Enhanced Premium Tax Credits and Why They Matter
On Wednesday, I joined business leaders and healthcare providers for a panel discussion hosted by ChamberRVA about the impacts that the expiring enhanced premium tax credits will impact individuals, businesses, the entire healthcare system, and Virginia’s economy.
Established as a part of the Affordable Care Act, premium tax credits (PTCs) are a form of financial assistance that lowers monthly premiums for Americans making between 100-400% of the federal poverty level. During the COVID pandemic, this program was expanded in the form of enhanced premium tax credits (EPTCs) through the Biden-Harris Inflation Reduction Act, allowing individuals making above 400% of the federal poverty level to qualify also for assistance through the end of 2025.
The EPTCs, provided through the insurance marketplace, have benefitted families and businesses alike, expanding the number of affordable coverage options for individuals and providing small businesses with more cost-effective insurance coverage opportunities for their employees. When businesses are able to provide key benefits such as health insurance, they are better positioned to attract and retain a skilled, qualified, and dedicated workforce. Additionally, healthcare costs go down for everyone: quality health insurance ensures that preventive care and treatment are delivered, fewer patients arrive with threatening conditions in already-overburdened emergency rooms, and children receive essential immunization, early intervention for developmental needs, and dental care.
Regrettably, without Congressional action, the Enhanced Premium Tax Credits are scheduled to expire, and the Republican-led Congress and Donald Trump demonstrate no inclination to reauthorize this essential coverage that impacts millions and that supports small businesses.
As data demonstrates, 93% of Americans enrolled through the marketplace relied on EPTCs to make their healthcare coverage more affordable in 2024, including 350,000 Virginians. Without EPTC, costs for eligible enrollees will spike by 25 percent to 100 percent. In Congressional District 04, which covers much of Chesterfield County and the City of Richmond, a 60 year old couple earning $82,800 a year will likely see their annual premiums increase by $12,196 without EPTCs. This increase represents an additional $1016.33 a month. Without urgent Congressional action, these steep spikes will effectively put health insurance out of reach for millions of Americans; four million people would likely become uninsured. The end result? Untreated chronic diseases, increases in preventable disease, profound impacts on emergency departments and our entire healthcare system.
Without reauthorization, families will face challenging decisions about whether they pay for health insurance, or their mortgage/rent and food for their children. Our healthcare system is already facing catastrophic threats from the Trump Administration’s cuts to vital programs that are meant to keep Americans healthy, including Medicaid, Medicare, SNAP, rural health funding, and reproductive healthcare services.
Open enrollment for Virginia’s health insurance exchange program begins in 81 days; without federal action, families will feel considerable strain on their wallets. Our federal representatives must act and reauthorize the enhanced premium tax credits to benefit Virginia’s families, our businesses, and our communities.
