What’s The Fuss About Enhanced Premium Tax Credits?

Over 600,000 Tennesseans’ health insurance cost will double in January, and a third of them will become uninsured.

Some 265,000 Tennesseans will lose their health coverage in January, if Congress fails to extend expiring tax credits that enable them to afford the monthly premiums.  That is more than one third of the 643,000 Tennesseans who buy their health coverage through the online Marketplace established by the Affordable Care Act (ACA). They are among the 24 million Americans nationwide who buy Marketplace health insurance and are now pawns in the budget battle that has shut down the federal government.  

Families that buy their health insurance through the Marketplace are over the income limit for Medicaid but do not have access to health insurance through their employer. About half are small business owners and employees or are self-employed. Many have pre-existing health conditions.  

90 percent of Marketplace enrollees nationwide get tax credits to lower their monthly premiums. In 2021, Congress enhanced the tax credits to make coverage affordable for more people, but that enhancement expires in December. Although the One Big Beautiful Bill Act enacted in July contained trillions in tax breaks and tax credits for corporations and wealthy taxpayers, Congress failed to extend the premium tax credit enhancements that millions of working- and middle-class taxpayers rely on to buy health insurance.  

If the tax credits expire, Marketplace costs will double. The state’s largest insurer, BlueCrossBlueShield of Tennessee, points out that with an average income in Tennessee of around $36,000 a year, “that cost increase could have a big impact on working families who know every dollar counts.” The company expects the price increase will leave 265,000 Tennesseans uninsured. They will be part of the 4.2 million Americans who are expected to lose coverage when the price shock hits in January. Those who hang onto their coverage will find that the premium increase will make it harder to pay for other necessities, like housing and food. 

You can let your representatives know how this can impact you. Reach out to your congressional representative using TJC’s EPTC Sign-On Letter and share the facts and talking points about how expiring EPTC may affect you or your community.

Written by Jane Dimnwaobi (Equal Justice Works Fellow and Staff Attorney) and Kahwit Tela (Volunteer Communications Specialist)