Hospitals urge Congress to extend Affordable Care Act tax credits

Hospitals are imploring Congress and President Trump to preserve tax credits that help people buy health insurance on the Affordable Care Act marketplaces.

The enhanced tax credits are slated to expire at the end of the year, and hospitals and healthcare leaders warn that millions of Americans could lose coverage without those tax credits.

The debate over the tax credits has emerged as a key point in congressional negotiations on a new spending bill to avert a partial shutdown of the federal government. Without a deal, the government runs out of money at the end of the month. Democratic leaders in Congress say a spending package must include an extension of the tax credits.

Healthcare leaders say that health insurance premiums are poised to get more expensive this year, and without those tax credits, some working Americans may not be able to afford coverage.

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Hospitals say that if fewer people have coverage, they may end up in emergency rooms with no ability to pay, and with more serious problems that could have been addressed earlier with coverage. They’re also pressing lawmakers to act soon rather than waiting for the end of the year, since many Americans sign up for health insurance in the fall.

Mary Mayhew, president and CEO of the Florida Hospital Association, tells Chief Healthcare Executive® that without the tax credits, over 1 million residents in Florida won’t be able to afford “the skyrocketing increases in their monthly premiums.”

“I'm hoping that we can get through some of the political noise about this and extend those tax credits,” she says. “That's a huge priority for us in Washington right now.” (See more from our conversation in this video.)

Amidst the politics over the Affordable Care Act, often called Obamacare, millions of working Americans buy health insurance on the marketplace, and the tax credits help them purchase coverage.

“The federal marketplace has been transformative for the individuals who are self-employed, for the Mom and Pop pizza shop, the auto body repair shop, where both the owners are able to get their individual coverage through the marketplace and their employees are able to get coverage there,” Mayhew says.

More than 24 million Americans could see higher health insurance premiums without the continuation of the tax credits, Eduardo Conrado, president of the Ascension system, wrote in a Sept. 5 post on the system’s website. With insurance, patients are more likely to get primary care, mental health services and preventive screenings.

“Congress has a choice. Allowing these credits to expire is the same as raising taxes on millions of families while weakening the healthcare system and the communities they serve,” Conrado wrote.

Nicole Stallings, president and CEO of the Hospital & Healthsystem Association of Pennsylvania, estimated that 150,000 residents in the Keystone State would be forced to drop coverage if the tax credits expire. Pennsylvania residents would pay 82% more for premiums, on average, and some would pay twice as much. And that would put the cost out of reach of some residents.

In a letter to Pennsylvania’s congressional delegation, Stallings wrote, “The loss of this assistance will render the cost of health insurance too expensive for many individuals.”

“Cuts to the program mean newly uninsured Pennsylvanians would be sicker and face greater barriers managing chronic conditions,” she wrote.

Chip Kahn, president and CEO of the Federation of American Hospitals, warns that the extension of the tax credits needs to happen, and quickly. Many Americans begin enrolling for coverage in the fall.

"The health security of working families will be threatened if Congress fails to extend the health care tax credits before open enrollment on November 1,” Kahn said in a statement last week. “Premium notices are being sent, and Americans' costs will go up if Congress does not act now. Time is of the essence: protect working families, keep costs down, and extend the health care tax credits."

The vast majority of Americans who purchase insurance on the Affordable Care Act marketplaces benefit from the enhanced tax credits. In 2024, nearly 20 million people obtained insurance on the marketplaces, and 93% of them received the tax credits, according to the Center for Budget and Policy Priorities.

The average enrollee saved a little over $700 due to the tax credits, which was roughly equivalent to a 44% reduction in premium costs, the center found.

The loss of the tax credits would amplify the pain of higher insurance premiums, analysts say. Insurers on the marketplace are seeking a median increase of 18% in 2026, according to a KFF analysis.

New York Gov. Kathy Hochul said that 140,000 residents in her state rely on the tax credits for coverage. Hochul was one of 18 Democratic governors signing a joint letter urging Congress to extend the tax credits.

The Democratic governors said that the loss of the tax credits would be particularly hard on older Americans who don’t yet qualify for Medicare, and those in rural communities who purchase insurance on the marketplaces.

Senate Majority Leader John Thune, R-S.D., told reporters that Republicans are open to looking at the tax credits for the Affordable Care Act, but want to address it after resolving a short-term spending plan, NBC News reported. Sen. Lisa Murkowski, R-Alaska, has proposed extending the enhanced tax credits.

Sen. Tammy Baldwin, a Democrat from Wisconsin, is among a host of Democrats that have been pushing to extend the tax credits. She posted a video on X Tuesday after meeting patients at the Marshfield Medical Center in Weston, Wisc.

“We’re talking about people who will see increases in their premiums if Congress doesn’t urgently act,” Baldwin said. She has also sponsored legislation to make the enhanced credits permanent.

Those earning between 100-150% of the federal poverty level are eligible for a fully subsidized plan. A young adult earning $30,000 pays nothing with the tax credits, but would be forced to pay more than $1,100 if the credits expire, according to KFF’s analysis.

Mayhew says the irony over the debate of extending the tax credits is that they provide a strong incentive for Americans to work. She hopes they won’t be allowed to expire.

“It's completely counterproductive to what Republicans have long advocated for,” Mayhew says. “This is actually the one program that incentivizes individuals to earn more than 100% of federal poverty in order to benefit from that assistance.”