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Affordable Care Act subsidies remain in limbo after the passage of a spending bill this week to open the government.
Senate Majority Leader John Thune (R-S.D.) reportedly promised a Senate vote in December on extending the subsidies, but House Speaker Mike Johnson has made no similar commitment.
Now, Republicans are divided on how to handle rising insurance premiums for their constituents on ACA plans, according to The Hill. Negotiations between a group of 10-12 Republicans and Democrats gained momentum last week, but many GOP senators view the ACA as unsalvageable, the report said.
Some senators have argued that approving an extension for the ACA enhanced subsidies is throwing good money after bad. Senator Lindsey Graham (R-S.C.) has said that funding of the ACA has benefited health insurers but that premiums have gone up over 150%, The Hill said.
WHY THIS MATTERS
The ACA has had standard premium subsidies in place since the launch of the marketplaces in 2014.
The enhanced subsidies – which raised income limits for beneficiaries – were put into place during the COVID-19 pandemic in 2021. They have been extended and expire at the end of this year.
The enhanced subsidies primarily help people who make too much to apply for Medicaid but do not get insurance through their employer, according to AJMC.
An estimated 24 million people are set to be affected by the rise in premiums should these subsidies expire. Their premiums are expected to double.
This could leave millions without coverage, which affects hospitals when uninsured individuals wait to seek care in the emergency room. ERs are one of the highest costs for care, and hospitals would also face uncompensated care.
House Democrats are reportedly aiming to force a vote on the ACA subsidies using a discharge petition, which needs the signature of at least four Republicans to bring it to a House vote, according to the AJMC report.
THE LARGER TREND
ACA subsidies are primarily paid directly to insurers throughout the year and then reconciled through tax returns, taking the form of income tax credits for individuals, according to the Committee for a Responsible Federal Budget..
The gross federal cost of these subsidies and related spending grew from $18 billion in 2014 to $50 billion in 2018, $53 billion in 2020, $92 billion in 2023, and an estimated $138 billion in 2025, the report said.
President Donald Trump has reportedly called for sending money saved from not extending the tax subsidies to Americans to purchase other types of insurance.
Democrats had refused to sign a spending bill that did not include extending enhanced premium subsidies, but as the government shutdown became the longest in U.S. history, six Democrats voted with Republicans in the House to pass a spending bill.
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Email the writer: SMorse@himss.org