Facing ACA credit expiration: How providers can tackle coverage and cost pressures
Last week, a Congressional hearing titled “Making health care affordable again: Healing a broken system,” placed affordability at the center of the national health care debate. Lawmakers, industry leaders and patient advocates gathered to address the urgent challenges facing millions of Americans—chief among them, the looming expiration of enhanced Affordable Care Act (ACA) tax credits and the broader need for systemic reform.
The ACA fundamentally reshaped U.S. health coverage by making premiums more affordable for millions through advance premium tax credits (APTCs). Enhanced APTCs, introduced under the American Rescue Plan and extended by the Inflation Reduction Act, are set to expire at the end of 2025 unless Congress intervenes. This policy crossroads carries enormous implications for consumers, insurers and health care providers.
Renewing these credits could cost an estimated $350 billion over the next decade, but letting them lapse risks a surge in uninsured rates and premium spikes. Nearly 24 million people are enrolled in ACA marketplace plans in 2025, double the number in 2020, and 93% rely on APTCs to keep coverage affordable. If enhanced credits disappear, affordability could collapse for millions, especially those with lower incomes.
Enhanced APTCs work by sending government payments directly to insurance companies to lower monthly premiums for eligible households, but insurers themselves set the underlying premium rates. As the enhanced credits expire, costs for many will spike as families lose subsidy support. And, regardless of the credits, premiums are rising sharply: insurers project an 18% increase for 2025, driven by inflation, labor costs, expensive drugs, and a shifting risk pool as healthier enrollees exit the exchanges.
For providers, the ripple effects could be profound. Hospitals and health systems, especially those serving rural areas, could see higher uncompensated care, deteriorating payer mix and rising bad debt as more patients lose coverage. Operational pressures will intensify as patient volumes shift unpredictably, compounded by broader policy changes like the One Big Beautiful Bill Act.
What should providers do?
Health systems should strengthen enrollment assistance, advocate for state-level safety nets, monitor financial indicators and invest in community partnerships to address social determinants of health. Strategic planning and nimble adaptation are essential as the policy landscape evolves.
Last week’s hearings underscore the complexity of U.S. health care, where rising premiums, inflation and labor pressures collide with consumer expectations for access and affordability. For providers, maintaining operational resilience and community trust will require proactive engagement and cost discipline.
Learn more about what’s happening in health care in our industry outlook.
