So, you think the only tax drama looming over us is the expiration of the Tax Cuts and Jobs Act in 2025? Well, hold onto your wallets, folks! Another tax change is set to disappear and could hit millions of Americans right where it hurts: their health insurance premiums. If Congress doesn’t get its act together and extend the enhanced premium tax credit (PTC) next year, you can say goodbye to affordable health coverage.
Here’s the lowdown: the PTC was beefed up under President Biden to make health insurance through the Affordable Care Act (ACA) Marketplace more accessible. This expanded credit means that even people with incomes above 400% of the Federal Poverty Line can benefit. Thanks to this enhancement, the average enrollee saved about $700 in 2024. But here’s the kicker—the Inflation Reduction Act put a deadline on these enhancements, and if Congress doesn’t act by the spring of 2025, we could see premium costs skyrocketing.
Analysts are sounding the alarm, predicting that nearly all 21 million people currently enrolled in Marketplace plans will face higher premiums. That could mean making impossible choices like paying for health insurance or groceries. It’s estimated that around 4 million people could lose their health coverage altogether if this tax credit isn’t extended. Yikes!
And don’t think Medicaid will swoop in to save the day. Only those living in states that expanded Medicaid can qualify, leaving many stuck in what’s known as the Medicaid gap, where their incomes are too high for Medicaid but too low for marketplace subsidies. With ten states refusing to expand Medicaid, over 1.6 million people are already feeling the squeeze.
Congress has to move fast. Many people believe they have until the end of 2025 to address this issue. Action must be taken by spring 2025 to avoid complications. Waiting until fall to decide on coverage could lead to difficulties.
There are proposals to make the enhanced PTC a permanent program, and they have support from important political leaders. But as we all know, political gridlock is a real thing.
So, if your premium spikes consider alternatives like Medi-Share, a healthcare-sharing option where members pitch in to cover each other’s medical expenses; just remember, if Congress drops the ball, you might need to explore your options sooner than you think.
