Leaders of the National Association of Insurance Commissioners (NAIC) are urging Congress to act swiftly to extend enhanced Affordable Care Act (ACA) premium tax credits, which are scheduled to expire at the end of the year.
The NAIC sent a letter to Senate and House leadership warning that, if the tax credits are not extended this month, more than 20 million consumers across the United States will receive notices about significant premium increases.
The Congressional Budget Office projects that the expiration of these tax credits could result in more than 43 million additional uninsured Americans by 2034. NAIC leaders noted that the enhanced tax credits have improved access to health care for millions, especially for those who need the most help affording coverage.
“Failing to extend the enhanced credits beyond the end of this year will have a major impact on the stability and affordability of state health insurance markets,” the NAIC wrote.
The NAIC also pointed out that the effects would reach consumers who do not receive subsidies. In some states, median proposed premium increases are 18%, with four to five percentage points of the rise attributed directly to the expiring tax credits.
The commissioners added that certain states could see even higher increases. They warned that the loss of the credits would likely shrink the risk pool, as younger and healthier consumers may opt out of more expensive coverage.
The letter also addressed potential funding cuts to state reinsurance programs, including those operating under Section 1332 waivers, which are designed to reduce premiums. The NAIC cautioned that the expiration of the credits could prompt some carriers to exit the marketplaces, further impacting coverage options.
In response to the potential loss of federal support, Colorado has enacted a law to provide up to $100 million in state-backed funding to help limit premium hikes in the individual health insurance market if the enhanced ACA tax credits expire.
The measure, signed by Gov. Jared Polis, authorizes the transfer of funds to the state’s Health Insurance Affordability Enterprise, with proceeds coming from the sale of insurance premium and income tax credits. If sales fall short, the state’s general fund will cover the difference.
State officials have indicated that without this intervention, average premiums for individual market plans could rise by 28%, but the reinsurance investment is expected to reduce that increase to about 20%.
Other states, including Washington, California, Maryland, and New Jersey, are also exploring or have implemented similar measures to supplement or stabilize their health insurance markets in response to the possible loss of federal ACA tax credits.
Earlier this month, new legislation was introduced in the House to extend the tax credits through 2026 and maintain current eligibility thresholds. The Senate introduced similar legislation at the beginning of the year, but it remains in committee.
Pennsylvania Republican Rep. Brian Fitzpatrick, who introduced the House bill with New York Democrat Rep. Tom Suozzi, said the measure is intended as a “responsible off-ramp,” not a permanent extension.
“Letting these subsidies expire without a plan would put health coverage out of reach for millions of families in my community and across the country,” Fitzpatrick said. He described the extension as a way to prevent disruption and protect access while Congress works on broader reforms.
Suozzi said that allowing the tax credits to expire would drive up premiums at a time when the cost of living is already rising. “This is too important to wait until the last second to think about solutions,” Suozzi said.
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