ENHANCED PREMIUM TAX CREDITS: DISABLED WORKER IMPACTS
This week, some members of Congress deliberated on possible mechanisms to extend the enhanced premium tax credits, as a coalition of representatives released bipartisan principles to temporarily extend and reform them. However, there have been no announced votes on these proposals. As the record-long government shutdown enters its 38th day, here are some updates on what’s at stake for disabled workers if enhanced premium tax credits expire.
Access to self-employment is an important driver of health for people with disabilities. Especially when health coverage is typically tied to employment, public health insurance options through the Affordable Care Act have been essential in supporting self-employment for people with disabilities. The enhanced premium tax credits have been a critical resource for disabled self-employed workers and small business owners. People with disabilities have higher rates of unemployment overall, but are more likely to be self-employed than nondisabled workers, based on data from the U.S. Bureau of Labor Statistics. According to analysis from the Center on Budget and Policy Priorities (CBPP), over 5 million ACA enrollees are self-employed (about 1 in 4). A disproportionate share of these enrollees are likely disabled workers. Without affordable health coverage, made possible by the enhanced premium tax credits, disabled workers may be forced to forego coverage as premiums are expected to spike.
Disabled workers are also more likely to work part-time hours than nondisabled workers. These individuals are more likely to be ineligible for health coverage under an employer-sponsored plan, and so they rely on the federal Marketplace for coverage. If ACA plan costs increase in 2026, part-time workers with disabilities will be immediately affected by rising health care costs. As noted by the Center for American Progress, this will have a disproportionate impact on disabled veterans in particular.
The Urban Institute has noted that if the enhanced premium tax credits end, we will see the return of a benefits cliff for those eligible for standard premium tax credits. People with incomes at 400% of the federal poverty level (FPL), or making about $60,000 annually, would be at risk of a large tax liability if their incomes end up exceeding 400% FPL at year’s end. This would have a disproportionate impact on self-employed workers and small business owners, which includes many workers with disabilities. Even a minor income change could lead to a major tax liability for enrollees with the phase-out of enhanced premium tax credits.
Premium Increase Calculator
Right now, states are planning multiple possible scenarios for how to manage their state-run ACA Marketplaces, assuming a deal is cut to end of the government shutdown. If a deal is made, state Marketplaces may need to pause enrollment to update the most accurate premium rates and subsidy calculations for consumers to access affordable coverage. Without Congressional action to extend the Marketplace enhanced premium tax credits, out-of-pocket costs for ACA health insurance plans are going to increase for enrollees. The impacts to states are outlined in a series of Families USA Fact Sheets, which include data snapshots and stories from impacted consumers.
HOW TAX CREDITS HELP REAL PEOPLE.
Stan Clawson, a small business owner and filmmaker from Salt Lake City, Utah, has relied on the Affordable Care Act (ACA) marketplace for coverage since 2012, when he left his university job to focus on his filmmaking career. Paralyzed from the waist down after a rock-climbing fall at age 20, Stan knows how essential affordable health insurance is for people with disabilities.
Stan shared that he is not someone who can afford to be uninsured. His monthly premium is $334.95 thanks to enhanced premium tax credits. Without those credits, his premium would more than double, forcing him to pay an additional $380 each month just to stay insured. The expenses tied to his care are constant: catheters, wheelchair repairs, kidney scans and treatment for infections. “I have to pay to go to the bathroom,” he said, explaining that even with insurance, catheters can cost him $300 a month until his deductible is met. Losing his enhanced tax credits would not only threaten his ability to stay insured but also his livelihood as a small business owner. “Don’t make the Affordable Care Act a political thing,” Stan urged. “Let’s make it better, because health care is a human right.
Feature Story from Families USA
Families USA and Kaiser Family Foundation have compiled tip sheets with recommendations for consumers to consider this Open Enrollment period to be prepared and understand their options. Kaiser Family Foundation (KFF) has also recently updated their calculator where enrollees can estimate their health insurance premiums and subsidies for the upcoming year. This helpful tool uses enrollee family income, location and household size to determine what financial support they’d receive with and without the enhanced premium tax credits. You can also determine an estimate of how much someone’s health coverage would increase if these tax credits aren’t extended. You can use this tool to answer enrollee questions about their current anticipated health coverage costs for 2026. This calculator is part of a suite of resources available from KFF on understanding the health insurance marketplaces, with Spanish resources included. These cost increases may not occur if Congress takes action to extend the enhanced premium tax credits before Open Enrollment ends.
Please Note: If an enrollee signs up for coverage before the enhanced premium tax credits are extended, they can make changes to their plan selection anytime through the end of Open Enrollment on January 15, 2026. However, for changes to take effect on January 1, they would need to be made by December 15.
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