A decade ago, the Affordable Care Act (ACA) reformed the American health care system, offering millions of Americans an affordable health insurance option. Today, more than 21 million Americans have enrolled in an ACA Marketplace plan, and the number of people without health insurance has been cut by 42 percent.
The enhanced premium tax credit (PTC) has played a large role in this coverage expansion. Introduced as part of the American Rescue Plan Act in March 2021, enhanced PTCs made ACA insurance more affordable and available by lowering premiums and raising income eligibility thresholds. As a result, 92 percent of Marketplace enrollees qualified for enhanced PTCs in 2024, and an additional 5 million people enrolled.
Yet, the enhanced PTCs are set to expire at the end of 2025. If nothing is done to preserve them, an Urban Institute analysis finds that an additional 4 million people would become uninsured after 2025. The rollback of enhanced PTCs would have wide-ranging implications, particularly for people with low incomes and people of color.
Here, we show how the expiration of the enhanced PTCs would affect people of different income levels, ages, races, and ethnicities nationwide.
Trends emerge when evaluating this legislation by state. In the 10 states that have not expanded Medicaid eligibility to 138 percent of FPL as allowed by the ACA, enhanced PTCs often have an outsized benefit for residents as a larger share of state residents are eligible for Marketplace subsidies. Specifically, in nonexpansion states, people with expected incomes between 100 and 138 percent of FPL are eligible for Marketplace subsidies instead of Medicaid.
Without renewal, nearly 2.5 million people would lose health insurance across states without Medicaid expansion (an increase in uninsurance of 27 percent), and subsidized Marketplace coverage would decline by 50 percent.
Overall, we estimate that allowing enhanced PTCs to expire would increase uninsurance by 16 percent and reduce subsidized Marketplace coverage by 42 percent.
About the Data
This paper uses the Urban Institute’s Health Insurance Policy Simulation Model to analyze the effects of enhanced PTCs on coverage in 2025. The Health Insurance Policy Simulation Model is a microsimulation model of the US health care system focused on the nonelderly population and is designed to estimate the cost and coverage effects of proposed policy changes. The model’s baseline is regularly updated to reflect changes in law, state policies such as Medicaid expansion, premium increases, population growth, general inflation, and the most recently published Medicaid and Marketplace enrollment and costs in each state. We project the model’s baseline to 2025, the final year of enhanced PTCs under current law and the year we expect to find their largest impact. Our estimates for 2025 under enhanced PTCs assume Marketplace coverage will be at similar levels to coverage in 2024.
The "Additional races and ethnicities" group includes people who identify as American Indian or Alaska Native, Asian, Pacific Islander, or a group not otherwise named in the survey. In most states, it is difficult to reliably estimate potential changes for these groups because of small sample sizes. All values are rounded to the nearest thousand. If the number of people without insurance or covered by Marketplace plans changes by 1,000 or less, we display the data as "< 1,000 change."
For a more complete methodology, see “Who Benefits from Enhanced Premium Tax Credits in the Marketplace?.” Although the granularity of results reported in this interactive graphic differs from that paper, both research products use the same policy simulation.
View the project on Github.
Additional Reading
- Who Benefits from Enhanced Premium Tax Credits in the Marketplace?
- The Impact of Enhanced Premium Tax Credits on Coverage by Race and Ethnicity
- Enhanced PTCs Help Older Adults and Those in High-Premium States Afford Coverage
- The Health Insurance Policy Simulation Model
- How Well-Targeted Are the American Rescue Plan Act’s Premium Tax Credits?
Project Credits
This data tool was funded by the Robert Wood Johnson Foundation. We are grateful to them and to all our funders, who make it possible for Urban to advance its mission. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. Funders do not determine research findings or the insights and recommendations of our experts. More information on our funding principles is available here. Read our terms of service here.
RESEARCH Jameson Carter, Michael Simpson, Matthew Buettgens, and Jessica Banthin
DESIGN Christina Baird
DATA VISUALIZATION AND DEVELOPMENT Mitchell Thorson
EDITING Sarah LaCorte
WRITING Wesley Jenkins
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