Millions of Americans Could See Health Insurance Costs Rise, Democrats Warn

Millions of Americans could see their health insurance costs rise unless a new Democrat-sponsored bill is passed.

Under the Affordable Care Act, Americans saw enhanced premium tax credits for Health Insurance Marketplace coverage. The credits were subsequently extended through President Joe Biden‘s Inflation Reduction Act but are set to expire at the end of 2025.

If the credits are no longer in place, more than 20 million would see an increase in their health insurance costs. On top of that, 3 million would lose their health insurance entirely, and about 9 million Americans would pay roughly $400 more for coverage, according to Democratic Senators Jeanne Shaheen of New Hampshire and Tammy Baldwin of Wisconsin.

Shaheen and Baldwin have proposed the Health Care Affordability Act, which would make the enhanced premium tax credits permanent, ensuring a higher level of health care affordability across America.

“For years, the ACA enhanced premium tax credits have significantly lowered costs and increased access to health insurance for families in New Hampshire and across the country,” Shaheen said in a statement.

“But let’s be very clear: if Congress fails to act before these tax credits expire, tens of millions of Americans will suffer a substantial increase in health care costs and millions of individuals could lose their health insurance entirely. It’s time to extend these highly effective tax credits to keep costs from skyrocketing and ensure health care is within reach for every American, and I’m proud that our Health Care Affordability Act does just that.”

Baldwin said the skyrocketing costs of health care and prescription drugs routinely keep families up at night, and the new bill would address that.

“I fought hard to cut health care costs for Wisconsinites – saving thousands of families hundreds of dollars each year – and I refuse to let us go backward,” Baldwin said in a statement. “Our legislation will stop millions of hard-working Americans from having their healthcare costs jacked up, giving families peace of mind that they can get the quality health care they need at a price they can afford.”

Representative Lauren Underwood, an Illinois Democrat, has proposed a nearly identical bill that would also make the credits permanent for Americans.

The ACA’s enhanced tax credits originally increased the value of the tax credits for people with an income between 100 percent and 400 percent of the federal poverty line, while premium tax credits were also expanded to include people with an income above 400 percent of the poverty line.

“The way that the premium tax credits work is when someone applies for insurance through the marketplace, their income will determine how much in premium tax credits they will receive in order to offset the monthly premium for their insurance plan,” Smile Insurance Group CEO Chris Fong told Newsweek.

“If the tax credits go away, the individuals and families who receive these premium tax credits will have to pay the full premium, which would put significant financial strain on them and their families.”

Minority groups might feel the bulk of the impact of losing the credits. With the expanded credits, coverage increased by at least 95 percent for Black and Latino Americans, according to the lawmakers.

So far, the bill has gained wide support among Democrats but could face challenges in getting Republican lawmakers on board.

Many of the new credit expansions have gained popularity with recipients, so there’s likely to be pushback from those who currently receive the benefits if they disappear, said Alex Beene, a financial literacy instructor for the University of Tennessee at Martin.

“With inflation still a major factor in many Americans’ lives, anything that can soften the impact of rising health care costs on their wallets is popular,” Beene told Newsweek. “It’s hard to imagine these won’t be extended in some form.”