The American Rescue Plan Act enhanced the premium tax credit (PTC) to provide health coverage and premium savings to millions of Americans—but only for 2021 and 2022. With the enhanced PTCs’ expiration set for year’s end, some observers may believe Congress has months to extend them. But that is not the case.
Congress’s real deadline to avoid premium increases and coverage losses is August 2022, or even earlier in some states. That’s because most consumers will make 2023 coverage decisions in 2022. Open enrollment begins November 1, 2022, and preparations begin well in advance. Unless Congress acts, higher rates reflecting a smaller, sicker risk pool will be locked in this summer. Marketplaces are already finalizing eligibility systems and outreach materials to reflect PTC parameters. By summer’s end, they will do the complex work to estimate enrollees’ projected 2023 eligibility and prepare notices showing large premium increases, and those notices would take weeks or months to revise.
Presenting consumers with large premium increases would likely cause many to opt out of coverage for 2023. These losses would be unlikely to be reversed even if the enhanced PTCs were later restored.
Consequently, delaying legislation past August would likely deny many people the benefits of any would-be extension. Delaying will also impose operational costs on the Marketplaces, diverting scarce financial, communications, and information technology resources from other important priorities.