Including a permanent extension of the Affordable Care Act (ACA) marketplace enhanced premium tax credits in this month’s must-pass funding legislation is projected to reduce gross premiums and increase the number of people with health insurance by millions, at the cost of about $350 billion to the federal deficit over the next decade.
That’s according to a newly released analysis from the nonpartisan Congressional Budget Office (CBO) requested by Democrats and published Thursday.
The office’s projections—which also included tallies around repealing summer rulemaking and One Big, Beautiful Bill changes—note that gross premium reductions, coverage and federal government costs for 2026 would be lower if such a change comes later than Sept. 30, as open enrollment and plan selections are ongoing.
The estimate comes shortly after Republican representatives in the House released a seven-week funding extension that does not address the enhanced premiums enacted during COVID and scheduled to expire at the end of the year.
In comments to the press, party leaders have suggested the tax credits should be addressed closer to their end-of-year deadline. Democrats, meanwhile, are threatening to withhold Senate votes needed by the end of the month to avoid a government shutdown amid demands to extend the enhanced premiums and roll back summer health spending cuts.
“Today’s CBO report only crystalizes what Democrats have warned if Republicans let the ACA tax credits expire—millions of Americans will have significantly worse and more expensive healthcare coverage or be kicked off their plans entirely,” Senate Minority Leader Chuck Schumer, D-N.Y., said in a release. “As millions of Americans prepare for their health insurance costs to go through the roof, Senate Republicans turn to deeper cuts to the ACA marketplace, making it harder to get health insurance and more expensive to keep it.”
According to the CBO, permanently expanding marketplace premium tax credits by Sept. 30 would increase the number of people with health insurance by 3.6 million in 2030 and 3.8 million by 2035.
Gross premiums (total policyholder cost) for benchmark marketplace plans would be an average 7.6% lower each year from 2026 through 2035 due to “the expectation that people enrolling in the marketplaces would be healthier on average if the expanded premium tax credit were extended.” That said, gross premiums for 2026 would only be 2.4% lower, reflecting a 50% chance that insurers had already set their premiums for the coming year.
The CBO’s estimates on coverage impacts are more conservative than those released Wednesday by the Urban Institute and the Commonwealth Fund.
The private research groups’ analysis projects 4.8 million more people would go uninsured in 2026 should the enhanced premiums be allowed to expire as compared to the alternative, with non-Hispanic Black people, non-Hispanic white people and young adults more heavily affected. It also estimated 7.3 million fewer people would receive subsidized coverage in the coming year.
Further, the groups projected average net premiums (what’s paid by the beneficiaries) would increase for those currently receiving subsidized marketplace coverage. Specifically, enrollees with incomes below 250% of the federal poverty level would see increases from $169 to $919, those with incomes between 250% and 400% would rise from $1,171 to $2,455, and those with incomes over 400% would go from $4,436 to paying a full net premium of $8,471 on average.
“Even those not eligible for [premium tax credits] see lower premiums with enhanced [premium tax credits] because the additional enrollment has improved the nongroup market risk pool,” the report’s authors wrote. “If Congress does not extend enhanced [premium tax credits], we project that these gains will be reversed, and 4.8 million people will become uninsured in 2026.”
Healthcare industry groups widely back an extension of the subsidies.
America’s Health Insurance Plans (AHIP), in a Sept. 18 release, highlighted an AARP analysis from earlier this month estimating 4.8 million adults aged 50 to 64 would face higher premiums without an extension and warned that a sudden spike could push many out of their coverage.
”Congress must act as quickly as possible to prevent these steep health care cost increases from making health care coverage unaffordable for millions of middle-income Americans,” AHIP wrote.
The American Hospital Association recently listed the expiring subsidies among its leading legislative priorities, warning in a notice that projected coverage reductions “would put considerable financial stress on hospitals, health systems and other providers, which will face more uncompensated care and bad debt. This, in turn, would make it difficult for them to maintain services in their communities.”