Sure, let’s dive right in. So, okay, Republicans, right? Big tax cut party happening with a wild $4 trillion package — that “big beautiful bill” from Trump back in the spotlight on July 4th. Fireworks, anyone? But hey, they kinda left something out (bet they conveniently ignored this one) — a tax break for health insurance premiums didn’t make the cut.
Since 2021, these enhanced premium tax credits have been shaving off the cost of health insurance for folks using the Affordable Care Act marketplace. You could either reduce your premiums upfront or snag those credits at tax time. Sweet, right? But heads up, they’re vanishing after 2025. Poof.
So, here’s the kicker: Like, 22 million people—or 92% of ACA enrollees—got a federal subsidy to drop their insurance premiums this year. And Cynthia Cox, someone from KFF (some health policy research collective), said these people will see a crazy premium hike come Jan. 1. Fun times ahead…
## Big Bucks for Premiums?
Now, picture this: Marketplace users saved about $705 in 2024 thanks to these tax credits. That’s a hefty 44% slice off premium costs—according to a November nugget from the Center on Budget and Policy Priorities. Minus the credits? Expect a sky-high 75% increase in out-of-pocket premiums in 2026. Larry Levitt, the health policy maestro at KFF, dropped this bomb at a webinar.
> “Staggering,” Larry said. Couldn’t have put it better myself.
And oh boy, about 4.2 million Americans might go uninsured over the next decade without these subsidies. Just imagine—it’s in addition to about 12 million losing coverage due to over $1 trillion slashed from Medicaid and ACA in those spending cuts. Because, you know, we all need tighter belts, right?
Larry again, chiming in, calling this cut “the largest rollback of federal health-care support in history.” Let that sink in.
## How’d We Get Here?
Rolling back a bit (no, not literally), these premium tax credits appeared via the ACA for those in the 100%-400% federal poverty range. Then Biden’s American Rescue Plan in 2021 swooped in during the pandemic, bumping up the credits and throwing a wider net—now even folks with incomes over 400% of the poverty threshold could join the club! Plus, they capped out-of-pocket premiums at 8.5% of income. Nice.
And Biden didn’t stop there: Enter the Inflation Reduction Act of 2022, prolonging these goodies till 2025.
## Who’s Hit the Hardest?
Enhanced subsidies have been a game-changer, bringing insurance into reach for many more Americans. From 11 million ACA enrollees in 2020 to a whopping 24 million in 2025.
But when these subsidies vanish, everyone using the premium tax credits feels it, some more than others. They’ve been crucial, especially for Black, Latino, lower-income households, self-employed folks, and small biz owners. They’re the real MVPs here, making healthcare more doable for so many people.
