Federal inaction on ACA tax credits will harm both coverage and the economy.

Expiring Tax Credits Could Lead to 340,000 Lost Jobs

October 16, 2025

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You’ve probably heard that the federal government shutdown is linked to an impending big cut in financial assistance for Americans who buy their health insurance through the Affordable Care Act marketplaces. New Commonwealth Fund research out today shows the economic ramifications ([link removed] ) of Congress failing to extend the enhanced premium tax credits that make health plans affordable to millions of people who lack employer coverage and don’t qualify for Medicaid or Medicare.

An analysis by Leighton Ku and colleagues from George Washington University finds that not renewing the enhanced tax credits, set to expire after December 31, will result in:

- state economies shrinking by $40.7 billion, as reduced funding for health care hurts health care providers and related businesses downstream
- the loss of some 339,000 jobs in 2026, as health care providers and vendors are forced to reduce their workforces
- a $2.5 billion drop in state and local tax revenues due to the loss of individual and business income.

According to their economic model, the researchers also find that losses will be greater in states that have more residents enrolled in ACA marketplace plans. Many of these states are ones that haven’t expanded eligibility for Medicaid, so the loss of marketplace coverage is likely to worsen their coverage gaps.

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Affordable, quality health care. For everyone.

The Commonwealth Fund, 1 East 75th Street, New York, NY 10021

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