Congress is running out of time in fight over healthcare subsidies
Image: Third Way
The window for extending billions of dollars in healthcare subsidies for Americans is shutting fast.
Enhanced tax credits for the Affordable Care Act (or “Obamacare”), which were first introduced during Covid, are set to expire at the end of this year unless Congress acts to extend them. And open enrollment for 2026 starts next month.
This issue has taken center stage in recent weeks after Democrats in Congress refused to agree to a gov’t spending deal unless Republicans extend the subsidies, prompting an ongoing shutdown that’s stretched nearly three full weeks.
- Among other things, the enhanced subsidies allow Americans who make more than the current eligibility limit—400% of the federal poverty level, or ~$62,600/year for singles—to qualify for healthcare tax credits.
- They also ensure that US households don’t pay more than 8.5% of their income for a benchmark plan under the ACA.
The arguments
Most Republican lawmakers in Congress oppose the enhanced gov’t subsidies for health care, arguing that they drive up insurance costs, are no longer necessary in the aftermath of the pandemic, and only temporarily cover up the inadequacies of Obamacare.
- They also cite estimates from the nonpartisan Congressional Budget Office that indicate the enhanced ACA subsidies would expand the US federal deficit by ~$350 billion over the next decade.
On the flip side, Democrats in Congress say the government should help Americans afford healthcare no matter the costs. They argue that without an extension of the enhanced tax credits, healthcare costs would skyrocket for millions of Americans, forcing some to forgo coverage altogether.
- Many Democratic officials also point to recent public polling that shows strong support for Congress acting to extend the enhanced subsidies—even among a majority of Republicans who align with the MAGA movement (57%).
Any action would have a major impact
There are currently 24.3 million ACA Marketplace enrollees, a figure that’s more than doubled since the Covid-era enhanced subsidies were first introduced in 2021.
And if that beefed-up assistance expires, annual premiums for subsidized enrollees are projected to increase an average of ~114%, from $888 this year to $1,904 next year, according to health-research nonprofit KFF.
Looking ahead…Early enrollment for 2026 plans under the Affordable Care Act opens on November 1.
đź“Š Flash poll: Do you think Congress should extend the enhanced Affordable Care Act subsidies, or let them expire at the end of this year?
See a 360° view of what pundits are saying →
Sprinkles from the Left
- Some commentators argue that both parties should recognize that while Covid-era policies can’t continue indefinitely, neither should they end abruptly, and they should agree to a gradual phasing out of subsidies with maybe a partial extension for certain populations.
- Others contend that the enhanced tax credits have been a mostly successful health care policy that reduces premiums for Americans—and until there’s a more permanent fix to the US healthcare system in desperate need of reform, these subsidies will have to do.
- “Don't Fight Over Obamacare Subsidies. Fix Them.” –Bloomberg Editorial Board
- “Quit lying about health care and the government shut down. Fix it now.” –Sentinel Colorado Editorial Board
- “Republicans will pay for inaction on expiring health care subsidies” –Jay Bookman, Georgia Recorder
Sprinkles from the Right
- Some commentators argue that Congress should allow the enhanced ACA subsidies to expire for three main reasons: the pandemic is now over, the subsidies will make health spending increase and not decrease, and it would save the US government billions in spending.
- Others contend that the current problem of skyrocketing healthcare costs for plans under the ACA is a predictable result of Obamacare, a poorly crafted law that increased health spending through massive subsidies without improving Americans’ health.
- “Congress Should Let the Obamacare Subsidies Expire” –Michael R. Strain, National Review
- “Insurance subsidies are a costly fix to Obamacare’s leaky ship” –Timothy P. Carney, Washington Examiner
- “Forget Obamacare subsidies — it’s time to mend or END the whole thing” –NY Post Editorial Board
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