The Affordable Care Act (ACA) offers premium tax credits to help make health insurance more affordable. Under original Affordable Care Act provisions, an income cap for premium tax credits was set at 400 percent of the federal poverty level. Above that threshold, federal financial assistance was not available, creating a “subsidy cliff.”
Enhanced premium tax credits expire at the end of this year. Enrollees currently receiving premium tax credits at any level of income will see their federal assistance decrease or disappear if enhanced premium tax credits expire, with an average increase of 114 percent to what enrollees pay in premiums net of tax credits.
The impact will be greatest for those whose unsubsidized premiums are highest: older Marketplace enrollees and those living in higher-premium locales.