Washington, D.C. — Ahead of Affordable Care Act (ACA) marketplace open enrollment beginning November 1, a new analysis from the Center for American Progress finds that 4.4 million small-business people and self-employed Americans will face an average $1,500 increase in annual premium costs if Congress allows the enhanced premium tax credits to expire at the end of 2025.
The marketplaces are a vital source of coverage for people who own small businesses or work for themselves. CAP’s new analysis estimates that 5.2 million small-business people are enrolled in marketplace coverage, and 4.4 million of them receive enhanced premium tax credits that lower their costs by a combined $6.7 billion each year.
“Millions of low- and moderate-income small-business people will see their premium costs rise by more than $1,000 if Congress fails to act,” said Corey Husak, director of tax policy at the Center for American Progress and the author of the analysis. “Letting these tax credits expire would raise costs for exactly the business people most likely to be already struggling with higher prices.”
When Congress passed the Big Beautiful Bill, it made the temporary pass-through business deduction permanent but allowed the temporary enhanced premium tax credits to expire. In combination, these two choices raise taxes on business people making less than $150,000 while massively benefiting business owners with incomes greater than $500,000.
For business people with incomes less than $150,000:
- The pass-through deduction reduces taxes by $4.5 billion in 2026 or $425 per business person.
- The enhanced premium tax credits reduce taxes for this group by $5.8 billion in 2026, or about $1,500 per affected business person.
According to the U.S. Department of the Treasury, small-business people make up a disproportionate share of marketplace enrollees in Hawaii, North Dakota, the District of Columbia, Florida, Georgia, Louisiana, Nebraska, New Hampshire, and Texas, each with more than 30 percent of marketplace enrollees running their own business.
Read the full analysis: Congress’ Failure To Extend Enhanced Premium Tax Credits Will Greatly Increase Health Insurance Costs for Small-Business People by Corey Husak
For more information or to speak with an expert, contact Christian Unkenholz at [email protected].