Enhanced premium tax credit expiration would threaten affordable health coverage for nearly 5 million midlife adults

This report examines the importance of enhanced tax credits that lower health insurance premiums for midlife adults ages 50 to 64, sharing findings from an analysis by Avalere Health for the

AARP Public Policy Institute. An interactive data visualization below provides state- and county-level estimates of these midlife adults who will face higher premiums if these credits are

allowed to expire. It concludes that if the enhanced premium tax credits are allowed to expire at the end of 2025: * Nearly 5 million midlife adults ages 50 to 64 will face higher premiums

in 2026 for private insurance through state and federal health insurance Marketplaces. * Middle-income midlife enrollees will see average annual premium increases of more than $4,000 in

2026. * Many midlife adults, unable to afford premium increases, will drop their coverage and become uninsured. Read the full report. PREMIUM TAX CREDITS Starting in 2014, the Affordable

Care Act (ACA) of 2010 made federal tax credits (known as advanced premium tax credits) available that lower health insurance premiums for private nongroup (individual) coverage purchased

through federal and state health insurance Marketplaces. In 2021, the American Rescue Plan Act (ARPA) expanded premium tax credits. The expanded credits covered the full cost of benchmark

silver plan premiums for people with incomes at 100 to 150 percent of the Federal Poverty Level (FPL). The amount of the credit increased for people with incomes up to 400 percent of the FPL

and extended beyond this income range, capping premium costs at 8.5 percent of annual household income for those with incomes above 400 percent of the FPL. The enhanced tax credits were set

to expire after two years, but the Inflation Reduction Act of 2022 extended them through 2025. Midlife adults face premiums in the nongroup (individual) health insurance market up to three

times higher than those for younger adults. With enhanced premium tax credits, a 60-year-old Marketplace enrollee earning 450 percent of the FPL (or $70,425) pays an average annual premium

of $5,760 for silver plan coverage in 2025. Without enhanced premium tax credits, that same individual would have paid $6,893 more in annual premiums (nearly 20 percent of their income).

NEARLY 5 MILLION MIDLIFE ADULTS FACE HIGHER PREMIUMS If enhanced premium tax credits are allowed to expire, most Marketplace enrollees across all ages will face significant premium increases

in 2026. Avalere estimates that 4.8 million adults ages 50 to 64—or 92 percent of the 5.2 million midlife adults projected to enroll in Marketplace coverage in 2026—will face premium

increases. Half of this group, or 2.4 million, have household incomes at 100 to 150 percent of the FPL. Another 38 percent (1.8 million) have incomes at 150 to 400 percent of the FPL.

Roughly 13 percent (600,000) have incomes at 400 to 500 percent of the FPL. The extent of premium increases would vary by income level. Midlife adults with incomes at 100 to 400 percent of

the FPL would face average premium increases ranging from $600 to $1,400 per year to continue their coverage in 2026. Middle-income midlife adults with incomes over 400 percent of the FPL

but who face premiums exceeding 8.5 percent of their annual household income would lose premium assistance altogether. Over half a million midlife enrollees fall into this category and would

see average annual premium increases of about $4,600 in 2026 to continue their coverage. STATE-LEVEL EFFECTS OF THE PREMIUM TAX CREDITS The interactive data visualization above displays

state- and county-level estimates of the number and share of midlife adults who would see premium increases if enhanced tax credits expire, as well as average premium tax credits for

enrollees of all ages if the enhancements continue. Data by income, race/ethnicity, and rurality are included at the state level. In every state, a large share of midlife enrollees would see

these premium increases, according to the Avalere analysis. Midlife enrollees in southern and southeastern states tend to rely on the expanded tax credits the most and would therefore be

hit the hardest by the expiration. For example, 96 percent of enrollees ages 50 to 64 in Texas and Florida rely on the enhanced tax credits and would face premium increases with the

enhancements expiring. Among enrollees ages 50 to 64 living in rural areas, 91 percent (or 680,000) would see premium increases. CONCLUSION A continuation of enhanced premium tax credits

would help ensure that midlife adults are able to continue having access to affordable private health insurance. These enhanced premium tax credits could be preserved through legislation to

extend them or make them permanent.