ACA Subsidies Lapse as Congress Remains Divided on Extension

Congress Nears Recess Without ACA Subsidy Extension

Congress is approaching a scheduled holiday recess, making the extension of enhanced Affordable Care Act (ACA) health insurance subsidies increasingly unlikely. These subsidies are set to expire by the end of the year, which is expected to cause premium increases for millions of Americans. Many individuals who enroll in ACA marketplace plans have reported that their premium costs may double or triple. The deadline for signing up for plans on the ACA exchange has passed, leading some subscribers to indicate they will forgo health insurance due to the inability to afford premiums without the subsidies.

Legislative Efforts and Stalemate

Despite polls indicating widespread voter support across political spectrums for extending the enhanced subsidies, first passed in 2021, Congress has not coalesced around a plan to address the issue. The debate over healthcare has persisted in Congress for 15 years since the ACA's enactment and is anticipated to continue into the 2026 election cycle.

Groups of rank-and-file members in both chambers have sought to advance a bipartisan measure to extend the subsidies alongside certain reforms. However, only partisan measures have been brought to a vote. In the Senate, both a Democratic proposal for a standalone three-year extension and a Republican reform bill failed to garner sufficient votes. Four Senate Republicans—Susan Collins (Maine), Lisa Murkowski (Alaska), Dan Sullivan (Alaska), and Josh Hawley (Missouri)—supported the Democratic bill.

In the House, a vote is anticipated on a separate package of health reforms introduced by House Speaker Mike Johnson (R-La.). This measure incorporates long-standing conservative proposals, such as association health plans, but does not include an extension of the expiring subsidies. House Democrats have consistently advocated for the same standalone three-year extension proposed by Senate Democrats, without additional reforms.

Divergent Views on Subsidies

• Bipartisan Concerns: Some Republicans, including Rep. Kevin Kiley (R-Calif.) and Rep. Marjorie Taylor Greene (R-Ga.), have called for extending the subsidies. Kiley stated that "Twenty-two million people shouldn't be forced to pay the price for Congressional inaction," emphasizing the impact on small business owners, independent contractors, gig workers, and early retirees. Greene acknowledged the ACA's established presence and the high cost of healthcare in her district.
• House Republican Initiatives: Approximately a dozen House Republicans have supported proposals aimed at bypassing leadership to force a vote on extending the subsidies. However, it is uncertain whether these efforts will gain enough support or be voted on before the subsidies expire.

• Republican Critique of ACA: Many Republicans, including Sen. Bill Cassidy (R-La.), have expressed skepticism regarding the ACA, labeling it the "Unaffordable Care Act." Cassidy argued that subsidies merely "paper over" underlying costs. His proposed plan would have allocated up to $1,500 annually to health savings accounts for individuals up to 700% of the federal poverty line with high-deductible ACA plans, usable for expenses other than premiums, asserting that this directs funds to patients rather than insurance companies.
• Leadership Stance: House Republican leadership has prevented efforts by moderate Republicans, such as Rep. Jeff Hurd (R-Colo.), to add a vote on subsidy extensions to the GOP bill. Hurd, while recognizing that subsidies address a symptom, views their extension as essential for fostering bipartisan dialogue on healthcare.
• Shift in Republican Strategy: Speaker Johnson has articulated a new approach of "Reduce and Repair" for the ACA, moving away from the previous "Repeal and Replace" stance, acknowledging the law's deep integration into the system. However, concrete reforms have not been clearly articulated by Johnson or former President Trump.

Public Opinion and Political Implications

The ACA's popularity has increased significantly over the past 15 years. Ashley Kirzinger, director of survey methodology at KFF, notes that over half of ACA marketplace enrollees reside in Republican congressional districts, often including rural residents, small business owners, or farmers. An October survey in competitive congressional districts by Republican pollster John McLaughlin, who has worked with Trump, also indicated overwhelming support for extending the subsidies, suggesting electoral advantages for candidates who support them.

Democrats have historically leveraged healthcare as a key campaign issue. In 2018, candidates like Andy Kim and Elissa Slotkin successfully campaigned on healthcare, contributing to Democrats regaining control of the House. Now in the Senate, they continue to highlight the potential for doubled costs for individuals if subsidies are not extended. Meredith Kelly, a former Democratic congressional committee staffer, attributes the ACA's increased popularity to Republican efforts to repeal it during the Trump administration, stating that Democrats effectively communicated what was at stake.

Outlook for Subsidies

The House is scheduled to vote on Speaker Johnson's healthcare bill, which does not include a subsidy extension. Lawmakers are set to leave Washington soon. With new premium rates scheduled to take effect in less than two weeks, the timeframe for a legislative agreement to prevent these price increases is rapidly closing.