Governor Kathy Hochul has urged Congress to extend the Affordable Care Act’s enhanced premium tax credits, which are set to expire at the end of 2025. New York is among 18 states that have signed a joint letter warning that millions of Americans could face significant increases in healthcare premiums if these subsidies are not continued. According to state officials, more than 140,000 New Yorkers currently depend on these credits for affordable health coverage, and an additional 1.7 million benefit from the Essential Plan, which offers low or no-cost insurance for working families across the state.
The expiration of these tax credits comes as New York faces funding cuts under a recent GOP reconciliation law. The law will reduce federal support for the Essential Plan by $7.5 billion annually—more than half its total funding—starting in 2026. State officials say this change will force New York to scale back the Essential Plan into a Basic Health Program. All seven Republican members of Congress from New York supported the budget bill responsible for these reductions.
“Republicans in Congress just voted to make healthcare more expensive than ever for all New Yorkers,” Governor Hochul said. “I’m proud to stand with Democratic governors across the nation urging Congress to extend these tax credits that hardworking families deserve.”
The enhanced premium tax credits were initially expanded through the American Rescue Plan and later extended by the Inflation Reduction Act. These measures capped benchmark-plan premiums at 8.5 percent of household income and broadened eligibility beyond those earning up to 400 percent of the federal poverty level. As a result, enrollment in ACA Marketplace plans grew from about 11.4 million people in 2020 to over 24 million by 2025.
If Congress does not act before year’s end, state estimates indicate average health insurance premiums could rise nearly 40 percent statewide—translating into monthly increases averaging $114 for individuals and $228 for couples. The Congressional Budget Office projects that millions nationwide may lose their coverage if subsidies expire, leading to reduced access to care and possible job losses within the healthcare sector.
Governor Hochul warned that failing to extend these tax credits would reverse progress made over fifteen years in reducing New York’s uninsured rate.
