How ACA Tax Credits Impact Patients With Chronic Conditions

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

Two million Americans battling chronic conditions like cancer and heart disease could leave the individual Affordable Care Act (ACA) market if the enhanced premium tax credits (PTC) expire. This support helps make insurance more affordable in the individual ACA market for those who struggle to purchase coverage on their own.

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.

The expiration of the enhanced PTCs would result in a significant increase in the cost of coverage for millions of Americans who rely on the ACA exchanges for their coverage.

This is the first in a series of insights exploring how ending the enhanced PTCs will impact stakeholders. Using our Healthcare Reform Microsimulation Model (HRM Model), we have identified key findings, ahead of a more comprehensive report, showcasing the impact on enrollees with chronic conditions if the enhanced PTCs are not extended.

The impact on patients with chronic diseases

Exhibit 1: By 2027, 2 million (24%) enrollees with chronic conditions are projected to leave the individual market with the expiration of the enhanced PTCs

There are an estimated 8.3 million people in the individual ACA market who have at least one of the following six chronic conditions: arthritis, asthma, cancer, cardiovascular disease, chronic obstructive pulmonary disease, and diabetes. Roughly 1.7 million of these enrollees are projected to become uninsured after the expiration of the enhanced PTCs. In Exhibit 1, enrollees with asthma are projected to leave the market at the highest rate (30%) compared to the other chronic conditions included within the analysis (17% to 23%).

Exhibit 2: Estimated change in healthcare cost per enrollee who would become uninsured by number of chronic conditions

Exhibit 3: Estimated change in healthcare cost per enrollee as a percentage of income who would become uninsured by number of chronic conditions

Enrollees with chronic conditions who become uninsured are projected to see an annual increase in healthcare costs between 17% and 44% of their annual household income, as seen in Exhibit 2 and 3. We estimate that their annual healthcare costs could increase as much as $10,700 per enrollee.

Our next article will explore how the loss of PTCs will affect different racial and ethnic groups in the individual ACA market.