Urgent Call to Continue Health Insurance Tax Credit by Washington Leaders
Lawmakers and leaders in Washington are making a strong appeal to Congress. They are keen to ensure that a key tax benefit, designed to decrease the cost of health insurance, doesn't run out by year's end.
In a recent press briefing, the governor, along with other prominent political figures, urged their colleagues in Congress to prolong the lifespan of the Enhanced Premium Tax Credits. These tax credits are an integral part of a healthcare law enacted just a few years ago. The credits make privately-held health insurance plans more pocket-friendly for residents in Washington through the state's Health Benefit Exchange.
But there's a catch - this benefit is due to run out by 2025 unless Congress steps in to extend it. If these credits are allowed to expire, analysts predict a drop in enrollees. While this would cut back on federal budget costs, it would also make healthcare less affordable for many.
A Moral Obligation to Extend Credits
Washington's leaders have strong feelings about this issue. They find it "ethically unacceptable" not to prolong these credits. They argue that failing to extend these simple tax credits is yet another way that the federal government is making healthcare less affordable and less accessible for residents across the state.
About 286,000 residents in Washington are currently enrolled in private plans via the Health Benefit Exchange. A whopping 75% of these people are eligible for federal premium tax credits, as per the state's Office of the Insurance Commissioner.
The Potential Impact of Losing the Tax Credit
If the tax credit were to disappear next year, the Health Benefit Exchange in Washington predicts that around 80,000 of these beneficiaries wouldn’t be able to afford their plan anymore and would lose coverage. Washingtonians save roughly $1,300 per year in premiums thanks to these credits, according to the governor.
If the credits were to vanish, a family of three in King County that earns $52,000 per year could expect to see their premiums jump from $490 per year to a staggering $2,800. This is a significant increase that could have serious financial implications for families across Washington.
Upcoming Expiration Date Coincides with Rising Insurance Premiums
To add to the concern, the expiration date of these credits is approaching at the same time that insurance premiums are projected to rise throughout Washington. Just this week, the state's Insurance Commissioner announced that 12 insurance providers, all of whom can sell plans in Washington, were justified in hiking their rates by 21%.
Given this upcoming rate increase, the potential loss of the Enhanced Premium Tax Credits could further exacerbate the financial burden for many residents in Washington. As such, the call from Washington's leaders to Congress to extend these tax credits is more urgent than ever.