Congress Must Make Permanent the ACA Enhanced Tax Credits

May 10, 2024

Having affordable and comprehensive health insurance coverage is a key determinant for surviving cancer. Research from the American Cancer Society shows that uninsured Americans are less likely to get screened for cancer and thus are more likely to have their cancer diagnosed at an advanced stage when survival is less likely and the cost of care more expensive. Public policies that make insurance more affordable help to ensure that more people will have the coverage they need.

The Affordable Care Act (ACA) established tax credits to help lower the cost of health insurance purchased in the Marketplaces. Under the ACA, individuals earning between 100% to 400% of the federal poverty level (FPL) are eligible for these tax credits on a sliding scale – the lower the income level, the higher the amount of tax credits. The total amount a person would pay for premiums is capped as a percentage of their income. The ACA tax credits are permanent and do not expire.

As part of the American Rescue Plan Act (ARA) enacted in March 2021, Congress made two temporary, but major changes to the tax credits: it increased the amount of the tax credit for those between 133%-400% FPL; and extended the eligibility for the tax credits to those earning beyond 400% FPL. These enhanced tax credits were in effect in 2021 and 2022. As part of the Inflation Reduction Act (IRA), Congress extended these enhanced tax credits again, this time through 2025.