Maine Gov. Janet Mills (D) issued a statement Thursday urging the United States Congress to extend a federal tax credit that serves to dramatically lower the monthly cost of health insurance for many Americans.
Known as the enhanced premium tax credit (EPTC), this program gives many Americans access to free or discounted monthly premiums if they purchase their insurance through the Affordable Care Act (ACA) marketplace.
Without intervention from Congress, this tax credit is set to expire at the end of this year. Should this happen, only the more constrained version of the tax credit originally included in the ACA will remain in effect.
Right now, about 85 percent of the roughly 61,000 Mainers who get their insurance through the ACA marketplace take advantage of the EPTC.
Absent Congressional action, the 2021 expansion of this credit — approved as part of the American Rescue Plan Act (ARPA) and allowed those who otherwise would have fallen outside the income eligibility requirements to pay a discounted premium — will lapse.
Originally, Americans were only eligible for a tax credit if they earned between 100 percent and 400 percent of the federal poverty level, equal in 2025 to between $15,650 and $62,600 for a single-person household. This range increases to between $32,150 and $128,600 for a family of four.
Under the EPTC, however, anyone making above this threshold would have their monthly health insurance premium capped at 8.5 percent of their income.
The EPTC also eliminated or nearly eliminated premiums for those making between 100 percent and 150 percent of the federal poverty line.
The cap on premium contribution levels were also lowered for recipients at all income levels. According to KFF, these enhanced subsidies resulted in an extra $700 worth of savings, representing about 11 percent of the total savings provided by the tax credit and reducing the average annual net premium by about 44 percent.
Although this expansion was initially set to expire at the end of 2022, Congress extended the EPTC in the 2022 Inflation Reduction Act (IRA), establishing a new expiry date at the end of 2025.
It is this end date that is now quickly approaching as uncertainty remains on the path forward that lawmakers in Washington D.C. have in mind.
According to a December 2024 publication from the Congressional Research Service (CRS), the original version of the PTC — which conditioned eligibility on household income — will remain in place regardless of whether or not federal lawmakers extend the EPTC.
Should Congress decline to extend the EPTC, the 8.5 percent cap on health insurance premiums for those above this threshold will be lifted, returning the monthly cost for those individuals to the otherwise applicable market rate.
By eliminating the other changes made by the EPTC, many of those making between 100 percent and 400 percent of the federal poverty line would also see their premiums increase, particularly those who are currently receiving no-cost insurance.
The open letter sent by Mills to Maine’s congressional delegation indicates that about 9,500 Mainers would lose this tax credit if federal lawmakers do not extend the COVID-era provision, resulting in average increases of about $900 per month.
“For these households, the increase alone could equal up to 17 percent of income, with premiums consuming as much as 30 percent,” said Mills.
Regardless of income level, Mainers who get their health insurance through CoverME, the state’s ACA marketplace, can expect to see a 24 percent increase in the cost of their premiums, translating to an average of $286 per month.
[RELATED: Brace Yourselves: Health Insurance Premiums Expected to Skyrocket Next Year for Mainers]
Combined with the dramatic baseline rate increases expected for next year, the expiration of the ETPC could cause Mainers’ premiums to increase by an average of 117 percent next year.
“Behind these numbers are real Maine people whose lives depend on affordable health coverage. CoverME.gov consumers have shared what access to insurance means for them and how losing Enhanced Premium Tax Credits would impact their families,” Mills wrote. “They are our neighbors and colleagues across the state – health aides, hairdressers, insurance brokers, and others – whose stories share a common thread: affordable coverage is lifesaving, providing peace of mind and financial stability, especially for self-employed Mainers”
“Timely action will protect more than 61,000 Maine people from historic rate increases, safeguard small businesses and family budgets, and sustain the progress we have made in expanding access to affordable, high-quality care,” Mills concluded.
Click Here to Read the Governor’s Full Letter
As of Friday, a bipartisan bill has been introduced that would extend the EPTC for one year. Among the Democrat representatives to have cosponsored the bill is Maine’s Rep. Jared Golden.
“Letting the ACA Enhanced Premium Tax Credits expire would raise costs on Maine families. That’s simply not an option,” Rep. Golden said in a statement Friday.
“Mainers who buy private insurance on the ACA marketplace are staring down an average $180 monthly premium increase in January if Congress doesn’t extend these credits, with rural Mainers aged 60-64 facing the steepest increase,” he continued. “Many are likely to lose coverage in the face of this price spike.”
“I’ve always said I’ll work with anyone — Democrat or Republican — to serve my constituents,” said Golden. “I’m proud to join Congresswoman Kiggans and this bipartisan coalition to protect Mainers from increased health care costs.”
