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A new report published by the Congressional Budget Office (CBO) found that if the Affordable Care Act (ACA) extended subsidies Allowed to expire at the end of 2025, millions of people will be left uninsured and premiums will rise.
In a response to the Senate Finance Committee, CBO found that “failing to extend the credit will increase the number of people without health insurance and increase the average gross benchmark premiums for plans purchased through the marketplaces.”
The expanded tax subsidies were first enacted in 2021 through the American bailout act (ARPA) and extended until the end of 2025 to Inflation reduction law. Premium tax credits reduce out-of-pocket costs for eligible households.
“Without a permanent extension, CBO estimates, the number of uninsured people will increase by 2.2 million in 2026, by 3.7 million in 2027, and by 3.8 million on average each year from 2026-2034.” , the report states. .
The CBO estimate for 2026 was slightly lower, as the bureau assumed some people would stay because of automatic renewals and needed more time to respond to expired tax credits.
The report also projects that gross referral premiums will increase by 4.3% in 2026 if the subsidies expire, increasing by an average of 7.9% between 2026 and 2034.
With the Republican Party ready have a trifecta of power from next year, the extended tax subsidies are unlikely to be renewed before the end of 2025. The CBO has previously done estimated how much it would cost $335 billion over 10 years if the subsidies were made permanent.
Still, Democrats are pushing to preserve the provisions, privately offering Republicans a deal for a one-year extension of the subsidies late Thursday, according to reports. The Washington Post.
