Sep 26 End of Healthcare Tax Credits Set to Make Big Impact on Cost of Coverage and Increase Uninsured Rate

(September 26, 2025)

Children are more likely to remain insured while their parents are insured, making it essential to advocate for healthcare coverage for both children and their caregivers. Since 2021, Enhanced Premium Tax Credits (ePTC) have reduced monthly insurance premium payments for millions of individuals and families that access marketplace insurance. The ePTC were originally approved by Congress as part of the American Rescue Plan Act and, if Congress does not act, are now set to expire at the end of 2025. The ePTCs increased the total amount of tax credits for lower income earners, while making middle-income earners newly eligible for credits. If the ePTC expires, most Marketplace enrollees will face higher premium costs, including some who are not eligible for subsidies and cost-sharing reductions.

This healthcare focused-issue has become a hot topic during the Federal Fiscal Year 2026 (FFY26) negotiations and has gotten more attention as the deadline to extend the budget is just around the corner. An overwhelming majority of American voters say they are concerned about the rising costs of healthcare, including the impacts of Congress ending the ePTC.

Last week, House Republicans and Democrats both proposed their versions of a continuing resolution (CR) to the government for FY26. A key difference is that the Republican version of the CR did not include any extension of the ePTC whereas Democrats proposed a CR which would extend the Enhanced Premium Tax Credits. Votes on both of these CRs failed in the Senate – this means Congress has only a few working days to pass a budget and avoid a shutdown.

More about the ePTC

The ePTC lowers the cost of healthcare for millions of families who participate in Marketplace Coverage. If Congress fails to extend the premium, an estimated 4.2 million people will lose their coverage and the cost of health insurance could double for more than 20 million others – including caregivers, small business owners, working families, and 50-64 year olds who don’t yet qualify for Medicare. Some working families will see the cost of their health insurance increase by over $8,000 a year. On average, annual out-of-pocket premiums will increase by $760 every year for rural enrollees and climb upwards of $3,000 or more in some rural counties.

The ePTC threat is already impacting underlying healthcare premiums. The majority of insurers already accounted for potential expiration of ePTC in their premium rate increases for the next year: Marketplace insurers must submit their final plan and rate changes to federal officials by mid-August. This will lead to out-of-pocket premiums for Marketplace enrollees increasing by an average of more than 75%: insurers fear healthier participants are likely to drop coverage, which in turn, increases underlying premiums for all participants. According to a KFF analysis of preliminary rate filings, small businesses with Affordable Care Act (ACA)-compliant plans could face a median premium increase of 11% in 2026.

This is a major increase for working families and small business owners, particularly with cost of living skyrocketing across the board. In Pennsylvania, 32,000 are at risk of losing coverage. Along with the changes to Medicaid and SNAP, this would be a big hit for working families.

Eliminating healthcare coverage and taking food away from millions of working families risks making our country sicker and increasing the medical debt of hard-working families and the uncompensated care hospital systems take on.

Overall, families are already facing a cost of living crisis, and ending the ePTC will only make those costs go up. Meeting children and families’ basic needs – such as medical care, mental health services, and nutritional needs – helps them stay healthy enough to work, go to school, and thrive.

In light of the Federal policy changes that will result in coverage losses in Medicaid, CHIP, and Pennsylvania Marketplace Insurance (Pennie), Allies for Children will continue to monitor the local impact to children and families. While many of these policies will more directly impact the caregiver, the result will be inherently intertwined with the child’s access to insurance: Children are more likely to remain insured while their parents are insured. It will be essential to advocate for mitigation of impact to children and families throughout implementation of the new policies over the next several years.

For more information about the ACA Healthcare Tax see:
CBPP, KFF, and Urban Institute

To contact Congress about what the ePTC means to you, visit here: Lower Health Care Costs Action

Cristina Codario, Allies for Children Policy Director