PPACA Presently and After it Expires

I placed the 2025 Poverty Level Guidelines on this post so readers could get an idea of what salary qualifies them for ACA subsidies. Everyone talks about 100 percent of this or 400% of that without knowing exactly what the numbers are based up the Federal Poverty Level. Hence the chart below. It stops shy of 800%. In any case you get the idea.

How Federal Poverty Level amounts determine eligibility for reduced-cost health coverage. An Income between 100% and 400% FPL. Old Method.  If your income is in this range, in all states you qualify for the premium tax credit that lowers your monthly premium for a Marketplace plan. Most recently, I was talking with one of the Gurus on healthcare and the insurance.

I suffer from a blood disorder which surprises me once and a while. I can trace if back to Camp Lejeune. If I did not have Medicare or the VA, my cost using a Tier 2 Silver plan would be $8,000/dose for Rituxan. It is administered 4 times. How is such a plan of payment equitable? It is not.

Wanting to go back to the good old days on 400% FDL is a no go, We need to keep 800% FPL.

“Who Will Pay If ACA Tax Credits Lapse?” MedCity News

About 22 million Americans would face sharply higher healthcare costs if enhanced ACA tax credits expire at the end of the year. Experts warn that the impact would extend beyond just families relying on ACA courage — also straining hospitals, increasing uncompensated care and potentially costing the economy hundreds of thousands of jobs.

– By Katie Adams

It’s been a week since the nation’s longest-ever government shutdown ended, but millions of Americans still don’t know whether they’ll be able to afford their healthcare coverage next year.

The shutdown finally ended November 12 when a funding bill was signed into law. Notably absent from the law was any extension of the enhanced Affordable Care Act (ACA) subsidies that 24 million Americans rely on to keep their premiums somewhat affordable.

Enhanced ACA tax credits were introduced during the pandemic to expand healthcare affordability, and they are set to expire at the end of this year if Congress doesn’t act. 

This year, 93% of ACA marketplace enrollees received the tax credits. For many, these expanded subsidies have meant the difference between affording routine care for themselves and their loved ones and skipping these visits entirely.

Experts say that the expiration of these subsidies wouldn’t just push coverage out of reach for millions of Americans — it could also create significant challenges for hospitals already battling financial pressures, as well as potentially hurt the economy at large. 

Overall, healthcare leaders have a number of concerns about what could happen if Congress doesn’t renew the expanded tax credits — premiums could increase, a larger share of Americans could become uninsured, hospitals could be forced into more bad debt and uncompensated care, and most worrisome, American public health would further deteriorate.

When the ACA health insurance marketplaces launched in 2014, tax credits went into effect to make coverage more affordable for individuals and families. These tax credits (which are based on ACA shoppers’ income and household size) were later grew temporarily under the American Rescue Plan Act in 2021, and then extended again through the Inflation Reduction Act in 2022. As a result, people were receiving larger subsidies and eligibility criteria​ were more broad.

When the marketplaces were first established, the government provided subsidies to people earning 100-400% of the federal poverty level, and individual premium contributions ranged from 2.07-9.83% of their income.

The American Rescue Plan Act and its extension under the Inflation Reduction Act boosted these subsidies by lowering premium contributions to 0-8.5% of income and approved $0 premiums for people earning 100–150% of the federal poverty level. The changes introduced during the pandemic also allowed Americans earning above 400% of the federal poverty level to qualify for subsidies if premiums exceeded 8.5% of their income.

These credits have played a key role in reducing the country’s uninsured rate — last year, the national uninsured rate reached an all-time low of 7.9%.

The expiration of enhanced tax credits would turn a $460/month premium to a $700/month premium for a family of four, said ACA marketplace enrollee Shana Verstegen, during a media call hosted by nonprofit advocacy group Keep Americans Covered. 

She is a small business employee at a gym in Madison, Wisconsin, along with her husband. They rely on ACA marketplace coverage for themselves and their two children.

“Seven hundred dollars per month in 2026 may seem like a small number, but that’s over $2,500 a year. Right now, our family would really struggle with that — losing that tax credit would create a real crisis for us,” Verstegen remarked.

She said she and her husband have discussed the possibility of him leaving the job he has loved for decades to secure employer-based coverage. Not only is this a difficult and emotionally painful decision. It’s also one needing to be under a severe time crunch, Verstegen noted. 

Open enrollment for 2026 ACA coverage is already underway, with deadlines approaching. Enrollment must be completed by mid-December for coverage starting January 1, leaving little time for families like the Verstegens to adjust.

She described this time as a “really tough and, quite frankly, scary” moment for her family.

“This isn’t about politics and polling, or winners and losers in Congress, or red or blue or purple states. It’s about real families and real kids — real people who need healthcare. Marketplace coverage and the premium tax credits are essential for entrepreneurs and small business employees like myself to afford healthcare,” Verstegen declared.

