Dive Brief:
- The House voted 230-196 on Thursday to extend expired subsidies for Affordable Care Act plans for three years, with 17 Republicans joining their colleagues across the aisle in support.
- The vote sends the bill to the Senate, where it’s expected to be dead on arrival. Though, some moderate senators are working on a compromise proposal, and the support for an extension could push the group to arrive at a solution.
- The enhanced subsidies were created in 2021 and expired at the end of December, exposing millions of Americans in ACA plans to steep premium hikes this year.
Dive Insight:
Congress expanded financial assistance for ACA plans during the coronavirus pandemic in a bid to increase health insurance coverage. The policies made ACA plans much more affordable for middle-income Americans and generally free for low-income Americans, and are credited for driving record enrollment into the exchanges.
However, they were set to sunset at the end of 2025, setting up a deadline for Congress to act to prevent significant increases in the nation’s uninsurance rate and painful revenue losses for U.S. providers.
Roughly 4 million Americans are expected to lose insurance as a result of the subsidy expiration, while hospitals and doctors could lose more than $32 billion in revenue this year alone, according to estimates.
Democrats made preserving the subsidies the foremost issue behind last fall’s historic government shutdown. But the year drew to a close without an extension, after most Republicans united against one.
Many in the GOP, including President Donald Trump, characterize the financial assistance as a handout to insurance companies and a driver of fraud in the exchanges. Republicans also say they’re leery about the steep price tag of an extension, which would cost federal taxpayers some $81 billion over a decade if extended for the next three years, according to the Congressional Budget Office.
However, some conservatives have remained open to an extension amid intense lobbying from the healthcare industry for a renewal and the threat of backlash from voters. Polling shows the assistance is deeply popular with the American public, so inaction could come back to haunt the GOP during this year’s midterm elections.
Four House Republicans broke from their party last month to support a discharge petition bringing the vote on ACA subsidies to the floor, while nine voted again to do so on Wednesday — defections that queued up Thursday’s ultimately successful vote, against the wishes of Speaker Mike Johnson, R-La.
Some experts view the vote as the enhanced subsidies’ final death rattle, given the Senate is all but certain to reject the bill. A similar measure failed in that chamber in December. Meanwhile, Congress is contending with the direction of U.S. foreign policy amid the Trump administration’s escalating confrontation with Venezuela, along with a Jan. 30 deadline to fund the government or risk another shutdown.
Still, healthcare groups applauded the House’s passage of the bill on Thursday, and urged the Senate to do the same.
“We appreciate the pragmatic lawmakers in the House who listened to their constituents and moved this issue forward today, but the job isn't done,” for-profit hospital association the Federation of American Hospitals said in a statement.
“We implore the Senate to take up this legislation and deliver its swift passage,” the Alliance of Community Health Plans, which represents nonprofit health insurers, said. “Quite simply, the time has passed to implement alternative solutions.”
A group of senators, including Sens. Susan Collins, R-Maine, and Jeanne Shaheen, D-N.H., have been working to hammer out a compromise that could have a chance of being signed into law. The emerging plan includes a two-year extension of the enhanced subsidies, along with the option of subsidies flowing into a health savings account in the second year, according to NPR.
The blueprint would also include an income cap and the removal of $0 premium plans, all reforms backed by the GOP. The House’s bill could be a legislative vehicle for the group to shepherd its own compromise through the Senate.
However, the Hyde Amendment — a policy barring federal funding for abortions — remains a sticking point. Some Republicans have called for clear language restricting the subsidies from paying for abortion care, though Trump in a speech on Tuesday urged his party to be “flexible” on Hyde if that means smoothing the path forward on health talks.
Even if a deal is reached, there’s still the possibility of a meaningful decline in ACA enrollment, due to headlines about premium spikes and confusion during the sign-up period. Still, early ACA enrollment has remained steady, the CMS said in mid-December.
