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1.7 million Texans could lose health coverage under expiring tax credits, ACA changes in GOP megabill | Houston Public Media

1.7 Million Texans at Risk of Losing Health Coverage as Tax Credits Expire and GOP Pushes ACA Overhaul

In a looming crisis for healthcare accessibility, an estimated 1.7 million Texans could find themselves without health insurance if enhanced premium tax credits under the Affordable Care Act (ACA) are allowed to expire at the end of 2025. This dire projection comes amid growing concerns over a Republican-led "megabill" that proposes sweeping changes to the ACA, potentially exacerbating the fallout from the lapsing subsidies. Health policy experts warn that the combination of these factors could reverse years of progress in reducing the uninsured rate in Texas, a state already grappling with one of the highest uninsured populations in the nation.

The premium tax credits, which were significantly boosted by the American Rescue Plan Act of 2021 and extended through the Inflation Reduction Act of 2022, have been instrumental in making health insurance more affordable for low- and middle-income families. These enhancements eliminated the income cap for eligibility, allowing even those earning above 400% of the federal poverty level to receive subsidies if premiums exceeded a certain percentage of their income. As a result, enrollment in ACA marketplace plans surged nationwide, with Texas seeing particularly dramatic gains. In 2024 alone, over 2.5 million Texans enrolled in subsidized plans, many for the first time, thanks to these financial lifelines that reduced monthly premiums to as low as zero for some qualifying individuals.

However, these expanded credits are set to sunset after December 31, 2025, unless Congress acts to renew them. Without extension, premiums could skyrocket for millions, pricing out those who rely on the subsidies to afford coverage. According to analyses from organizations like the Urban Institute and KFF (Kaiser Family Foundation), the expiration could lead to a nationwide drop of about 7 million people from ACA marketplaces, with Texas bearing a disproportionate share of the burden—roughly 1.7 million residents potentially losing their plans. This includes working-class families, gig economy workers, and small business owners who have come to depend on the marketplaces for affordable options outside of employer-sponsored insurance.

Compounding the issue is the Republican Party's renewed push for ACA reforms, encapsulated in what advocates and critics alike are calling a "GOP megabill." This legislative package, drawing from frameworks like Project 2025—a conservative policy blueprint—aims to restructure key elements of the ACA. Proponents argue that the changes would introduce more market-driven efficiencies, such as converting Medicaid funding into block grants for states, loosening regulations on insurance plans, and emphasizing high-risk pools for those with pre-existing conditions. However, detractors contend that these alterations could undermine protections for vulnerable populations, leading to higher costs and reduced coverage options.

In Texas, where the state has steadfastly refused to expand Medicaid under the ACA—leaving an estimated 1.5 million low-income adults in a coverage gap—the expiration of tax credits and potential ACA tweaks could create a perfect storm. Health advocates point out that many of the 1.7 million at risk are from underserved communities, including rural areas and urban centers like Houston, Dallas, and San Antonio, where access to affordable care is already strained. For instance, in Harris County alone, tens of thousands of residents have benefited from the enhanced subsidies, enabling them to manage chronic conditions like diabetes and hypertension without facing bankruptcy from medical bills.

Experts from the Texas Health and Human Services Commission and independent think tanks have modeled various scenarios. In one projection, if the subsidies lapse without replacement, average monthly premiums for a benchmark silver plan could increase by 50% or more for middle-income earners. A family of four earning $60,000 annually, for example, might see their subsidy drop from several hundred dollars per month to nothing, pushing their out-of-pocket costs beyond $1,000 monthly. This financial shock could force many to forgo insurance altogether, swelling the ranks of the uninsured and increasing reliance on emergency rooms for routine care—a costly inefficiency that burdens taxpayers and hospitals alike.

The GOP megabill adds another layer of uncertainty. Key proposals include repealing the individual mandate (already effectively nullified but symbolically targeted), allowing insurers to offer skinnier plans that exclude certain essential health benefits, and shifting more authority to states for marketplace oversight. Supporters, including some Texas lawmakers, argue this would foster innovation and lower costs through competition. "The ACA has become a bloated system that stifles choice," one Republican congressman from Texas remarked in a recent statement, emphasizing the need for "patient-centered reforms" that prioritize flexibility over mandates.

Yet, public health officials and consumer advocacy groups are sounding alarms. "This isn't just about numbers; it's about lives," said a spokesperson for Protect Our Care, a national advocacy organization. "In Texas, where we already have high rates of maternal mortality and chronic disease, losing coverage for 1.7 million people could lead to preventable deaths and a surge in untreated illnesses." Studies cited in the analysis suggest that uninsured individuals are less likely to seek preventive care, leading to higher rates of hospitalization and long-term health complications.

The political landscape further complicates the outlook. With the 2024 elections potentially shifting control of Congress and the White House, the fate of the ACA hangs in the balance. If Republicans gain unified control, the megabill could advance quickly, possibly as part of a reconciliation process to bypass filibusters. Democrats, meanwhile, are rallying to extend the subsidies, with proposals in the House and Senate aiming to make the enhancements permanent. President Biden has repeatedly called for protecting the ACA, highlighting its role in covering over 40 million Americans nationwide.

In Texas, local leaders are preparing for the worst. Houston Mayor John Whitmire has urged state officials to reconsider Medicaid expansion, noting that it could provide a safety net for those losing marketplace coverage. Community health centers, already overwhelmed, are bracing for an influx of uninsured patients. "We're talking about families who finally got a foothold on stability through these subsidies," explained a director at a Houston-based clinic. "Without them, we'll see more people delaying care until it's too late."

Broader economic implications are also at stake. The healthcare sector in Texas employs millions and contributes significantly to the state's GDP. A mass exodus from insurance rolls could destabilize the market, leading to higher premiums for those who remain insured and potential job losses in related industries. Small businesses, which often rely on ACA marketplaces for employee coverage, might face increased costs, hampering growth in a state known for its entrepreneurial spirit.

Personal stories underscore the human cost. Take Maria Gonzalez, a 45-year-old single mother from El Paso, who shared her experience in a recent interview. After losing her job during the pandemic, she enrolled in a subsidized ACA plan that covered her asthma treatments and her son's check-ups. "Without that help, I'd be choosing between rent and medicine," she said. Her story is echoed by countless others: veterans in rural counties, young adults aging out of parental plans, and immigrants navigating complex eligibility rules.

As the deadline approaches, advocacy efforts are intensifying. Groups like the Texas Organizing Project are mobilizing voters to contact lawmakers, while national campaigns aim to highlight the successes of the enhanced subsidies. Data shows that since their implementation, the uninsured rate in Texas dropped from about 17% to around 16%, a modest but meaningful improvement in a non-expansion state.

Ultimately, the convergence of expiring tax credits and proposed ACA changes represents a critical juncture for healthcare in Texas and beyond. If unaddressed, it could undo a decade of gains, leaving 1.7 million Texans vulnerable to financial ruin and health crises. Policymakers face a stark choice: extend and strengthen the subsidies to build on the ACA's foundation, or pursue reforms that risk widening inequalities. As debates heat up in Washington and Austin, the voices of those affected—everyday Texans striving for security—must not be drowned out by partisan rhetoric. The stakes are too high, and the time to act is now.

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