Delaware Leads States in Urging Congress to Extend Health Care Subsidies

Delaware is spearheading a coalition of over a dozen states advocating for the preservation of enhanced health care subsidies linked to the Affordable Care Act (ACA). These crucial premium tax credits are scheduled to expire at the end of 2025, potentially jeopardizing access to affordable health insurance for millions across the United States.

In a letter addressed to congressional leaders from both parties, Delaware Governor Matt Meyer emphasized the dire consequences of allowing these subsidies to lapse. “In Delaware, thousands of our neighbors are projected to lose the subsidies that keep their health care within reach, with many unable to find a new plan at all,” he stated at a recent news conference. Meyer underscored the broader economic implications, noting that families often have to make difficult choices between essential needs such as housing and groceries.

According to the Urban Institute, a think tank based in Washington, D.C., the enhanced tax credits have been critical in making health insurance more affordable. By raising the income eligibility threshold to households earning over 400% of the federal poverty level, the ACA enabled more than 21 million Americans to enroll in marketplace plans. Without an extension of these subsidies, average premiums could surge by over 75%, with some rural areas facing increases nearing 90%. This equates to an average additional cost of approximately $700 per year for consumers.

In Delaware alone, over 16,000 residents could lose their subsidies, with about 5,000 at risk of losing their coverage entirely. Deputy Insurance Commissioner Tanisha Merced highlighted that nearly 46,000 of the state’s more than 50,000 ACA enrollees rely on these tax credits, which have lowered their monthly premiums by an average of $538, translating to over $6,400 annually.

Meyer warned that the loss of these subsidies would adversely affect the state’s health insurance market, particularly impacting younger and healthier residents. This shift would likely worsen risk pools, thereby driving premiums higher for older populations, especially those aged 55 to 64 who are not yet eligible for Medicare.

The debate over these subsidies is intensifying as Congress grapples with budget negotiations. The current focus is on a short-term funding solution, but disagreements over the future of tax credits could lead to a government shutdown by the end of September. House Republicans have introduced a stopgap bill that would temporarily fund the government through November 21, but it is unclear whether it will gain sufficient support.

The ACA, enacted in 2010, allowed Americans to access subsidies for more affordable insurance. Enhanced tax credits were introduced in 2021 to mitigate the economic impact of the COVID-19 pandemic. Initially set to expire at the end of 2022, these credits were extended through the Inflation Reduction Act, as noted by health policy nonprofit KFF.

Democrats are advocating for the enhanced subsidies to be included in the upcoming stopgap bill. A competing proposal suggests extending funding until October 31, making the enhanced premium tax credits permanent while also reversing Medicaid cuts and restoring funding for public broadcasting.

“ACA tax credits must be expanded,” stated Senate Minority Leader Chuck Schumer of New York. He emphasized the critical nature of these subsidies, not only in terms of financial support but also for preserving lives if they were to expire.

While Congresswoman Sarah McBride and Senators Lisa Blunt Rochester and Chris Coons did not provide comments for this article, Coons recently articulated a desire for bipartisan cooperation to ensure the government remains operational and to address rising health care costs.

As Delaware prepares for open enrollment beginning on November 1, the Delaware Department of Insurance has already reported premium increases for the upcoming year, with rates for marketplace insurers ranging from 25% to 35%.

The situation underscores the urgent need for congressional action to secure affordable health care for millions of Americans, as the future of these subsidies hangs in the balance.