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Middle Class Americans Are Depending on Congress to Extend Premium Tax Credits

By July 15, 2022No Comments

Premium Tax Credits Are Already Means Tested

Next year, millions of Americans will see dramatic increases in their health care costs if Congress fails to extend the enhanced premium tax credits in the American Rescue Plan — and as many as three million people will no longer be able to afford insurance at all. Failure to extend these tax credits would be a devastating blow to middle class families across the country. 

The American Rescue Plan ensured everyone had the option to purchase health care for less than 8.5 percent of their income. Previously, middle class families spent an average of 15 percent of their incomes on health insurance. The subsidies are designed to benefit those who need it most, and they are already means tested, which means the higher your income, the smaller your tax credits become. A family whose health insurance premiums alone — not including deductibles — are less than 8.5 percent of their income receive no tax credits at all. 

If Congress fails to act soon, some families will face increases of more than $30,000 a year. This is unacceptable and entirely preventable, particularly when families are already squeezed by inflation and rising prices. Losing access to premium tax credits would be a catastrophe for the middle class, with adults between the ages of 55 and 64 and Americans with large families facing the largest premium increases. Families are relying on lawmakers to keep their health care coverage affordable. Congress must extend the American Rescue Plan’s enhanced premium tax credits before it’s too late.

How The Premium Tax Credits Benefit Middle Class Families

13 Million Americans Depend On Premium Subsidies. A record breaking 14.5 million Americans enrolled in an ACA marketplace plan in 2021. Right now, nearly 13 million people, or 89 percent with an ACA plan, are receiving enhanced tax credits, making their coverage affordable and accessible.  

Making Coverage More Affordable For Americans. Middle class families used to spend an average of 15 percent of their incomes on health insurance. Now they have the option to purchase health care for less than 8.5 percent of their income. Americans between 55 and 64 receive nearly 45 percent of premium tax credits. Losing access to affordable coverage would be a devastating blow to this group as they prepare for retirement.

Without An Extension Of The American Rescue Plan’s Tax Credits:

  • The average middle class family of four in the U.S. will see an annual premium hike of $6,604.
  • The average middle class couple about to retire will see an annual premium hike of $15,949.