Many Arizona small business owners and self-employed workers could lose affordable health insurance if enhanced premium tax credits are allowed to expire

A main sticking point that has led to the current federal government shutdown is over affordable health care that millions of Americans purchase on the Affordable Care Act Marketplace. One of the actions that Congress can take now is to preserve affordable health insurance by extending enhanced premium tax credits for these plans.   

Self-employed Arizonans and Small Business Owners Face Impact 

As more people enter the gig economy, Arizona has seen a steady rise in the number of self-employed workers, up nearly 13 percent from 2019 to 2023. As a result, the U.S. Census Bureau reports that there were at least 527,000 self-employed workers in Arizona in 2023.  

These small business owners, employees of small businesses who don’t offer health insurance, and self-employed workers make up a substantial portion of the individuals who purchase health insurance through the Affordable Care Act marketplace. 

According to the Kaiser Family Foundation, an estimated 48 percent of marketplace enrollees under the age of 65 are either small business owners, self-employed workers, or employed by a business with fewer than 25 employees.  

A separate report from the U.S. Treasury Department found that Arizona small business owners and self-employed workers made up 1 out every 4 Arizonans enrolled in the marketplace in 2022. The same report found that, nationally, 82% of enrolled small business owners and self-employed workers utilized a premium tax credit to purchase coverage. 

The expiration of enhanced premium tax credits will increase costs for many of these Arizona small business owners and self-employed workers by hundreds to thousands of dollars, depending on income level. For instance, a 60-year-old married couple operating a small business in Arizona that report $82,000 in income could see their premiums increase by $13,927 without the enhanced premium tax credit. Given the already rising costs of utilities, rent, and groceries in the state, a loss of enhanced premium tax credits could stifle entrepreneurship, reduce employment, and force individuals and families to lose health care or make other difficult budget decisions.   

Additionally, increasing health care costs would further harm small businesses that are already suffering from higher prices due to tariffs and less access to credit and borrowing, in part due to economic uncertainty.  

The average tariff rate on small and medium-sized businesses has nearly doubled from 6.5 percent in January 2025 to 11.4 percent in August 2025. The U.S. Chamber of Commerce has collected stories from members on how tariffs are putting small businesses under immense strain.  

Banks that lend to small businesses have reported tighter credit standards for such businesses. The Federal Reserve’s Twelfth District, in which Arizona sits, reported decreased demand for small business loans, which can be an indicator of too restrictive lending standards, high interest rates, or even growing pessimism of small business owners of future economic conditions. 

Consequently, 2025 federal fiscal policy, and the extent to which it has had a negative impact on the overall economy, has significantly clouded the outlook for Arizona small businesses who will likely see continuing higher prices from tariffs and higher health care costs from the expiration of enhanced premium tax credits. 

Arizona is home to many entrepreneurs and people who choose to be their own boss. Especially at a time when economic uncertainty is present, Congress should invest in their ability to afford health care so they can continue to remain entrepreneurs. It’s imperative that Congress treat enhanced premium tax credits as the priority they are - by extending them before they expire.