Elected officials in New Mexico warn that unless a series of federal tax credits are extended before the end of the year, consumers purchasing health insurance on the individual marketplace could see dramatic hikes in prices.
In 2021, Congress passed the Enhanced Premium Tax credits, which expanded the size of and eligibility for refundable tax credits that individuals who receive health insurance on the individual health insurance marketplace. According to the American Hospital Association, the credits added 10 million people to the rolls of the insured and assisted other consumers. However, those credits are set to expire at the end of the year.
Democrats, such as Sen. Martin Heinrich of New Mexico, have said that if those 2021 credits lapse, it would lead to hikes in insurance premiums for those who buy insurance on the marketplace.
The debate over the extension of the credits has become ensnared in the debate over a continuing resolution to avoid a federal government shutdown next week. Congressional Democrats have made the extension of those subsidies a condition for their support of any continuing resolution.
“The American people deserve a government funding bill that protects their health care from unsustainable price hikes, lowers costs and ensures that this Administration follows the rule of law. But Trump and Republicans are refusing to negotiate a bipartisan government funding bill that does this — recklessly pushing us closer to a government shutdown that will have devastating consequences for working families,” Heinrich stated in a recent press release.
The Congressional Budget Office found failure to renew the credits would result in 5.1 million people without health insurance by 2034.
Rep. Gabe Vasquez, D-N.M-02, has claimed the fallout from an expiration of the tax credits could hit consumers hard, with 51,000 New Mexicans expected to see an average monthly increase of $578 in healthcare premium costs, and those residing in rural areas could see their rates jump by as much 90%.
“For many New Mexico families, these tax credits are the difference between being able to see a doctor or losing health coverage altogether,” Vasquez said.
Beyond Washington D.C., Democratic governors are also sounding the alarm. Gov. Michelle Lujan Grisham of New Mexico predicted during a press call hosted by the Democratic Governors Association that if the credits are not renewed, the higher premiums will lead to 27,000 New Mexicans who purchased insurance on the marketplace losing it.
Lujan Grisham added that many of those people earn too much to qualify for Medicaid, placing them in what she described as an unstable situation, where preventive care and surgeries are delayed and emergency rooms are forced to shoulder more of the burden.
“We just need to extend the tax credits and to make sure that we don’t see these kinds of double-digit premium increases,” Lujan Grisham said.
Next week, legislators in New Mexico will head to Santa Fe for a special session to deal with expected decreases in federal funding and higher health insurance costs. New Mexico currently has large cash reserves and has enjoyed years of surpluses, but Lujan Grisham said reallocating funds will likely come at the expense of other priorities.
“When we do that, we destabilize our investments somewhere else,” she said.
Republicans have argued for a clean continuing resolution and that a short-term funding measure is not the proper vehicle to deal with other demands, such as extension of the credits. Earlier this week, Senate Majority Leader John Thune, R-S.D, weighed in on the issue in an interview with CNN.
“If we’re going to have that conversation, we should, but it ought to be in a place and time where we can look at some of the reforms that come with that to make that program work in a way that is a better deal for the American taxpayer,” Thune said of the credits.