Congress should allow expanded Obamacare Premium Tax Credits to expire as scheduled at the end of 2025, according to a letter sent by National Taxpayers Union (NTU) to members of Congress on Monday.
NTU’s letter comes at a critical time as lawmakers consider extending the Premium Tax Credits as part of a government funding deal before the end of September.
The credit was temporarily expanded during the COVID-19 pandemic by President Joe Biden, increasing the size of the credit and dramatically expanding its eligibility. The income cap was raised to allow the PTC to be claimed by people making nearly $500,000. Democrats used the ongoing public health emergency to justify this major Obamacare expansion, but, four years later, there is no rationale for keeping the credits in place.
“Americans are rightly concerned about the increasingly unaffordable cost of health care, but the solution to this problem is less government involvement, not more. Market-based reforms, not endless subsidies, are the best path toward affordable care,” said Thomas Aiello, NTU Senior Director of Government Affairs and author of the letter.
Research by the Paragon Health Institute indicates the credit is rife with waste, fraud, and abuse. The Internal Revenue Service’s Inspector General writes that the PTC suffers from an improper payment rate of 26% (FY23 data), representing the highest improper payment rate among government-funded health care programs.
If the generous COVID credits are extended permanently, CBO estimates it would add an average of $40 billion to the deficit per year.
“Obamacare Premium Tax Credits are an incredibly expensive subsidy that should be on the chopping block as lawmakers grapple with record high national debt. Allowing the PTC expansion to expire is a small but meaningful way to demonstrate seriousness about restoring fiscal discipline,” Aiello said.
Read the letter here.