CBO projects spike in uninsured rate if enhanced ACA subsidies expire

The Congressional Budget Office (CBO) has estimated that the expiration of enhanced subsidies for Affordable Care Act plans – which are set to expire in 2026 – could drive up premiums in the individual market and increase the uninsured rate (Source: “Premiums to increase if ACA enhanced subsidies expire, CBO says,” Healthcare Finance, Dec. 11).

In a letter to Sen. Ron Wyden, chairman of the Committee on Finance, the CBO said that not extending the premium tax credit structure provided in the American Rescue Plan Act of 2021 would also increase the number of uninsured Americans.

Without an extension through 2026, the CBO estimates that the number of uninsured people will rise by 2.2 million in 2026, by 3.7 million in 2027 and by 3.8 million, on average, in each year over the period from 2026-2034.

In a letter to the Senate Finance Committee in 2022, the CBO wrote that if the enhanced subsidies on the Affordable Care Act's exchanges were extended on a permanent basis, there would be just shy of five million new signups annually. However, making the subsidies permanent would also increase federal deficits by $247.9 billion from 2023 to 2032 – a result of about $181.4 billion in increased direct spending and decreases in revenue of $66.5 billion over that time.