Millions will lose health coverage if ACA subsidies expire: CBO

A new report released by the Congressional Budget Office (CBO) found that if the Affordable Care Act’s (ACA) extended subsidies are allowed to expire at the end of 2025, millions of people will become uninsured and premiums will rise.

Responding to the Senate Finance Committee, the CBO found that “not extending the credit will increase the number of people without health insurance and raise the average gross benchmark premiums for plans purchased through the marketplaces.”

The extended tax subsidies were first enacted in 2021 through the American Rescue Plan Act (ARPA) and extended to the end of 2025 through the Inflation Reduction Act. The premium tax credits lower out-of-pocket costs for eligible households.

“Without a permanent extension, CBO estimates, the number of uninsured people will rise by 2.2 million in 2026, by 3.7 million in 2027, and by 3.8 million, on average, in each year over the 2026-2034 period,” the report states.

The CBO estimate for 2026 was somewhat lower as the office assumed some people would stay on due to automatic renewals and needing more time to respond to the expired tax subsidies.

The report also projected that gross benchmark premiums will rise by 4.3 percent in 2026 if the subsidies expire, rising by an average of 7.9 percent between 2026 and 2034.

With the Republicans Party set to hold a trifecta of power beginning next year, the extended tax subsidies are unlikely to be renewed before the end of 2025. The CBO has previously estimated it would cost $335 billion over 10 years if the subsidies were made permanent.

Still, Democrats are endeavoring to preserve the provisions, privately offering Republicans a deal for a one-year extension of the subsidies Thursday night, according to The Washington Post.