The uninsured rate remained steady last year, at roughly the lowest level ever recorded. That’s a small miracle — but one that could vanish if lawmakers don’t act soon.
It’s not perfection, but it’s progress. And it’s largely due to a stealth Obamacare expansion that Democrats recently engineered through the tax code.
In laws enacted in 2021 and 2022, President Joe Biden and Democratic lawmakers increased tax credits that Americans could claim for premiums on individual marketplace plans. These measures didn’t receive a ton of media attention at the time, especially relative to sexier programs bundled into the same bills, such as stimulus checks and climate subsidies. But the tax changes nonetheless made a huge difference in access to health care for tens of millions of Americans, and they became an unsung hero of the affordability crisis.
The bigger tax breaks reduced or effectively wiped out the cost of premiums paid for many marketplace plans. Some households were newly able to buy plans that charged zero premiums at all; many others paid a nominal amount. In fact, 4 out of 5 Healthcare.gov customers are eligible to enroll in plans that cost no more than $10 per month, the government recently estimated.
As word about these inexpensive premiums spread, more Americans signed up for marketplace coverage. Federal and state officials have also ramped up their own outreach about marketplace subsidies, which were especially attractive to Americans who would otherwise lose their insurance when pandemic-era Medicaid coverage mandates ended.
The result: In 2023, enrollment in marketplace plans reached a record high. Even better, other government data shows it continued to rise into 2024. An estimated 20.8 million Americans are now enrolled in these plans, nearly double what it was just before Biden took office.
Low-income enrollees have driven nearly all (83 percent) of the growth, KFF data shows. That’s because lower-income households have benefited from both premium subsidies and other programs that reduce out-of-pocket costs.
Unfortunately, all this progress is at risk.
That’s because the expanded premium subsidies are scheduled to expire in December 2025, unless lawmakers intervene to extend them. Lawmakers are expected to haggle over the program at the end of next year, when many other parts of the tax code expire, too. But Congress really ought to act before then because insurers will start pricing and advertising their next set of premiums earlier in the year. And if lawmakers allow the tax credits to sunset as scheduled, health-care premiums will likely spike.
Oddly, this ticking time bomb has gotten little attention in the election thus far, especially compared with other tax-related issues that affect a much narrower slice of voters.
For example, exempting tips from taxation (as both Vice President Kamala Harris and her rival, former president Donald Trump, pledge to do) would benefit about 4 million people. More recently, Harris’s proposal to tax some unrealized capital gains has gobbled up airwaves on Fox and CNBC, even though it would affect a measly 10,000 households.
Meanwhile, nearly 20 million Americans will see their premiums go up if those tax credits lapse as scheduled. Even worse, 4 million people would lose coverage entirely, the Urban Institute estimates. Moreover, those numbers are just snapshots of marketplace participants at a given moment; they don’t capture the entire universe of Americans who have ever needed (or might yet need) marketplace coverage, which often serves as a stopgap between jobs or other health plans. In the past decade, 50 million Americans — about 1 in 7 U.S. residents — have been covered by a marketplace plan at some point, per a new Treasury report.
To her credit, Harris has occasionally talked about the importance of extending these premium supports, even if it’s not what she leads with. Trump has ignored the issue entirely.
But if you want to know what another Trump presidency would foretell, look to his Republican allies in Congress. They say openly they want these subsidies to expire — and therefore, to let premiums spike. In fact, the Republican-run House Budget Committee’s budget last year proposed rolling back the subsidies earlier than scheduled. Since then, proposals to extend the program have been roundly criticized by Sen. Mike Crapo (Idaho) and Rep. Jason T. Smith (Mo.), the lawmakers expected to run tax negotiations next year if Republicans control both chambers of Congress.
Remember this next time Republicans promise to reduce your cost of living. If these lawmakers genuinely cared about Americans’ affordability crisis, they would agree to immediately extend these health-insurance tax credits — or at least propose a serious alternative. They’ve done neither.
