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Report: Expiration of Enhanced Premium Tax Credits Sets a Cost Trap for Health Insurance Consumers
FOR IMMEDIATE RELEASE: September 18, 2025
FOR MORE INFORMATION: Jeff Van Ness, (202) 204-7515; jvanness@communityplans.net
REPORT: EXPIRATION OF ENHANCED PREMIUM TAX CREDITS SETS A COST TRAP FOR HEALTH INSURANCE CONSUMERS
“Buying Down” to Cheaper Plans Could Backfire, Leaving Consumers with Higher Out-of-Pocket Costs
WASHINGTON—A new actuarial analysis commissioned by the Association for Community Affiliated Plans (ACAP) reveals that consumers facing higher health insurance premiums when enhanced premium tax credits expire at the end of 2025 could inadvertently increase their total healthcare costs by thousands of dollars if they switch to less-expensive plans.
The study, conducted by Wakely Consulting Group, illustrates how the pending expiration of enhanced premium tax credits (ePTCs) will affect consumers across five geographic markets. The findings challenge the assumption that purchasing cheaper bronze-level plans will provide meaningful financial relief for most consumers.
“This analysis makes clear that the expiration of enhanced premium tax credits would create a lose-lose situation for millions of American families,” added ACAP CEO Margaret A. Murray. “It shows how many consumers will need to choose between paying more upfront, or gambling that they won’t need medical care. That’s a particularly risky bet for people managing chronic conditions. Congress must act to extend these critical affordability protections.”
The analysis provides a stark illustration of the financial risks facing consumers who attempt to mitigate premium increases by buying less-generous coverage. For instance, a 40-year-old San Diego resident with diabetes and earning 138% of the Federal Poverty Level enrolled in a silver plan would face a choice between paying an additional $716 per year to keep similar coverage, or switching to a bronze plan to avoid premium increases. But the study finds that while the bronze plan would maintain the consumer’s $0 monthly premium, their expected cost-sharing would increase by more than $5,000 a year—contributing to a 573% increase in out-of-pocket expenses.
The impacts are even more severe for consumers just above the current income eligibility thresholds for premium tax credits. A 60-year-old resident of Cumberland, Maine with average health and an income at 401% of the Federal Poverty Level enrolled in a gold plan would face $8,000 or more in additional annual costs if enhanced premium tax credits expire, regardless of their plan choice.
The findings underscore the broader healthcare affordability challenges that would emerge if Congress fails to extend enhanced premium tax credits beyond their current December 31, 2025 expiration date. The Congressional Budget Office has estimated that millions of Americans could lose health insurance coverage as a result of the credit expiration.
Beyond individual consumer impacts, the study suggests that the expiration could trigger broader market instability. Researchers noted that healthier consumers are more likely to drop coverage entirely when faced with higher costs, potentially leaving a sicker risk pool and driving further premium increases in subsequent years.
The complete study, with detailed case studies, is available on ACAP’s Web site.
About ACAP
ACAP represents 85 health plans, which collectively provide health coverage to more than 30 million people. Safety Net Health Plans serve their members through Medicaid, Medicare, the Children’s Health Insurance Program (CHIP), the Marketplace and other publicly-sponsored health programs. For more information, visit communityplans.net.