Congressional Democrats on Wednesday introduced a bicameral bill to extend enhanced subsidies that help make the Affordable Care Act’s (ACA) insurance plans cheaper, the official opening shot in what will likely be the next major fight over the law.
The legislation from Sens. Jeanne Shaheen (D-N.H.) and Tammy Baldwin (D-Wis.), as well as a companion House bill from Rep. Lauren Underwood (D-Ill.), would make the enhanced tax subsidies permanent.
The enhanced subsidies increase financial help to low-income individuals who qualify for plans with cheap, or even zero-dollar, premiums. They were first put into effect during the height of the coronavirus pandemic as part of the economic recovery law, and later extended in the Inflation Reduction Act.
Millions of enrollees have come to rely on the enhanced subsidies, and they’ve helped boost health insurance enrollment to record levels. Many of the people who have benefited the most are in red states that haven’t expanded Medicaid.
The enhanced subsidies, combined with increased funding for outreach and marketing, have led to record-high enrollment in ACA exchanges.
Nearly 21 million people are currently insured by an ACA health plan, according to federal figures, and over the last decade, nearly 50 million have been on an ACA plan at some point.
“I want to be clear, this isn’t about just adding numbers to the board. These savings are a difference between families having coverage and going without it. Fundamentally, health care is a human right, and right now, we have an opportunity to meet the moment and make high quality care affordable and accessible for all,” Underwood said during a press conference Wednesday.
But the subsidies expire in 2025, and Democrats want Congress to move as quickly as possible.
Insurance commissioners have also called on Congress to extend the subsidies; but even if they don’t, commissioners want Congress to act quickly so they will know whether they can rely on the subsidies still being around or if they need to calculate plan rates without them, and can start the process of setting those rates for 2026 as early as possible.
According to the nonpartisan health research organization KFF, the extra tax credits average $705 per enrollee.
If they are allowed to expire in 2025, 20 million Americans will see an average premium spike of almost 80 percent, KFF found.
“Red states, blue states, purple states are all home to families who would be forced to face skyrocketing costs,” Shaheen said. “Premiums would spike in every state. More people would be uninsured and too many Americans would be priced out of getting vital health care coverage.”
Extending the subsidies would be extremely expensive, however; according to the Congressional Budget Office, permanently extending the ACA’s tax credits would increase the deficit by $335 billion over the next 10 years. But 3.4 million more people annually would have health insurance.
Republicans are balking at the price tag, and argue too many high earners are getting taxpayer-subsidized insurance. They are digging in for a fight.
Shaheen said it’s important to act this year, and suggested the legislation could be included in a year-end spending and tax extender bill.
That’s unlikely, so whoever controls Congress next session will likely be able to decide what happens next: whether to let the subsidies expire, seek to extend them permanently or attempt a grand bargain under divided government.
The issue hasn’t risen to the broader level of prominence that efforts to repeal the health law did, but Vice President Harris is campaigning on making the subsidies permanent.
“Vice President Harris is fighting to improve health care and lower costs, and part of her plan includes making permanent credits that are lowering health care premiums by an average of about $800 a year for millions of Americans,” Harris campaign spokesman Joseph Costello said in a statement to The Hill.