Can hospitals handle another financial hurdle?

About 22 of the 24 million people who have ACA insurance will see their premiums double. If the tax credits expire, and 5 million lose coverage completely, said Charlene MacDonald, executive vice president of public affairs at the Federation of American Hospitals.

When coverage erodes, hospitals’ levels of uncompensated care go up. 

MacDonald said hospitals are bracing for a significant uptick in uncompensated care — especially in states that haven’t expanded Medicaid coverage, as private marketplace plans are an especially critical source of coverage in those areas.

“Hospitals treat all patients who come through their doors regardless of their insurance or their ability to pay — but those costs don’t disappear. They shift back onto hospitals, employers and taxpayers,” she explained.

This strain will affect all healthcare providers. Rural and safety net hospitals will be hurt the most. These providers tend to have lower patient volumes and a greater share of patients on Medicaid and Medicare, both of which reimburse hospitals at a lower rates and often fail to cover the full costs of providing care, MacDonald added.

For many of these vulnerable hospitals, the loss of the ACA tax credits isn’t just another financial hurdle —  it’s a threat to service lines and, in some cases, their long-term viability, she stated.

“When coverage declines, the impact shows in reduced access for patients and diminished capacity in the healthcare system. Hospitals facing higher levels of uncompensated care are forced to make difficult choices to sustain a community’s access to 24/7 care, whether that’s scaling back services or delaying investments that improve quality and access for patients,” MacDonald remarked.

She also noted that higher rates or uncompensated care can reduce hospitals’ ability to offer competitive wages, which exacerbates healthcare’s workforce crisis.

The broader economy could take a hit, too

The expiration of ACA enhanced subsidies could also have a negative effect on the broader economy.

Julio Fuentes, CEO of the Florida Hispanic Chamber of Commerce, warned that the additional healthcare costs from the credit’s expiration could force small business owners to make “decisions that really no one wants to make” — such as delaying hiring, raising customer prices and cutting employee hours.

Even though these small business owners don’t sponsor their employees’ insurance, they often cannot afford to absorb sudden spikes in personal healthcare costs without cutting hours or staff.

“This is a main street crisis. It’s certainly not a Wall Street problem, by no means. The first people who feel this pain are the ones who keep our communities running — you’re talking about the landscapers with five employees, the woman who runs a small cleaning business, the contractor who depends on a handful of subcontractors,” he explained.

Economists estimate that allowing ACA tax credits to expire would lead to about 286,000 job losses, as well as reduce the country’s GDP by $34 billion.

Those estimates come from the Commonwealth Fund and the George Washington University Milken Institute School of Public Health. Their teams first calculated how much federal spending on enhanced ACA tax credits would disappear if the subsidies expired — roughly $26 billion next year alone. 

That reduction in spending affects not only households — but also providers and payers, who would see lower revenues as a result of fewer people being able to afford coverage. About 10% of Americans are employed in the healthcare sector — so putting financial pressure on industry will inevitably lead to a wave of job losses, the researchers explained.

The researchers used an input-output model to estimate the broader effects on the economy — accounting for direct impacts, like providers losing income and laying people off, and indirect effects, such as decreased lifestyle spending by families.  

Time is running out

Some lawmakers, including Senator Bill Cassidy (R-Louisiana), have floated the idea of replacing the ACA premium tax credits with other mechanisms, like pre-funding Health Savings Accounts (HSAs). They are curious as to whether directing funds straight to individuals could increase efficiency and reduce overhead.

“Is there anybody who would not want to take a large portion of that, which we’re using to help Americans purchase healthcare, and give it directly to the individual, so that 100% of its used to purchase healthcare, as opposed to, as opposed to giving that money to the insurance company, of which 20% goes for profit and overhead?” Cassidy, who is chair of the Senate Committee on Health, Education, Labor and Pensions, as during a Monday hearing.

This approach would be impractical, according to Lauren Aronson, executive director of Keep Americans Covered. 

She pointed out that this could cost the federal government more than simply extending the tax credits, and there isn’t enough time to implement a whole new system.

“If you were to theoretically pre-fund an HSA that would very likely cost more federal dollars than the cost of extending the tax credits themselves. You’d have to pre-fund between $1,500 and $6,000 per year. Then thinking about it operationally, plans would have to then refile rates and put new high deductible health plan offerings into the market for 2026 — there’s no time to do that between now and January 1,” Aronson explained.

She said that the ACA’s current design — applying credits directly to monthly premiums — is essential for keeping coverage affordable in real time for middle-class families.

Senators from both parties are forming working groups to address the issue, but there hasn’t yet been a public hearing or vote on extending the ACA premium tax credits, despite the looming healthcare affordability crisis.

Aronson emphasized that immediate action is needed to prevent the crisis from occurring.