Competing Claims on Who Benefits from ACA Subsidies
The government shutdown is now in its fifth week, and Democrats and Republicans have made no progress on coming to an agreement on the key issue for the impasse: expanded subsidies for Affordable Care Act insurance.
Both sides have made some accurate, but cherry-picked, claims about who gets the subsidies and how the pending expiration of the more generous subsidies will affect people. This week, Director Lori Robertson provides context for these competing claims.
Democrats emphasize thousand-dollar premium increases for middle- or “working-class” Americans, while Republicans say people who are well-off unfairly benefit from the subsidies. Lori explains that while some higher-income earners could get subsidies, if they live in areas with costly insurance premiums, about 95% of those getting subsidies in 2024 earned less than 400% of the poverty level.
And while there are cases where out-of-pocket costs are set to increase by $1,000 or $2,000 a month if the expanded tax credits are allowed to expire as scheduled, the average increase is $1,016 for the year, a 114% rise, according to estimates from the health policy research organization KFF.
The impact of the expiration can vary greatly, depending on age, income, family size and location. Those earning above 400% of poverty (that’s above $84,600 for a couple, $128,600 for a family of four) would experience the high-dollar increases in out-of-pocket costs, because they wouldn’t get any tax credits if the expanded subsidies expire. For those earning under 400% of poverty, the amount they have to pay would still be capped at a percentage of their income — no more than 10% for 2026 — but they’d pay higher percentages than they are paying now.
The expanded ACA subsidies, first passed by Democrats in 2021 as part of pandemic relief legislation, are set to expire at the end of the year.
For more, read the full story, "Competing Claims on Who Benefits from ACA Subsidies."
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