Senate Nixes Health Care Subsidy Extension as Costs Climb
On Thursday, the Senate voted down a proposal to prolong tax credits under the Affordable Care Act, effectively ensuring that millions of Americans will face significant increases in costs as the new year begins. Senators turned down a Democratic proposal aimed at prolonging the subsidies for three years, as well as a Republican alternative that sought to establish new health savings accounts, marking an unceremonious conclusion to a months-long endeavor by Democrats to avert the expiration of the COVID-19-era subsidies on January 1. Ahead of the votes, Senate Democratic Leader Chuck Schumer of New York cautioned Republicans that if they failed to support the extension of the tax credits, “there won’t be another chance to act, before premiums rise for many people who buy insurance off the ACA marketplaces. Let’s avert a disaster,” Schumer said, warning that the American people were observing closely. Republicans contend that the plans under the Affordable Care Act are excessively costly and require a comprehensive overhaul, while Democrats swiftly dismissed the GOP’s health savings account proposal as insufficient for covering expenses for the majority of consumers.
Some Republicans have urged their colleagues to prolong the credits, including Sen. Thom Tillis of North Carolina, who said they should support a short-term extension to allow for consensus next year. However, despite shared interest across party lines to maintain the credits, there has been a lack of substantial discussions between Republicans and Democrats, even after a select group of centrist Democrats agreed with Republicans last month to conclude the 43-day government shutdown in return for a vote on prolonging ACA subsidies. Most Democratic lawmakers opposed the move, while numerous Republicans indicated they wanted the tax credits to expire. The agreement sparked optimism for a bipartisan resolution regarding health care, but that enthusiasm swiftly diminished due to the absence of genuine bipartisan discussions. The duelling Senate votes became the latest instance of political messaging in a Congress functioning largely along partisan lines, as Republicans advanced a significant tax and spending cuts bill this summer through budget tactics bypassing Democratic votes and adjusted Senate rules to overcome Democratic obstruction of Trump’s nominees.
The votes represented another unsuccessful attempt in the ongoing debate surrounding the Affordable Care Act, enacted by Democrats in 2010 to broaden insurance access. Since then, Republicans have repeatedly tried to repeal or reform the law, arguing health care costs remain excessively high, yet they have faced challenges in identifying an alternative. Democrats, meanwhile, have positioned the ACA as a pivotal political issue, wagering that millions purchasing health care through government marketplaces want to maintain their coverage. “When people’s monthly payments spike next year, they’ll know it was Republicans that made it happen,” Schumer warned in November, emphasizing Democrats would not compromise. Even if perceived as a political win, the failed votes are a setback for Democrats who insisted on extending the benefits, having instigated a government shutdown for six weeks in October and November while millions faced premium increases on January 1. Sen. Angus King said Democrats attempted negotiations with Republicans after the shutdown, but talks collapsed when Republicans insisted on adding new restrictions on abortion coverage, which Democrats declared non-negotiable.
Republicans have seized the impending expiration of the subsidies to renew critiques of the ACA and to seek consensus on how to proceed. Thune announced earlier this week that the GOP conference had decided to vote on the bill led by Sens. Bill Cassidy and Mike Crapo, despite several Republicans offering alternate ideas. In the House, Speaker Mike Johnson has assured a vote next week, although Republicans debated various options with no clear consensus emerging. Moderate House Republicans facing competitive reelection campaigns are urging Johnson to find a solution for extending the subsidies, while more conservative members want a complete overhaul of the law. Rep. Kevin Kiley has advocated for a temporary extension that could pave the way for broader health care reforms. “If they fail to act and health care costs go up, the approval rating for Congress will get even lower,” Kiley said.
