How the loss of ACA tax credits would impact Texas
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Texas could be the hardest hit state if Affordable Care Act (ACA) enhanced tax credits, which are the main sticking point of the ongoing federal government shutdown, expire at the end of the year.
Why it matters: Texas has the nation's highest rate of people without health insurance. Health policy experts warn that without the tax credits, the rate will likely rise even further after having fallen in recent years.
The big picture: Republicans want to end the tax credits. Democrats want to extend them, at an estimated cost of $350 billion over 10 years, per the Congressional Budget Office.
Driving the news: Open enrollment for ACA coverage begins Nov. 1 and runs through Dec. 15.
Context: Enhanced premium tax credits were introduced under the American Rescue Plan Act of 2021. The Inflation Reduction Act of 2022 extended them through this year.
- They proved popular even among Republicans, who considered extending the subsidies before the shutdown.
State of play: Because Texas has not expanded Medicaid, many low-income adults have marketplace coverage, Lynn Cowles, director of health and food justice at the nonprofit Every Texan, told reporters at a briefing this week hosted by the Commonwealth Fund.
- The state has also seen record marketplace enrollment in recent years, with signups more than tripling since 2020, per KFF — the highest enrollment growth of any state during that time.
- Health policy experts say that enrollment growth has helped reduce the state's uninsured rate. In 2020, nearly 20% of Texans under 65 were uninsured, compared to 18.6% in 2023, per the Census Bureau.
Zoom in: In Bexar County, enrollment grew 165% from 2015 to 2025, per figures Cowles provided. Nearly 250,000 people in Bexar County now have marketplace coverage.
By the numbers: More than 1 million Texans stand to lose health coverage if the tax credits expire and coverage grows more expensive, Cowles said. Texas accounts for more than a quarter of all coverage losses anticipated across the U.S.
- Premiums for the average family would increase by about $2,000 per year for more than 3 million Texans who rely on the tax credits, Cowles added.
Zoom out: About 23 million Americans are enrolled in insurance through the marketplace, and more than 90% of them receive help from the federal tax credit, Justin Giovannelli, associate research professor at the Center on Health Insurance Reforms at Georgetown University, told reporters.
- Meanwhile, median insurance premiums are set to rise by about 18% next year, the biggest increase since 2018, he added.
What they're saying: When people have health insurance, "that really stabilizes not only people's individual and family household finances, without the threat of major, major medical debt, but also our health care sector in general," Cowles said.