Illustration: Tiffany Herring/Axios
The CBO now projects that extending enhanced ACA subsidies next year would increase the deficit by $335 billion over a decade.
Why it matters: It puts a dollar figure on savings Republicans could claim if they opt to let the premium tax credit subsidies expire next year — and offers a metric if there's a grand bargain pairing a renewal with an extension of 2017 tax cuts that also expire in 2025.
- President Biden and congressional Democrats tout the way the enhanced subsidies have driven record ACA sign-ups at little or no cost for some low-income health exchange customers, and are pushing a permanent extension as one of their health policy goals.
What's inside: The Congressional Budget Office and the Joint Committee on Taxation were responding to a May request for a score from the House Budget and Ways and Means committees.
- 3.4 million more people on average each year are estimated to become insured if the tax credits become permanent, and there would also be an increase in Medicaid and CHIP coverage.
- The estimate stated that more employers would likely change their insurance offerings if the law became permanent, and there would overall likely be a decline in people enrolled in employer-based coverage.
- The annual tax benefit would be $4,350 on average for those who no longer enroll in an employer plan.
- 69% of the subsidy cost would be for those below 400% of the federal poverty limit under a permanent extension. GOP lawmakers have argued against extending the credits to those above the 400% mark, as was done in the American Rescue Plan and extended in the IRA.
- A recent Biden administration final rule that allows DACA recipients to be eligible for the subsidies is projected to cost $9 billion if extensions became permanent, CBO said.
The big picture: Republicans will likely use these figures to make the case that extending the subsidies would negatively affect employer-based coverage and cover people who don't need the financial assistance.
- A recent Paragon Health Institute report also estimated that 5 million people were receiving fully subsidized plans but were not legally qualified for them based on their income, and argued that health insurers were benefitting disproportionately from the program.
