Bicameral Bill Would Make ACA Premium Tax Credits Permanent

WASHINGTON — Democratic lawmakers in the House and Senate on Wednesday introduced a bill that would make tax credits on insurance premiums, first offered under the Affordable Care Act, permanent, saying they hope it’ll be one of the so-called “tax extenders” Congress considers during the post-election lame duck session.

The premium tax credit — also known as PTC — is a refundable credit that helps eligible individuals and families with low or moderate incomes cover the premiums for their health insurance.

The American Rescue Plan Act of 2021 temporarily expanded eligibility for the premium tax credit by eliminating the rule that a taxpayer with household income above 400% of the federal poverty line cannot qualify for a premium tax credit.

Right now, the enhanced tax credits are set to expire at the end of 2025 unless Congress acts.

If this happens, congressional Democrats warn, over 20 million Americans will see a sudden increase in their health insurance costs, and an estimated 3 million Americans could lose their health insurance entirely.

But Sens. Jeanne Shaheen, D-N.H., and Tammy Baldwin, D-Wis., and Rep. Lauren Underwood, D-Ill., sponsors, in their respective chambers, of the Health Care Affordability Act, are hoping to prevent that from happening.

“Our bicameral bill would make the tax credits more generous for those who are already receiving them, and it would expand eligibility to consumers with incomes over 400% of the federal poverty level,” said Shaheen during a press conference on Wednesday afternoon.

“We extended these tax credits in the American Rescue plan, and extended them again, in the Inflation Reduction Act, through December 2024, but in order to give insurers the ability to set their rates for next year, we need to get this done as quickly as possible, and certainly no later than the first quarter of next year,” she said.

“In essence, that means we need to get this done now,” she continued. “Medical costs are the top cause of bankruptcy, and we’ve got to do more to help people like Nancy Glynn, my constituent from Sutton, New Hampshire. 

“Nancy was a self-employed independent contractor. She couldn’t afford to purchase health insurance because the premiums were just too expensive. So for four years, she never went to the doctor, even though she knew there was something wrong. 

“Finally, she got a job, which would give her health insurance, and she was able to go see a doctor and discovered that she’s got type 2 diabetes,” Shaheen said. “Because she finally got the care that she desperately needed, her diabetes is now under control. She’s lost 80 pounds. She can keep up with her 10-year-old son, Hunter, and she’s spending more time with her family, living a better, healthier life.

“If we fail to extend these tax credits, families like Nancy’s will be faced with impossible questions like, ‘Do I postpone needed care because it’s too expensive?’ ‘Do I skip refilling my prescription because I can’t afford it?’ ‘Do I get that MRI or mammogram or other tests or do I just hope that my health care issues go away?’ Sadly, these aren’t hypotheticals. These are the challenges that millions could face if we let these tax credits expire,” Shaheen said.

Underwood, who represents a district in northern Illinois, said it has been her mission to lower families’ out-of-pocket health care costs since her first day in Congress in January 2019.

“That’s why I introduced the Healthcare Affordability Act in 2019 and I fought so hard to get a short-term version of it signed into law,” she said. “Because of this legislation, more Americans than ever before had access to quality, affordable health care through their marketplace plans. 

“And because this legislation was signed as part of the American Rescue Plan and later extended in the Inflation Reduction Act, we’ve seen the record-breaking expansion of enrollment. In fact, earlier this month, we crossed 50 million Americans who have enrolled. That’s one in seven Americans who have benefited, who now have quality, affordable health care — and four out of five enrollees for $10 a month,” Underwood said.

“This legislation works. It’s lowering costs, and it’s bringing the peace of mind that comes from quality care to millions of people, and now we have to make these savings permanent,” she continued.

“Let me be clear, these savings are a difference between families having coverage and going without it,” she said. “It’s about making sure that families don’t have to worry about their wallets when they get sick and their kids are given an opportunity to live healthy and full lives. It’s about creating an America where health care coverage is accessible and it’s affordable for everybody, regardless of where you come from.

“If we don’t act now to extend these savings, families will see sharp and harmful premium increases, and the progress that we’ve made will be lost,” Underwood continued, adding that in addition to relieving the burden on families who previously paid exorbitant premiums, the tax credits have also been a crucial tool in promoting health equity.

“The uninsured rate for Black and Hispanic adults has long been disproportionately higher than the rate for White adults, but this reality is changing thanks to the tax credits,” she said. “Rural communities like those in parts of my district have seen an explosion in coverage as these savings have made quality health care affordable. 

“We can’t just pull the rug from under these families. Fundamentally, health care is a human right, and right now we have an opportunity to meet the moment and make high quality care affordable and accessible for all,” Underwood said.

Senate Majority Leader Chuck Schumer, D-N.Y., said a recent study found that one in seven Americans have taken advantage of the premium tax credits at some point in the past decade.

“This is not a niche market. This is not just some small group — not that I’m against any small groups,” Schumer said. “This is a major part of our health care system that ensures everyone has access to health care. We have made great progress in health care, ever since President Obama. … We don’t want to move backward.”

To illustrate what’s at stake if the tax credits aren’t extended, Schumer offered the example of a 60-year-old couple in Ohio jointly earning $80,000 a year.

According to Schumer, the couple currently pays $566 a month to cover two people on the average plan. 

“If the tax credits expire, instead of paying $566 a month, they’ll have to pay $1,850 a month on the same plan,” he said. “What are people like that supposed to do? They don’t have millions of dollars, or billions of dollars, like these people who tend to fund the Republican super PACs.

“These are Black and Hispanic Americans who for too long have had to contend with the worst health care in our country,” he continued. “Since the ACA the uninsured rate among Black Americans and Hispanic Americans has been cut just about in half. 

“This year, 5 million Hispanic Americans, two million Black Americans, 2.5 million Asian Americans, and 200,000 Native Americans took advantage of these tax credits to buy coverage. So this should be a no-brainer. Whether it’s us personally, a family member or a close friend, I doubt there are many Americans who don’t know someone who’s benefited from these credits if they haven’t benefited themselves,” Schumer said.

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