1.7 Million Texans at Risk of Losing Health Coverage: The Impact of Expiring Tax Credits and GOP Megabill Changes to the ACA

Recent changes to the Affordable Care Act (ACA) could leave as many as 1.7 million Texans without health insurance. This is a significant concern for a state already struggling with the highest uninsured rate in the country.

This year, nearly 4 million Texans signed up for ACA health plans, which is a record. But this number may soon drop due to the end of enhanced premium tax credits and new rules set by recent legislation. Health experts warn that this could lead to higher premiums and strain on hospitals.

Because Texas chose not to expand Medicaid, the ACA has been vital for many low-income residents. A report shows that the uninsured rate in Texas dropped from 23.7% in 2010 to 17.4% in 2023, with ACA enrollment playing a significant role.

Out of the 4 million enrollees, about 2.5 million earn between 100% and 150% of the federal poverty level. For a family of four, that’s roughly between $32,150 and $48,225. In expansion states, individuals earning up to 138% of the poverty level qualify for Medicaid, but in Texas, these individuals rely mainly on the ACA.

Cynthia Cox from the Kaiser Family Foundation (KFF) notes that the upcoming changes may lead to the largest coverage loss since the ACA was introduced. “I think back to the Great Recession when many lost their jobs and, consequently, their health insurance,” she states. “This situation could be much worse.”

New bureaucratic steps could make enrolling in ACA coverage more complicated. The recent bill requires more income documentation, shortens the open enrollment period to just one month, and prevents specific immigrants from gaining ACA coverage. This will affect about 95% of Texans who depend on marketplace coverage.

While Republicans argue that these changes will eliminate fraud in the ACA system, healthcare advocates warn this could lead to worse health outcomes for many. Lynn Cowles, from Every Texan, asserts, “The changes are designed to push people out of these programs, making the entire system less effective.”

Interestingly, much of the potential coverage loss stems not from added provisions but from what’s being removed. Enhanced premium tax credits, which lowered monthly costs for many enrollees, are set to expire at the end of 2025. Experts from the Center for Budget and Policy Priorities predict that if these credits go away, many individuals could see their monthly premiums rise dramatically. For example, someone earning $22,000 a year could see their premium jump from $0 to $63.

Furthermore, a report predicts that over 1.1 million Texans could lose coverage if these tax credits expire. While some Republican senators might entertain extending these credits, significant legislative hurdles remain.

As premiums become increasingly unaffordable, many healthy individuals may drop their coverage, leading to higher risks for insurance companies. This would create a vicious cycle: as more people leave the ACA marketplace, insurers will raise premiums to cover the increasing risks, making it even harder for individuals to maintain their coverage.

Blue Cross Blue Shield of Texas, the state’s largest insurer, has proposed a 21% increase in rates for ACA-compliant plans next year. This trend reflects the ongoing challenges people in Texas face regarding affordable healthcare options.

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