A new study found that the sunsetting of the Affordable Care Act (ACA) enhanced premium tax credits (PTC) will have a minimal impact in Connecticut.
In 2021, the PTCs were adopted to stabilize the healthcare market during the pandemic. These tax credits are set to expire at the end of the year.
If the tax credits are not renewed, uncompensated care demand would increase by less than one percent in Connecticut, according to a recent study from the Urban Institute’s Health Policy Center. Statewide, all health spending and uncompensated hospital spending for the nonelderly would decrease by 0.2%, or $45 million and $22 million, respectively.
In contrast, the nationwide uncompensated care demand would increase by 11.6% across the nation, health spending for the nonelderly would go down by 1.3% and uncompensated hospital spending for the nonelderly would decrease by 11.4%.
The Urban Institute came to this conclusion by using a microsimulation of the U.S. health care system that focuses on the nonelderly population.
“The model’s baseline is regularly updated to reflect changes in law, state policies such as Medicaid expansion, premium increases, population growth, general inflation, and the most recent published Medicaid and Marketplace enrollment and costs in each state,” the report explains.
This model calculates costs through 2026.
However, the report’s authors claim there may be more dramatic changes in the future because of new health care regulations in the One Big Beautiful Bill Act (OBBBA).
“The two most significant OBBBA changes affecting enrollment are the loss of PTC eligibility for lawfully present immigrants with incomes below 100 percent of FPL (Federal Poverty Level) and the loss of the special enrollment period for people with incomes below 150 percent of FPL,” the Urban Institute explains. “For this analysis, Medicaid baseline enrollment for 2026 does not reflect provisions in the OBBBA because the major provisions affecting Medicaid enrollment do not take effect until later years.”
These changes—the PTCs lapsing and new regulations under the OBBBA—will lead to Access Health CT losing one-third of its members by 2034, CEO James Michel reported at the September Board of Directors’ meeting.
Around 5,300 people in the state who have a household income of less than 100% FPL will lose health care coverage immediately under the OBBBA because of new regulations, according to Michel. An additional 28,000 people insured through Access Health have a household income of over 400% the FPL and will no longer be eligible for any sort of financial support if the PTC tax credits lapse.
This will lead to a ripple effect that will cause health care costs to increase across the state. As a result, many people who are eligible will choose to leave Access Health anyway.
Access Health is lobbying to reinstate the PTCs, Michel said.
“However, not everyone who drops Marketplace coverage becomes uninsured,” the Urban Institute report states. “For example, some adults who previously declined employer-sponsored health insurance offers for enhanced PTCs would switch back to employer-sponsored insurance under standard PTCs.”
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