5 Fast Facts: Saving ACA Enhanced Premium Tax Credits Protects Patients and Pennsylvania Hospitals

October 09, 2025

Enhanced premium tax credits through the Affordable Care Act (ACA) lower the cost of health insurance, especially for individuals purchasing coverage through the ACA marketplace and those with lower incomes. In recent years, the ACA’s enhanced premium tax credits have expanded to make insurance even more affordable and accessible.

Congress must act to extend the tax credits before they expire at the end of this year. If these enhanced tax credits expire, millions could face a dramatic spike in premiums. This would result in fewer Pennsylvanians with coverage and add to the uncompensated care absorbed by already strained hospitals.

Here are five reasons why protecting the ACA enhanced premium tax credits are so critical for hospitals and patients across Pennsylvania:

1. ACA tax credits make health coverage affordable for many Pennsylvanians
   • The expiration of the ACA’s enhanced premium tax credits could lead to an average 82 percent increase in premiums for Pennsylvanians currently receiving assistance to purchase insurance through the commonwealth’s marketplace, Pennie. As a result, up to 150,000 Pennsylvanians could drop their coverage, leaving them uninsured. This would significantly worsen the already critical problem of uncompensated care for hospitals.
2. Affordable coverage yields more timely, preventive care
   • Health insurance is essential for early detection and preventive care. Insured individuals are more likely to seek timely medical care, which helps in the early detection and better management of health conditions. This, in turn, leads to fewer avoidable hospitalizations, which lowers overall health care costs for everyone. Without the enhanced premium tax credits, more Pennsylvanians would be forced to delay care, leading to poorer health outcomes and higher hospital costs, as individuals with untreated conditions will still need more expensive emergency care.
3. The loss of affordable coverage with ACA tax credits will make Pennsylvania sicker and poorer
   • If the enhanced premium tax credits expire, the number of uninsured Pennsylvanians would likely increase, leading to a sicker population. Not only does this mean more strain on the health care system, but it also affects the workforce participation of these individuals. A sicker workforce results in lower productivity, higher absenteeism, and an overall drag on the state’s economy. Maintaining affordable health coverage is crucial for Pennsylvania’s long-term quality-of-life, growth, and stability.
4. ACA tax credits make health insurance possible for Pennsylvania’s small businesses, self-employed workers, rural communities, and low-income households
   • ACA tax credits sustain the ACA marketplace. Health insurance coverage made available on the ACA marketplace allows coverage to be purchased affordably outside the pathway of employer-sponsored insurance. This is a significant benefit for small business owners, people who are self-employed, and entrepreneurs who cannot receive health insurance through an employer.
5. Ending ACA tax credits would be another blow to hospital financial stability
   • Pennsylvania hospitals are already operating under significant financial pressure due to inadequate payments, regulatory burdens, and workforce shortages—and recent federal Medicaid cuts will worsen this trend. The loss of ACA premium tax credits would increase uncompensated care and further destabilize hospital finances.

The bottom line:  The continuation of ACA’s enhanced premium tax credits is a vital lifeline for both the health of Pennsylvanians and the financial stability of the state’s hospitals. Preserving these credits is essential for reducing uncompensated care, improving health outcomes, and ensuring the economic and health care stability of our commonwealth.

See HAP’s letter to Congress for more information.