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 the loss of these subsidies would lead to higher healthcare premiums for millions of Americans. Over 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.
The expiration of these tax credits coincides with new federal funding cuts stemming from recent Republican-led legislation. The GOP reconciliation law reduces federal support for the Essential Plan by $7.5 billion annually—more than half its total funding—starting in 2026. As a result, New York will be required to revert the Essential Plan back to a Basic Health Program. Governor Hochul noted that all seven Republican members of New York’s Congressional delegation supported this budget bill.
“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 under the American Rescue Plan and later extended through 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. This led to a significant increase in ACA Marketplace enrollment nationwide, rising from about 11.4 million in 2020 to over 24 million in 2025.
If Congress does not act before the end of next year, average health insurance premiums in New York could rise nearly 40 percent according to estimates from New York State of Health, resulting in an average monthly increase of $114 for individuals and $228 for couples. The Congressional Budget Office projects that millions across the country could lose their coverage, which may impact access to care and cause economic challenges within the healthcare sector.
Governor Hochul warned that failure by Congressional Republicans to renew these tax credits could reverse gains made over fifteen years in reducing New York’s uninsured rate.
