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As Congress prepares to vote on whether to extend the expired enhanced premium tax credits (EPTCs) under the Affordable Care Act (ACA) for an additional three years, lawmakers face an important decision with real consequences for workers, small businesses, and the broader economy. The Texas Association of Business (TAB) supports a temporary extension of the tax credits to prevent immediate coverage disruptions while Congress continues to pursue longer-term solutions to address the underlying drivers of healthcare affordability in the private market.

Allowing these credits to expire now would create unnecessary instability at a time when Congress is also working through other pressing legislative priorities, including a federal spending bill that is set to lapse at the end of the month. Inaction would put healthcare coverage at risk for millions of Texas workers and business owners.

What started as a post-pandemic measure has evolved and brought greater stability and growth in health coverage, with Texas as a whole seeing a 255% increase in enrollment since 2020 while approximately 3.3 million Texans buy coverage in the individual market. With the now-expired tax credits, around 800,000 Texans or more are expected to become uninsured, according to a recent analysis from Texas A&M university.

For Texans who retain coverage, the consequences are still significant. Premiums are set to increase by $700 for those enrolled in the private marketplace – placing additional financial pressures on Texans who are self-employed, growing their startups, and working for the more than 3 million small businesses that constitute the backbone of our state’s economy.

TAB members have raised clear concerns about the real-world impact of letting the tax credits expire. At the end of last year, TAB members Texas Hospital Association (THA) and the Texas Association of Health Plans (TAHP) warned about the dire consequences of Congress letting EPTCs expire in a column for the Austin American-Statesman, writing:

If the credits lapse, average out-of-pocket premium payments will spike by an estimated 115% in Texas, compared to about 75% nationally. The steepest hikes hit older adults and middle-income families who do not qualify for traditional assistance.

…Some will argue that Congress cannot afford this. But Texans cannot afford the alternative. Without action, premiums will spike for families simply trying to keep their same coverage. The people most likely to be hurt are the ones who embraced private coverage when it finally became affordable.

Texas Hospital Association and Texas Association of Health Plans, Austin American-Statesman, December 4, 2025

While TAB agrees that extending the tax credits is necessary to avoid sudden coverage losses, an extension alone is not a long-term affordability solution. That is why TAB has consistently supported reforms to expand affordable coverage options and give employers greater flexibility.

For several legislative sessions, TAB has supported solutions to create new, affordable coverage options for Texas employers, including a mandate-lite health plan that allows employers to purchase coverage they can afford and tailor benefits to meet the needs of their workforce. These reforms are designed to increase choice, lower costs, and strengthen the private marketplace overtime.

At TAB, we continue to support reforms at the federal and state level that reduce healthcare costs for employers and employees. Keeping our economy and business environment strong means keeping essential costs like health care in check for Texas small business owners, workers, and entrepreneurs. TAB will continue to monitor Congress’ actions on this issue and advocate for solutions that promote affordability and stability.

–Faith Villarreal, Director, Government Affairs, Texas Association of Business

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