Update on Expiring ACA Tax Credits

January 1st Expiration of the ACA Expanded Subsidies Likely

Tomorrow, the Senate is prepared to vote on two different health care proposals. Neither bill is expected to achieve the necessary 60 votes to proceed to the floor. Unless there are major concessions from Democrats or a dramatic change in posture from the President in the next week, Congressional Republicans are poised to let the enhanced tax credits expire on January 1, 2026. 

• No health care plan is expected to pass in Congress this week.

• The proposed House Republican alternative health care plan has no extension of Affordable Care Act (ACA) subsidies.

• The Senate GOP plan (Cassidy-Crapo) has no extension of ACA subsidies.

• Senator Bernie Moreno (R-OH) dropped his effort to come up with a GOP extension with Senator Susan Collins (R-ME), which was a seen as the most viable deal. 

• President Trump reiterated his support for providing money directly to individuals.

• President Trump said this week, “I don’t want to give the insurance companies any money."

• The path to expiration (inaction) is far easier than an extension (last-ditch, bipartisan deal). 

• Moderate Republicans are still pushing for a vote, but a growing number in the GOP want to see the scope of political fallout after January 1 then assess the landscape. 

• There is no clear path to a fix on Hyde Amendment issues. 

Post-January Deal Still on the Table

The chances for a last-minute agreement before Congress is scheduled to adjourn next week are fading. That does not, however, mean that discussions will end if the tax credit expire. Here are number of reasons why a January agreement is still on the table. 

Potential Sticker Shock

Most of the price increases for ACA plans have already been announced and made public on HealthCare.gov. However, current enrollees who do not intend to change their plan have likely not looked at the coming rate hikes. There could be a large outcry from some of the 24 million individuals on ACA plans when their bills hit.  

Discharge Petition

A two-year extension of the ACA subsidies with income caps and anti-fraud measures has enough bipartisan support to pass in the House. Democrats could use a discharge petition to force a vote after 30 days if 218 Members agree. That would require five Republicans to cross the aisle. 

Conservative Calling for Plan

Conservative House Member Jim Jordan (R-OH) said that Republicans should create a plan that includes reforms and ACA subsidy extensions in order to get ahead of a discharge petition that would force a House vote on a bill with no reforms. 

Must-Pass Vehicle

Temporary funding for a majority of federal agencies expires on January 30, 2026. That “must-pass” bill is an obvious vehicle for other deals like the ACA subsidies. 

2026 Midterm Map

Senate Leaders still have an incentive to address health care premiums. Five of the nine largest ACA enrollment states include Texas, Georgia, North Carolina, Ohio, and Michigan. Each of these states holds a key senate race crucial to Republicans in 2026.