Four million Texans now take advantage of tax credits that help offset the cost of health insurance, making it one of the fastest growing states for enrollment through the Affordable Care Act.

That puts them at the center of the fight over federal spending that led to a government shutdown earlier this week, with Democrats insisting that any deal must include an extension of the tax credits, which are set to expire Jan. 1, while Republicans refuse to negotiate.

Without the enhanced tax credits, Affordable Care Act enrollees can expect to pay an additional $700 a year in premiums, according to analysis last year by the think tank Center on Budget & Policy Priorities. If they expire, hundreds of thousands of Texas families would likely allow their insurance to lapse, according to analysis last month by Texas A&M University.

"This will become a pocketbook issue for lots of Texas families," Laura Dague, a health economist with A&M's Bush School of Government and Public Service, wrote in the report. “When Texans go to pick their health plan for 2026, they need to be prepared for some serious sticker shock. Extra financial help that has been keeping monthly payments low for millions is set to go away."

Republicans opposed the enhanced premium tax credits when they passed Congress during the COVID-19 pandemic. But with Texas and other Republican-states among the largest beneficiaries of the program, which covers 24.3 million people nationwide, allowing the tax credits to expire carries political risk.

In a meeting with health care leaders in Houston last week, U.S. Rep. Lizzie Fletcher described the loss of tax credits, along with the GOP's recent decision to tighten the requirements for Medicaid, as leading to a "worsening health care crisis."

"These cuts will hurt every American, reducing the quality and availability of health care services here in Houston and across the country," said Fletcher, a Democrat.

That pending expiration also poses a threat to Texas hospitals, particularly those like Lyndon B. Johnson and Memorial Hermann in Houston that already serve a large portion of uninsured patients.

Since Congress passed the enhanced premium tax credits in 2021, which raised the amount of available financial aid and expanded who could get access, Texans enrollment in health insurance plans offered through the federal government's marketplace has doubled, according to the Texas Hospital Association. 

"When more patients become uninsured, that adds weight to our hospitals’ uncompensated care burden, which in turn drives up the cost for everyone else," John Hawkins, president of the Texas Hospital Association, wrote in August. "The expiration of (the tax credits) could lead to property tax hikes for Texas families and businesses, and higher premiums for enrollees with employer-sponsored coverage."

So far Republicans are holding strong, arguing the expiration of the tax credits and the tougher rules on Medicaid they passed earlier this year are necessary to rein in the federal deficit — already projected at $1.8 trillion for this year.

Earlier this week, U.S. Sen Ted Cruz, the Texas Republican, described Democrats' demands as, "taxpayer-funded healthcare for illegal aliens and a reversal of the Republican reforms blocking handouts to able-bodied adults who refuse to work."
 
"Americans voted for change under President Trump and a Republican Congress. We should not allow the Democrats’ efforts to succeed," he said.

View this article in the Houston Chronicle.