As Affordable Care Act tax credits near expiration, Beshear urges Congress to act
Nearly 100,000 Kentuckians will pay more for health insurance next year when the Affordable Care Act’s tax credits expire at the end of December.
The credits allowed federal funds to subsidize health insurance markets for people who make more than Medicaid recipients but lack a work-sponsored health benefit. Health insurance plans through Kentucky’s marketplace, kynect, are used largely by small business owners, older Americans ineligible for Medicare and rural residents.
A letter signed by Gov. Andy Beshear and seventeen other governors earlier this month urges Congress to take action and extend the credits.
“If they expire, premiums will rise by thousands of dollars for many families, millions will lose coverage, and people will be forced to make impossible choices between paying for healthcare, rent, or groceries,” the letter states.
Without the subsidies, the program’s premiums are expected to “increase dramatically in January,” according to a Sept. 26 news release from Beshear’s office.
Originally introduced by the Affordable Care Act, or Obamacare, the subsidies grew during Covid-19 under former President Joe Biden’s American Rescue Plan Act in 2021 and the Inflation Reduction Act in 2022. Many of those more recent enhanced expansion plans had their premium plans reduced to $0.
“Rising costs for everyday needs are hurting Kentuckians, and I am committed to raising my voice and taking action to help,” Beshear said in a statement. “I believe health care is a basic human right, and we should expand access, not make it more difficult to afford.
“Between the ‘big, ugly bill’ taking aim at our health care system and the threat of these credits expiring, quality health care is going to be out of reach for most families – and that’s just wrong. ”
Predictions show President Donald Trump’s cuts to Medicaid under the One Big, Beautiful Bill Act could take health care away from more than 200,000 Kentuckians.
Dustin Pugel at the Kentucky Center for Economic Policy cautioned that if Congress doesn’t extend the premiums, health insurance rates could go up due to an imbalance between who is paying for care and who is receiving care.
“When the folks who are using less care but still paying in premiums leave, that raises rates for everybody else, because insurance companies have to compensate for that,” Pugel said. “And so it creates a spiral that, you know, we wouldn’t see this year, but we may see in future years.”
Costs have already been rising for hospital stays and doctor’s visits, according to a Peterson-KFF report. It also noted general inflationary pressures, labor costs and specialty prescriptions as factors in the increased rates.
Advocates like Priscilla Easterling, outreach director at Kentucky Voices for Health, think state lawmakers could take on investments to kynect next session if Congress doesn’t extend the subsidies. But ultimately, she hopes for broader access across the nation.
“We’re urging Congress to take action, ideally making those improvements permanent so individuals and families can count on stable, affordable coverage long-term,” Easterling said.
