Health Care Alert: On January 20, 2025, President Trump rescinded President Biden’s Executive Orders related to ACA enrollment deadlines, eligibility requirements, and federal subsidies for Medicaid expansion—resulting in a potential decrease in access to affordable health care for millions of Americans.
At the Health Foundation for Western & Central New York, we believe that everyone should have access to affordable medical insurance. Access to quality care can help decrease health disparities based on race, ethnicity, and socioeconomic status. Extending the Affordable Care Act’s enhanced premium tax credits—or better yet, making them permanent—will enable millions of individuals and families to maintain their health coverage.
When the ACA was signed into law in 2010, it included a provision for premium tax credits based on household size and income to ensure coverage would be affordable for all individuals and families. This means that some Marketplace enrollees paid lower premiums. The 2021 American Rescue Plan (ARP) expanded these tax credits in response to the devastating economic impact of the Covid-19 pandemic. The 2022 Inflation Reduction Act (IRA) further expanded the credits through larger subsidies and broader criteria for eligibility.
Unless Congress takes action, these expanded premium tax credits are set to expire after this year—and that means millions of people might no longer be able to afford coverage under the Affordable Care Act.
Rising premiums and competing expenses
A decade after its passage, the ACA remains the most affordable health insurance option for individuals who lack good employer-sponsored coverage but don’t qualify for Medicaid. Each year, however, the monthly premiums have increased. In 2025, ACA Marketplace insurers will raise premiums by roughly 7 percent. According to KFF, a nonpartisan health policy organization, the main factors are general inflation, medical inflation, hospital mergers and acquisitions, workforce shortages, and the increased demand for specialty drugs such as weight-loss medication.
Lynda Chudy, an insurance navigator with the nonprofit Healthy Community Alliance, explains that letting the expanded premium tax credits expire will make it hard, if not impossible, for many individuals and families to keep their ACA insurance. “They are walking a fine line,” Chudy explains. “They have just a certain amount to pay for health care and not a penny more.”
Consider her client Pete, a single father making just over $50,000 a year who can’t afford a monthly premium higher than $100. Or another client, Charlene, who hopes to retire in a few years, but right now, her house needs a new roof and water lines installed. She asked her employer not to give her a raise so she could still qualify for the premium tax credits.
“I see people bounce from having insurance to not having insurance because of the cost,” Chudy says. She also meets people who can’t imagine ever needing insurance for a medical emergency. “It’s just hard to imagine something you haven’t experienced.” After all, none of us ever plans to have a heart attack, suffer a stroke, get a cancer diagnosis, or be in an accident. Watch this video clip, in which Chudy explains how being able to afford health insurance helped one man recover from a serious accident—without being financially ruined.
According to the Center on Budget and Policy Priorities, a nonpartisan research and policy institute, if the expanded premium tax credits are allowed to expire, ACA premiums will increase the most for older enrollees, people with incomes over 400 percent of the Federal Poverty Level (FPL), and residents of states with high marketplace premiums. Check out this state-by-state analysis.
Calculating 2025 premiums
To estimate 2025 ACA Marketplace premium payments—both with and without the enhanced tax credits—Keep America Covered, a coalition of health care advocates, has prepared a handy calculator. Using the calculator, let’s take the hypothetical example of a family of three living in Cayuga, New York. The daughter is 9, the mother is 35, and the father is 37. Their household income is $72,000, or 270 percent of the FPL. Enrolling in an ACA Marketplace plan at the silver level will cost just $137 a month, thanks to being eligible for the expanded premium tax credit. Without the subsidy, the family’s monthly premium jumps to $380—more than double.
Extending the expanded premium tax credits is a win for all
Affordability and access are at the heart of health equity. Families shouldn’t have to choose between buying groceries, making home repairs, and paying for health care. Thanks to the expanded premium tax credits, people can purchase quality coverage and still take care of their other living expenses. Making health insurance more attainable also reduces the prospect of medical debt and uncompensated care, which puts a strain on hospitals and other provider networks.
The bottom line is that premium subsidies benefit everyone—not only individual enrollees but also our entire health care system. To keep moving toward the overall goal of health equity, the expanded tax credits should be made permanent. At a minimum, they should be extended.
