Proposals to Extend Tax Credits Emerge
Open Enrollment Reminder –This is the last week for consumers to enroll in coverage if they want to be insured for January 1, 2026. The deadline to enroll for January coverage is Monday, December 15th. Open Enrollment continues through January 15, 2026.
Time is running out for Marketplace enrollees who rely on enhanced premium tax credits (ePTCs) to afford their health coverage. Yesterday, the Senate voted on two separate packages* to address healthcare affordability – one that would have extended ePTCs , and another which proposed the creation of new health savings accounts.. Both of these efforts failed largely along party lines. As of now, it would appear that the ePTCs will expire at the end of the year. There is still a chance that Congress could take up the issue in 2026 and make the ePTCs retroactive, but there is no current legislation that would do that.
The impact of expiring tax credits is forcing many people to make hard decisions about their coverage before the new year. In a recent Kaiser Family Foundation survey of Marketplace enrollees, most enrollees will be deciding by December whether to keep, change, or cancel their coverage for 2026:
- 32% are considering switching to another plan
- 25% say they may go without insurance in the new year
- 15% may be pursuing other work options to secure employer-sponsored insurance. This may include many self-employed people with disabilities who are facing a less accommodating job market.
For those considering another plan, this would mean a greater cost-sharing burden in exchange for a lower upfront cost on premiums. Higher deductibles and out-of-pocket costs might become a barrier to using coverage for those that pursue this option. The majority of people surveyed indicated that they were already struggling to afford health care costs with the ePTC, including their premiums. Even an average cost increase of $300/year was considered a financial burden for the majority of respondents who are already cost-burdened to meet their basic needs. These challenging conditions could also increase the number of enrollees who consider the junk plans we covered in last week’s update as comprehensive insurance coverage costs spike.
Despite the uncertainty, the need for coverage through the marketplace is still evident. According to the latest Marketplace Open Enrollment Snapshot from CMS, the report shows that after the 1st month of open enrollment, over 5.7 million people had selected a plan on the marketplace for 2026 coverage. This includes nearly 1 million people who are new to the marketplace. This is around the same amount of plan selections that were made by this time last year. That would suggest that there is still need for coverage through the healthcare marketplace. However, what is unknown is what consumers are doing about the higher premium costs. Many may be selecting cheaper plans in an effort to save money, but that will ultimately result in higher costs for those individuals when they seek care and have to pay more in out-of-pocket costs.
* Healthcare Proposals to Address Expiring ePTCs: Brief Explainer
At the end of the government shutdown, Congress agreed to a December vote to address the extension of enhanced premium tax credits (ePTCs). With just a few weeks until the December 31st ePTC expiration, a few competing proposals were on the table. Two failed Senate votes on December 11th have left consumers without a clear pathway of how healthcare affordablity would be addressed. One proposal called for extending ePTCs for up to three years, maintaining the tax credits at current levels. Rejecting the extension of ePTCs, the other dominant proposal called to replace tax credits with health savings accounts (HSA), to supplement Bronze plans (known for having the highest cost sharing on the Marketplace). Health Affairs outlines the variety of proposals that have been floated in recent weeks offering structural adjustments to plans, as well as extra provisions that could also target Medicare Advantage upcoding For enrollees who have already made the decision to cancel their coverage, an extension of ePTCs would have offered consumers the opportunity to seek out Marketplace coverage before the end of Open Enrollment. Georgetown’s Center for Children and Families warns that “solutions” which result in higher rates of uninsured people would result in a number of negative health outcomes. They warn that simple supplemental savings accounts are insufficient for supporting people’s access to high quality preventative healthcare in particular. A winnable alternative to address affordability has not yet become clear.
As we look ahead, Health Affairs shows that national health expenditures are expected to increase dramatically over the next few years even as coverage rates are in decline. By 2033, health spending will grow to over 20% of GDP. This all points to the need for further reform so that individuals will be able to have fully comprehensive coverage which meets their needs regardless of their health status. Some of the proposals which failed in the Senate yesterday may be revisited in 2026. AAHD urges Congress to ensure that any legislation under consideration should continue to provide affordable, comprehensive coverage that meets the needs of people with disabilities and does not penalize them for the health care needs they have.
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