Texas Needs Congress to Renew Soon-to-Expire Premium Credits

A fair number of times in this column’s history, you’ve seen me come back to Texas’ uninsured rate. It’s on our minds constantly at THA, because it’s the highest in the nation – more than 16%, at last accounting – and because good health coverage and good health care go hand in hand.

John Hawkins, President/CEO, Texas Hospital Association — Hawkins

We’re always looking to get more Texans covered – and preserve anything that’s proven to help that cause. That’s why we’re urging Congress to act by the end of the year to keep a good thing going.

The federal Health Insurance Marketplace now insures nearly 4 million Texans. That number has more than doubled since 2021 – the year that Congress passed enhanced premium tax credits (EPTC) to help enrollees obtain insurance. These enhanced credits – essentially, additional and expanded financial assistance on top of the premium tax credits originally installed as part of the Affordable Care Act – have helped millions obtain insurance not only in Texas, but across the nation.

But at the end of this year – without congressional action – the EPTCs will expire. Disappearing with them will be some of the coverage gains we’ve realized in an increasingly tough post-pandemic landscape. THA is already engaging the Texas congressional delegation to keep that from happening.

Premium tax credits have been an instrumental piece of the ACA since its inception. Data from the Centers for Medicare & Medicaid Services show well over 90% of today’s Marketplace enrollees avail themselves of these credits, both in our state and nationally. Among other qualifications, these long-standing credits cover enrollees in households that make between 100% and 400% of the federal poverty level.

The EPTCs, introduced as part of the American Rescue Plan Act of 2021, expanded financial assistance for currently eligible enrollees. These enhanced credits also are available to patients whose household incomes exclude them from the standard premium credits. Enrollees in households making over 400% of the federal poverty level are now eligible through the enhanced credits, with a cap on their out-of-pocket premiums.

What’s the impact on Texas if the enhanced credits expire this coming Dec. 31? In June, the Kaiser Family Foundation (KFF) examined enhanced premium tax credits while analyzing the results of the One Big Beautiful Bill Act just prior to its passage. Back-of-the-napkin math from KFF’s data indicates that about 1.1 million Texans could lose their insurance by 2034. That includes more than 126,000 enrolled Texans who make over 400% of federal poverty, and therefore wouldn’t have been eligible for premium credits at all prior to the 2021 enhancement. Data last year from the Center on Budget & Policy Priorities showed EPTCs were saving the average enrollee about $700 in 2024. As the American Hospital Association has noted, taking the EPTC savings out of patients’ pockets effectively represents a tax increase.

Clearly, a $700 premium spike isn’t in the best interest of anyone purchasing insurance through the Marketplace – not in any era, and certainly not now. And when more patients become uninsured, that adds weight to our hospitals’ uncompensated care burden, which in turn drives up the cost for everyone else. The expiration of EPTCs could lead to property tax hikes for Texas families and businesses, and higher premiums for enrollees with employer-sponsored coverage.

Our THA advocacy team is continuing our work with congressional lawmakers to stress how much EPTCs have helped mitigate our state’s problems with coverage – and how much we stand to lose if they go away. In a state with almost 5 million uninsured, their continued availability won’t be a silver bullet for our health coverage problems – but it would continue to be a significant help.