Democrats demand the CR include an ACA tax credit extension. If the enhanced subsidies expire December 31, 2025, what happens to enrollees earning above 400% FPL (Federal Poverty Level, approximately $63,000 for an individual) who previously qualified under the enhanced credits?

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Democrats demand the CR include an ACA tax credit extension. If the enhanced subsidies expire December 31, 2025, what happens to enrollees earning above 400% FPL (Federal Poverty Level, approximately $63,000 for an individual) who previously qualified under the enhanced credits?

Accepted Answer

The American Rescue Plan Act and Inflation Reduction Act eliminated the 400% FPL cap. This let middle-class families earning above $63,000 (400% FPL for an individual) qualify for subsidies by capping benchmark plan costs at 8.5% of income. When they expire December 31, the "subsidy cliff" returns. Anyone above 400% FPL loses all assistance and must pay full premium costs. KFF estimates marketplace enrollees will see an average 114% premium increase ($1,016 annually). The Congressional Budget Office projects 3.8 million people will lose coverage entirely from 2026 to 2034. Urban Institute estimates 7.3 million will drop coverage, with 4.8 million becoming uninsured. Commonwealth Fund estimates 340,000 job losses in healthcare sectors.

Democrats demand the CR include an ACA tax credit extension. If the enhanced subsidies expire December 31, 2025, what happens to enrollees earning above 400% FPL (Federal Poverty Level, approximately $63,000 for an individual) who previously qualified under the enhanced credits?

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