If Expanded Federal Premium Tax Credits Expire, State Affordability Programs Won’t Be Enough to Stem Widespread Coverage Losses

By Rachel Swindle and Justin Giovannelli

The uninsured rate reached a record low in 2023, in part because of record enrollment in the Affordable Care Act (ACA) marketplaces. The 2021 expansion of federal premium tax credits (PTCs) drove much of these coverage gains, but this critical financial assistance will expire after 2025 unless Congress acts. Meanwhile, states have invested in unique programs that build on the expanded federal subsidies to make coverage even more affordable. These states are deploying a variety of strategies to reduce cost barriers to enrolling in and using health coverage. For example, some states with limited resources have developed highly targeted programs that have lowered cost-sharing burdens and boosted enrollment among eligible but previously unenrolled residents. Other states provide state-subsidized coverage for broader groups of Marketplace enrollees. In a new issue brief for the Commonwealth Fund, CHIR’s Rachel Swindle and Justin Giovannelli explore these state affordability programs in the context of the looming expiration of expanded federal PTCs. The issue brief describes how none of these programs are a substitute for the expanded PTCs and no state will be insulated from coverage losses should the expanded federal credits expire, nor would states be shielded from premium increases as their risk pools worsen.

You can read the full issue brief here.