomes between 150 and 400 percent of the federal poverty level would pay over $1,000 more per person for a silver plan. People with incomes above 400 percent of the federal poverty level who lose eligibility would pay roughly $2,000 more per year.

  • Extending the enhanced PTCs will increase the federal deficit by $305 billion over 10 years, unless legislation extending the PTCs includes raising revenue.

Conclusion

The ARP’s enhanced PTCs resulted in unprecedented enrollment in Marketplace health insurance. Their expiration would result in mass coverage losses and premium hikes. Researchers say Congress would need to act by midsummer if they wish to extend the PTCs to give Marketplaces, insurers, and outreach programs time to prepare for the 2023 open enrollment period, which begins this November.

About the Urban Institute

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.