This content relates to a study commissioned by Blue Cross Blue Shield Association (BCBSA).

Millions of Americans who have health insurance through the Affordable Care Act (ACA) exchanges could see their premium rates rise more than $1,000 a year if the enhanced premium tax credits (PTCs) that have been in place since 2021 expire.

Since 2021, the enhanced PTCs introduced by the American Rescue Plan Act have significantly improved the affordability of health insurance for millions of Americans using the ACA Exchange. Those provisions were continued under the Inflation Reduction Act but will expire at the end of 2025 without congressional action. The enhanced PTCs are more widely accessible and offer greater financial protection than the original PTCs that first became available in 2014.  

If the enhanced PTCs are not renewed, millions of Americans who depend on ACA exchange coverage will face significantly higher premiums for their health insurance coverage. 

Key findings on potential premium increases without enhanced PTCs

In Exhibit 1, we project that enrollees across all income groups who currently benefit from enhanced PTCs could see their average net premiums rise by $1,200 per year per enrollee, representing a of 90% increase. 

The largest group affected are the 18.2 million enrollees with household incomes at or below 400% of the federal poverty level (FPL) (currently $60,240 for a one-person household in most states). These enrollees, who are currently receiving enhanced PTCs, are expected to see their annual premiums increase by 72% on average, or about $768 per year.

The biggest net premium increases will impact enrollees with incomes above 400% FPL, who are currently receiving enhanced PTCs. These enrollees are projected to face an average annual premium increase of $5,600, or 134%, as they would lose access to any PTCs. It is important to note that this covered population with income above 400% FPL is on average six years older and generally lives in areas with a higher cost of living than the population with income below 400% FPL, so even though they have higher incomes, health insurance affordability could be a concern for members of this group.

This is the third installment in our series of insights leading up to the release of a more comprehensive report. Using our Healthcare Reform Microsimulation Model (HRM Model), we have identified key findings that highlight the potential impact on stakeholders if these enhanced PTCs are not extended. Our first article details how the loss of PTCs affects those with chronic conditions, and our second explores its impact by race and ethnicity.