Small businesses are the backbone of Gainesville’s—and the nation’s—economy, driving job creation, innovation and prosperity. But as many small business owners and self-employed entrepreneurs will tell you, they have long faced an uphill battle trying to provide and afford health coverage. Unlike large corporations that can offer robust benefit packages, small businesses often struggle with high costs, limited options and administrative hassles that make it extremely challenging for them to offer coverage to their workers.
Today, anyone without access to affordable health coverage can get it on their own and qualify for tax credits if their premiums are unaffordable as a share of their income. Many American businesses—and the workers who keep them going—rely on federal enhanced premium tax credits to afford health coverage. These tax credits, which were implemented in 2021, have helped lower the cost of insurance premiums, making it easier for small business owners, their employees and self-employed workers to access high-quality healthcare.
Last year, these tax credits reduced the monthly premiums for 95,000 people in Florida’s Third Congressional District, which includes Gainesville. Nationwide, 4.2 million small business owners and self-employed workers rely on the individual marketplace for coverage, up from 2.6 million in 2021. And Florida and Texas led the nation in small business owners and self-employed workers with marketplace plans in 2022, with 600,000 and 400,000 such plans, respectively.
But this essential support is set to expire after this year, threatening to raise premiums dramatically and put coverage out of reach for thousands of hardworking Floridians. If Congress does not act to extend these credits beyond 2025, small businesses will suffer, entrepreneurship will slow and the burden of rising health costs will fall on those least able to afford it.
The numbers tell the story: if the enhanced premium tax credits expire, the U.S. could lose more than 285,000 jobs. By 2026, total GDP is projected to decline by $34 billion, with total economic output shrinking by $57 billion. These losses would also result in a $2.1 billion reduction in state and local tax revenues and a $5.4 billion drop in federal tax revenues.
By helping employees afford their own coverage, enhanced premium tax credits free entrepreneurs from having to worry about managing expensive employer-sponsored plans. Instead, they can focus on growing their business and creating jobs. Entrepreneurs can take risks, launch new ventures and scale their businesses without worrying about losing access to healthcare. And gig workers can maintain the flexibility they need without sacrificing financial security and health coverage.
The decision before Congress is clear. Extending the enhanced premium tax credits is not about expanding government programs or creating new entitlements. Rather, it will continue a proven, market-driven solution that helps Gainesville’s small businesses, supports entrepreneurship and ensures that Florida’s workforce remains strong and competitive.
Editor’s note: This is the latest in a series of business columns sponsored by Pavlov Media. This story was updated with additional information.