WASHINGTON, D.C. — Congress remains deadlocked on a plan to address rising health care costs and expiring Affordable Care Act tax credits.
Dueling health care proposals by Democrats and Republicans failed in the Senate on Thursday. Democrats proposed extending enhanced ACA tax credits for three years. The Republicans’ alternative was a plan that promoted health savings accounts (HSAs) — but with no extended subsidies.
Neither plan reached the 60 votes necessary to break the filibuster and clear the Senate. The clock continues to run out on the Biden-era enhanced subsidies, set to expire at the end of December.
“If Republicans do not support an extension of the tax credits, as many as 1.7 million New Yorkers will see their health care costs skyrocket in the new year,” said Sen. Kirsten Gillibrand, D-N.Y. “Nationwide, we can expect to see a staggering 21% increase in the number of uninsured Americans if Republicans allow these tax credits to expire.”
But Republicans believe their plan, without a tax credit extension, gives consumers more flexibility.
“Why would Democrats want to give all the money to the insurance company as opposed to all the money to the patient? Why do they want them to have a $6,000 deductible as opposed to money in their purse pocketbook account by which to pay those initial expenses? That should be the basis for a bipartisan agreement,” said Sen. Bill Cassidy, M.D., R-La.
Instead of sending billions to insurance companies, Republicans proposed depositing up to $1,500 into health savings accounts.
“That’s not going to do nearly enough to offset the premium increases for many families facing these premium increases,” said Daniel Hornung, policy fellow at the Stanford Institute of Economic Policy Research.
Hornung, also a former deputy director of the National Economic Council, says if subsidies lapse, many people may be forced to drop insurance, which could put a strain on hospitals already coping with changes to Medicaid in the One, Big, Beautiful Bill Act.
“More and more patients coming in, not able to pay for the services that they’re getting in emergency rooms,” said Hornung. “And that level of uncompensated care, particularly for hospitals that are already struggling — rural hospitals, inner-city hospitals — is not something that they can afford.”
With both plans failing Thursday, lawmakers are back to square one. Still, Republicans remain adamant about rooting out waste, fraud and abuse while opening the window for ACA tax credit reform.
“You can’t just do a blanket extension without reforms,” said Senate Majority Leader John Thune, R-S.D. “It is rife with waste, fraud and abuse. It’s been driving up insurance premiums for people in this country at three times the rate of inflation. You’ve got to have some reforms to make this work.”
“It’s going to take more than a few days to figure out how to reach those kinds of reforms,” said Hornung. “The challenge over these next few days is how to prevent people’s premiums from going up on January 1st.”
In the House, several bipartisan proposals have emerged. Moderate Republicans and Democrats have unveiled bills that offer a compromise between the two bills that failed in the Senate today — for example, short-term fixes with new rules to multi-year extensions with income caps.
