Washington, D.C. — The Affordable Care Act’s (ACA) premium tax credits help lower the monthly cost of health insurance for eligible individuals and families. A new Center for American Progress column highlights five ways the enhanced tax credits have improved health coverage and affordability, and why maintaining them is essential to protecting the progress made in expanding access to health care. The five ways enhanced tax credits are helping improve health coverage include:
- Enhanced tax credits reduced premium costs by an average of 44 percent for millions of low- and middle-income Americans in 2025. In 2025, 4 out of 5 HealthCare.gov consumers were able to select a plan with a monthly premium of $10 or less after the tax credit.
- Enhanced tax credits lowered out-of-pocket costs, making marketplace plans more accessible to more consumers. In 2024, $0 premium plans with lower cost sharing nearly doubled, rising from 5.7 million in 2020 to 10.6 million in 2024.
- Enhanced tax credits drove record marketplace enrollment. In 2025, more than 24 million Americans, including nearly 4 million new consumers, selected a marketplace plan; this played a key role in reducing the nation’s uninsured rate, from 9.2 percent in 2021 to 7.6 percent in mid-2024. People in rural communities, young adults, and self-employed Americans in particular benefited from improved affordability, increasing enrollment numbers.
- Enhanced tax credits expanded plan options and improved marketplace stability. By making coverage more affordable and driving record enrollment, the tax credits have attracted more insurers to participate, increasing competition and plan availability for consumers. Insurer participation in the marketplace reached its highest level in 2025, with an average of 9.6 insurers per state.
- Enhanced tax credits narrowed racial and ethnic coverage gaps. From 2020 to 2023, marketplace enrollment for Latino Americans increased by more than 100 percent and for Black Americans increased by 95 percent.
“The ACA’s enhanced tax credits are cutting costs for consumers, strengthening the ACA’s foundation, and expanding access to health care,” said Natasha Murphy, director of Health Policy at CAP and author of the column. “Without congressional action, millions of Americans shopping for coverage this fall will face higher premiums and reduced plan options, ultimately leaving many without insurance. Policymakers need to step up and extend the enhanced tax credits beyond 2025 so millions of Americans can benefit from these cost savings and have affordable access to health care. Not acting is not an option.”
Read the column: “5 Ways the ACA’s Enhanced Premium Tax Credits Have Improved Health Coverage Affordability and Access” by Natasha Murphy
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