The American Rescue Plan Act of 2021 increased premium tax credits (PTCs) for Marketplace coverage and extended eligibility for those credits to people with incomes above 400 percent of the federal poverty level (FPL). Consequently, Marketplace enrollment reached a record high during the 2022 open enrollment period, which ended in January. However, these enhancements are set to expire after 2022. Without extension, Marketplace enrollment will most likely fall and the number of people uninsured will increase. In addition, after the public health emergency expires, we previously estimated that more than 14 million people will lose Medicaid coverage. The Marketplace would be the only affordable coverage option for many of those losing Medicaid. So, extending the enhanced PTCs would increase the likelihood that such people will sign up for Marketplace plans, rather than becoming uninsured.
In this brief, we estimate health coverage and costs in 2023 both with and without extension of the American Rescue Plan Act's enhanced PTCs. We find the following:
- If the enhanced PTCs expire, 3.1 million more people will be uninsured.
- If the enhanced PTCs are not extended, individuals and families enrolled in the Marketplaces or other nongroup coverage will pay hundreds of dollars more per person each year in premiums. People eligible for PTCs with incomes between 150 and 400 percent of FPL would pay more than $1,000 more per person for a silver plan. People with incomes above 400 percent of FPL who would lose PTC eligibility would pay roughly $2,000 more per year.
- The non-Hispanic Black population, young adults, and people with incomes between 138 and 400 percent of FPL will experience the largest coverage losses if the enhanced PTCs expire.
- Enhancing PTCs will increase the federal deficit by $305 billion over 10 years.