The Push for Permanent ACA Premium Tax Credits 

In a significant legislative effort to maintain health coverage for millions of Americans, Senators Jeanne Shaheen (D-N.H.) and Tammy Baldwin (D-Wis.) have introduced the Making Health Care More Affordable Act of 2024. This proposed legislation seeks to make the Affordable Care Act (ACA) premium tax credits permanent, a move aimed at reducing healthcare costs and ensuring financial relief for low- and middle-income families. 

The introduction of this bill is timely, as the enhanced tax credits that were expanded under the American Rescue Plan (ARP) are set to expire after 2025. Without congressional action, millions of Americans who have benefited from these credits could face sharp increases in their healthcare premiums.  

The Making Health Care More Affordable Act of 2024: A Closer Look 

The Making Health Care More Affordable Act of 2024 aims to provide long-term financial stability for individuals and families who purchase health insurance through the ACA Marketplace by making premium tax credits a permanent fixture of the healthcare landscape. The ARP passed in 2021, temporarily expanded these tax credits, making healthcare coverage more affordable for a broader range of Americans, particularly those earning more than 400% of the federal poverty level (FPL). 

Before the ARP, ACA premium tax credits were only available to individuals earning between 100% and 400% of the FPL. This left many middle-income families—who often faced exorbitant premiums for ACA coverage—struggling to afford health insurance. The ARP addressed this by expanding eligibility, allowing more families to access subsidies, and increasing the generosity of these credits. 

By making these enhanced tax credits permanent, the proposed bill seeks to ensure that Americans continue to benefit from affordable healthcare coverage, especially in the face of rising healthcare costs. 

Why This Legislation Matters: Key Benefits 

The proposed legislation comes with several key benefits that could reshape healthcare access and affordability for millions of Americans: 

Preventing a Premium Spike 

One of the primary reasons for introducing the Making Health Care More Affordable Act is the impending expiration of the enhanced premium tax credits. Without an extension, millions of Americans could see their premiums skyrocket after 2025. According to the bill’s supporters, families have saved an average of $800 annually on their premiums since the ARP expanded the tax credits. Making these credits permanent would prevent a significant cost burden for households across the country. 

Without the extended credits, millions of low- and middle-income families who have come to rely on reduced healthcare costs could find themselves unable to afford coverage. This is particularly crucial in the current economic climate, where inflation and rising costs of living are putting pressure on household budgets. 

Increasing ACA Enrollment 

The enhanced tax credits have played a major role in boosting ACA enrollment. A 2022 report from the Department of Health and Human Services (HHS) showed that the expanded credits were instrumental in driving a record number of ACA Marketplace signups, with over 14.5 million people enrolling in coverage that year. These subsidies made health insurance affordable for millions of people who would otherwise have been uninsured. 

By making the credits permanent, the bill aims to continue this trend of increased enrollment, thereby reducing the number of uninsured Americans. This is not only beneficial for individual patients, who can access essential care without worrying about prohibitive costs, but it also helps to stabilize the overall healthcare system by spreading risk across a larger pool of insured individuals. 

Supporting Middle-Income Families 

Perhaps one of the most notable impacts of the enhanced tax credits is the relief they have provided to middle-income families, many of whom were previously priced out of the ACA Marketplace. Before the ARP, families earning more than 400% of the FPL were not eligible for subsidies, leaving them to bear the full cost of ACA premiums, which often ran into thousands of dollars per year. 

The Making Health Care More Affordable Act seeks to build on the success of the ARP by making sure that middle-income families continue to have access to affordable health insurance. These families, many of whom were unable to afford healthcare prior to the ARP, would face significant premium hikes without legislative action. 

Ensuring Long-Term Stability 

While the ARP and the Inflation Reduction Act (IRA) of 2022 extended the enhanced tax credits through 2025, the looming expiration date creates uncertainty for millions of Americans. The Making Health Care More Affordable Act would eliminate this uncertainty by permanently securing the credits, providing peace of mind to those who rely on ACA coverage. 

The bill’s sponsors, Senators Shaheen and Baldwin, have both emphasized the importance of long-term affordability. Shaheen stated that “making these credits permanent is essential to ensuring that families don’t see their premiums skyrocket,” while Baldwin echoed the sentiment, saying, “We can lower healthcare costs and continue to help working families get the care they need.” 

What Happens If the Tax Credits Expire? 

If Congress fails to act before 2025, millions of Americans could see their premiums rise dramatically. According to state estimates, more than 40,000 current marketplace enrollees in Colorado, over 55,000 in Washington, and as many as 246,000 in California are likely to drop coverage due to unaffordable premiums if the credits expire. These projections underscore the critical importance of extending the enhanced subsidies. 

The Congressional Budget Office (CBO) has also highlighted the potential negative impact of allowing the tax credits to expire. According to the CBO, the enhanced subsidies have been crucial in improving affordability and increasing enrollment, especially during the COVID-19 pandemic. Without the subsidies, the number of uninsured individuals would likely rise, exacerbating the financial strain on the healthcare system. 

Broader Trends in Healthcare Affordability 

The Making Health Care More Affordable Act is part of a larger trend in healthcare policy aimed at reducing costs and expanding access. Over the past decade, the ACA has played a central role in reshaping the U.S. healthcare system, extending coverage to millions of previously uninsured individuals. The introduction of premium tax credits under the ACA was a major milestone in making health insurance more affordable, particularly for low-income individuals. 

However, challenges remain. Despite the progress made under the ACA and subsequent legislation like the ARP and IRA, healthcare costs in the U.S. continue to rise at a rapid pace. The high cost of prescription drugs, hospital stays, and specialist care still puts a significant financial burden on American families. As a result, policymakers are increasingly focused on finding ways to make healthcare more affordable for all Americans. 

Making the enhanced ACA premium tax credits permanent is one way to address this issue, but it is not a panacea. Continued efforts to address the root causes of high healthcare costs—such as price transparency, prescription drug reform, and improved care coordination—will be essential to achieving long-term affordability. 

What’s Next for the ACA? 

The future of the ACA and its associated programs remains a topic of ongoing debate in Congress. While the Making Health Care More Affordable Act has garnered support from Democrats like Shaheen and Baldwin, it is likely to face opposition from Republicans, who have historically been critical of the ACA’s cost and scope. 

Nevertheless, the expansion of ACA coverage through enhanced tax credits has been widely popular, particularly during the pandemic, when many Americans faced economic hardship. This broad-based support could help build momentum for the new legislation, even in a divided Congress. 

In the coming months, healthcare advocates, policymakers, and industry stakeholders will be watching closely to see how the debate over ACA subsidies unfolds. For now, the Making Health Care More Affordable Act offers a glimpse into one potential future for healthcare in America—one in which affordability and access are front and center. 

The Making Health Care More Affordable Act of 2024 represents a critical step toward securing long-term healthcare affordability for millions of Americans. By making ACA premium tax credits permanent, the legislation would provide financial stability for low- and middle-income families, prevent a spike in healthcare premiums, and continue to drive higher enrollment in the ACA Marketplace. 

As the bill moves through Congress, its success or failure will have significant implications for the future of the ACA and the broader healthcare landscape. With healthcare costs continuing to rise, the need for affordable coverage has never been greater, and the outcome of this legislative effort could shape the direction of American healthcare for years to come.