Enhanced premium tax credits, or EPTCs, subsidize the cost of health insurance premiums bought through the federal Marketplace created by the Affordable Care Act.
These credits – originally set to end in 2022, but given a three-year stay under the Inflation Reduction Act – are set to expire at the end of this year. If they do, South Carolina could stand to lose $1.24 billion in GDP in 2026, according to a report released Monday by the Commonwealth Fund and George Washington University.
With that loss, the report states, South Carolina also could lose close to 11,000 jobs and $92 million in state and local taxes next year.
These losses are among the heaviest losses projected for next year in the absence of EPTCs, and are the largest among states of comparable population (South Carolina’s 2024 population estimate from the U.S. Census was almost 5.5 million.)
One of the reasons South Carolina would be hit so hard, the report argues, is because it is one of the last 10 states to have not expanded Medicaid access under the Affordable Care Act. Collectively, the report’s researchers project that the United States will lose $34 billion in GDP and 286,000 jobs in 2026 if EPTCs expire – nearly half of those jobs in hospitals, doctors’ offices, and pharmacies.
Most of those losses -- $23 billion in lost GDP and 194,000 lost jobs – are projected to occur in just the 10 states that have not expanded Medicaid access.
For the record, the other nine states are Alabama, Florida, Georgia, Kansas, Mississippi, Tennessee, Texas, Wisconsin, and Wyoming.
According to the U.S. Census, 11.1% of South Carolinians younger than 65 did not have health insurance during the last Census taken. According to the Kaiser Family Foundation, 571,175 South Carolinians purchased a healthcare plan through the federal Marketplace in 2024.
The report argues that without the ability to afford premiums, households would be forced to drop coverage.
Leighton Ku, lead author of the report and director of the Center for Health Policy Research at GWU’s Milken Institute School of Public Health, said in a statement that without EPTC subsidies, “families will struggle to afford coverage, businesses will take a hit, and state and local budgets will be stretched even thinner. The ripple effects will be felt in every community.”
The report also projects that medical providers – particularly rural hospitals – will face closures and cuts to services.
“There’s no doubt that those who lose coverage will use the emergency room as their primary source of care, overtaxing an already stressed system, with hospitals that are over capacity and a diminishing, demoralized health care workforce,” Joseph Betancourt, president of Commonwealth Fund, said in a statement. “Quite simply, an increase in the uninsured rate is going backwards and will not make America healthy again.”
South Carolina has lost 4 rural hospitals – with a total 208 beds – since 2012.
The report’s authors fear ripple effects that begin with healthcare job losses and continue through various parts of the American economy.
“As insurers receive fewer federal subsidies, they could cut payments to hospitals, doctors’ offices, pharmacies, and other providers,” the report states. “In turn, health care employers would likely reduce jobs and spending, leading to broader projected job losses across industries like retail, real estate, and manufacturing. With lost wages and business revenue, states could experience declining consumer spending and tax revenue, putting additional strain on state budgets.”
South Carolina has repeatedly turned down incentives to expand Medicaid access. Gov. Henry McMaster has called expansion “a bad deal” for the state and instead touts better jobs as the way forward.
Corrections: Total projected jobs lost was changed from 195,000; Indiana was changed to Kansas
