NEW YORK (AP) — A legislative package that appears on track to end the longest government shutdown in U.S. history leaves out any clear resolution on the expiring Affordable Care Act tax credits that have made private health insurance less costly for millions of Americans.
The deal agreed to by Senate Republicans and a handful of Democrats on Sunday instead only guarantees a December vote on the enhanced premium tax credits, which are set to expire at the end of the year without congressional action.
Even then, House Speaker Mike Johnson, R-La, hasn’t agreed to a matching House vote on the issue, making the chances of an extension increasingly bleak.
Some Democratic lawmakers looking to compromise have sought one-or two-year stopgap measures that would keep the subsidies alive, but they’ve failed to get buy-in from Republican leadership.
Meanwhile, some Republican lawmakers and President Donald Trump have argued for letting the subsidies expire and suggested alternatives to defray health costs, such as federal flexible spending accounts given to every eligible American.
As the shutdown deal advances, here’s what its passage could mean for Affordable Care Act tax credits – and for the enrollees who benefit from them.
The subsidies could expire without any replacement
If the current legislative package passes and Congress doesn’t take any other action on health care costs this year, the enhanced premium tax credits that have helped many Americans pay for Affordable Care Act health insurance plans for four years will disappear.
On average, that will more than double what subsidized enrollees currently pay for premiums, according to an analysis by the health care research nonprofit KFF.
Hardest hit will be a small number of higher earners who will have to pay a lot more without the extra subsidies and a large number of lower earners who’ll have to pay a small amount more, said Cynthia Cox, a vice president and director of KFF’s ACA program.
Over time, as many younger, healthier people inevitably forgo more expensive coverage, insurance companies are expected to further increase costs for members of the covered population to account for them being older and sicker.
If more Americans are uninsured and can’t pay out of pocket for emergency health care, some of their health costs will also fall on hospitals and the government.
The sticker shock of Affordable Care Act price hikes already has been hitting Americans shopping for next year’s health insurance since the window for selecting next year’s coverage began Nov. 1.
One Pennsylvania resident who relies on marketplace health insurance, 51-year-old hair stylist Christine Meehan, told The Associated Press her $160 a month plan is set to increase by about $100 a month starting next year. Her annual deductible will be higher too.
Congress could extend the subsidies, or reinstate them if they expire
Though Republicans who lead both the House and the Senate have so far refused to engage on extending the tax credits as part of a deal that ends the shutdown, it’s not too late for Congress to take that step if they come around to it. They can even reinstate the subsidies after they expire.
Such a move would likely enjoy widespread favor with Americans, according to a recent poll. About three-quarters of U.S. adults – including about half of Republicans – still support extending the expiring tax credits, according to a new KFF poll conducted Oct. 27 through Nov. 2.
If lawmakers do save the subsidies, federal and state marketplaces will have to adjust the plans they’ve made available for consumers. Insurers and outside experts say that can be done but may take weeks and will become more difficult as time goes on.
Even if the subsidies are extended, it may already be too late for some prospective enrollees who have already had more than a week to see next year’s higher prices and make other plans.
“They just might react and say this is too expensive for me, I can’t afford this anymore,” Cox said. “There’s no guarantee that you can get that person to come back and shop again.”
Congress could seek other ways to reduce Americans’ health costs
If the enhanced premium tax credits expire, lawmakers could still find other pathways to help Americans afford health insurance – though reaching any deal will likely be difficult in a bitterly divided Congress, particularly on an issue that has long been polarizing.
Trump on Saturday called for sending the money saved by not extending the subsidies “directly to the people.” On his Truth Social platform, he criticized the Affordable Care Act and said Americans should be able to use the savings to purchase other kinds of care instead.
Senate health committee chair Bill Cassidy, R-La, has advanced some ideas along those lines. In a floor speech last week, he said eligible Americans could be sent “a pre-funded federal flexible spending account” to use for health expenses, from dental care to prescription drugs and preventive services.
And on Saturday, Sen. Rick Scott, R-Fl, posted on X that he’s working on a bill to accommodate Trump’s request and give money directly to Americans in funds similar to health savings accounts.
The plans are for now initial and far from being set in motion, and it's unclear how much money they could save Americans on health care.
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