In the aftermath of H.R.1, the budget reconciliation bill which will result in 2.4 million people losing Marketplace health coverage, Marketplace enrollees face another threat to health coverage and health care affordability. The enhanced premium tax credits (ePTCs), which provide lower-income families more help with their Marketplace premiums than the original Affordable Care Act (ACA) premium subsidies, while also helping higher-income families reduce their health insurance premiums, will expire at the end of 2025 unless Congress takes action. Should ePTCs expire, millions of Marketplace enrollees will face higher premiums and 4.2 million people will become uninsured—compounding the coverage losses attributable to H.R.1.
Enhanced Premium Tax Credits Improve Insurance Affordability
The vast majority of Marketplace enrollees—93 percent of enrollees in early 2025—use premium tax credits (PTCs) to pay their health insurance premiums. The ACA makes PTCs available on an income-based sliding scale, with lower-income enrollees receiving more generous subsidies and paying a smaller proportion of their income for marketplace coverage. Under the ACA’s original design, enrollees with family incomes over 400 percent of the federal poverty level (FPL) faced a subsidy cliff, which meant that no matter how high premiums climbed in their local market, these families did not receive help with their health insurance costs. Critics also noted that the ACA’s original PTCs still left many lower-income families facing significant premium expenses and out-of-pocket costs for needed health care.
Under the American Rescue Plan Act (ARPA) of 2021 and the Inflation Reduction Act (IRA) of 2022, Congress adjusted the sliding scale for PTCs—enabling lower-income people to purchase coverage at a lower price point—and extended PTCs to people with incomes over 400 percent of poverty who face premiums of more than 8.5 percent of their income. By addressing both tax credit generosity and the subsidy cliff, these changes resulted in estimated average premium savings of $700 per enrollee in 2024 and dramatic enrollment increases in Marketplace plans. Nearly 22 million individuals were enrolled in Marketplace plans with support from ePTCs at the close of open enrollment in February, 2025—a 125 percent increase over February, 2021, the last year of open enrollment prior to availability of ePTCs.
Beyond providing new and expanded help with Marketplace premiums, enhanced PTCs have held down premiums for all Marketplace enrollees. When help with premiums was less generous, and coverage therefore less affordable, healthier individuals were less likely to purchase coverage, but enhanced PTCs induced these lower-risk and less costly individuals to enroll in Marketplace coverage, thus improving the overall risk pool. Enhanced PTCs, according to one estimate, reduce average total premiums by 5 percent before subsidies are applied, thus also lowering premiums and improving affordability for individuals who do not qualify for premium support.
Affordability and Coverage Will Suffer if Congress does not Extend Enhanced PTCs
The looming expiration of ePTCs, however, threatens these coverage gains. Millions of Marketplace enrollees will face higher premiums and, in some cases, cost-sharing responsibilities, should enhanced PTCs sunset without a change to current law. One estimate suggests that enrollees’ net premium payments will increase by 75 percent, on average, if these tax credits expire; an analysis of states using the federally facilitated Marketplace (i.e., HealthCare.gov) determined that enrollees in 12 states would see their out-of-pocket premium payments more than double without the additional support of enhanced PTCs. Premium increases could be significantly higher, depending on the enrollee’s age, income, and state of residence. On average, premiums for 50-year-old, middle-income enrollees in the second-lowest cost silver plan in West Virginia, for example, could increase by 179 percent. In the face of significant premium increases, Marketplace enrollees will also be less able to afford plans with reduced consumer cost-sharing at the point of service. (See this zip-code level map for more information on likely premium increases.)
In the face of these increased costs, many Marketplace enrollees will go without health insurance altogether. One estimate concludes that the combined effect of enrollment barriers similar to those in H.R.1 and the loss of enhanced tax credits could result in the number of Marketplace enrollees falling by more than 13 million people, or 57 percent of total enrollment. Coverage declines are likely to be largest in states that have not expanded Medicaid eligibility, and among Black and Hispanic enrollees. And while states currently use their own funds to buy-down deductibles, ensure that critical workers can obtain zero-premium coverage, offer additional premium subsidies to young adults, and further reduce premiums for lower-income residents, states may be hard-pressed to fill the gap, particularly when other changes in H.R.1 have created Medicaid financing shortfalls and state revenue reductions.
Takeaway
Enhanced PTCs have made Marketplace coverage more affordable and accessible to millions of low- and moderate-income enrollees, but the looming expiration of these tax credits threatens family budgets and foreshadows dramatic coverage losses. Extending enhanced PTCs is an immediate and impactful step on affordability that policymakers of all persuasions can make a shared priority.