WASHINGTON — A pot of funding for insurance coverage under the Affordable Care Act expires at the end of this year, and Republicans in Congress are rejecting Democrats’ demands to extend it this month in a government funding bill.
Expiration of the funds would lead to sharp premium hikes for people all over the country. While they officially expire after the last day of 2025, there is some urgency to act soon: Insurers are filing their rates over the next few weeks, and open enrollment begins Nov. 1. Failure to act by then could cause many people to drop their coverage for 2026.
“Technically, the enhanced ACA tax credits don’t expire until December 31. But, the longer Congress waits to extend them, the more damage and chaos there will be in the meantime,” Larry Levitt, a health care policy expert at KFF, a nonpartisan research group, said in an email.
“If open enrollment starts November 1 without the tax credits extended, ACA enrollees are going to log in to their accounts and see average out-of-pocket premium increases averaging over 75%. Their eyes are going to pop out of their heads, and many will likely decide not to enroll,” he continued.
Republican leaders say Congress can debate the Obamacare funding in November or December, although they haven’t committed to allow votes to extend the money.
“I think that we are open to the conversation about what we do with the Obamacare premium tax credits,” Senate Majority Leader John Thune, R-S.D., told reporters last week. “That’s something in which members, Republican senators and I think, for that matter, Republican House members have an interest, as well, but this isn’t the place to do that.”
Democrats approved the money during the Biden administration to cap premiums at 8.5% of income and ease the burden for some middle-income earners. The nonpartisan Congressional Budget Office estimates an annual cost of $35 billion to extend the money that is set to expire. (Other Obamacare funds will continue.)
Approving the funds in November or December could alleviate the pain for many enrollees, but it would be messier than acting this month. Some states require insurers to file two sets of rates, one in the event the subsidies are extended and one in the event that they expire. Congress could extend the open enrollment period or permit insurers to revise rates later on. Those options would cause some enrollees to fall through the cracks.
Sen. Lisa Murkowski of Alaska, the only GOP senator who voted against her party’s short-term government funding extension Friday, proposed an alternative framework that includes “extending the ACA’s enhanced premium tax credits to stabilize costs for those on the exchanges” in a bill to prevent a shutdown.
That move caught the attention of some Democrats.
“Lisa Murkowski tweeted out a proposal that acknowledged what I think other Republican senators are saying, both publicly and privately, which is that the loss of the ACA subsidies are a very urgent issue,” Sen. Brian Schatz, D-Hawaii, a member of his party’s leadership team, said Monday on a call with reporters. “People are already getting their letters — increases of up to $400 or $500 per person per month. And so they feel a sense of urgency on this, and I think conversations are ongoing.”
“You can kind of tell when something is a nonstarter,” he added. “And this is not a nonstarter for many Republicans. They understand this has to get fixed.”
Democrats see the funding bill as a rare opportunity to force the issue, as it requires votes from 60 senators — meaning at least seven Democrats — to pass. While they have also proposed to repeal President Donald Trump’s Medicaid cuts and unfreeze money he has withheld, the Obamacare funds carry a unique political dynamic: Trump’s own pollster has warned that Republicans would pay a price with voters if premiums go up.
Sen. Mike Rounds, R-S.D., who has publicly pushed for extending the ACA funds, said he’d “prefer” to act on it sooner rather than later. But he downplayed the damage of waiting until the end of the year and noted that many states allow two sets of premiums for that scenario.
“From what I’m understanding, they’ll work this thing through. But the agents I’m talking to tell me most of the companies are doing two sets, and the states are allowing them to do it. I don’t know if that’s everybody or not,” Rounds said. “It’ll depend on how we come across on this. I think there’s a good possibility we’re going to get something done. But time will tell.”
Insurers also warn there will be consequences if Congress waits.
“While the tax credits are set to expire at the end of 2025, Congress should take action to extend them as soon as possible to provide peace of mind and minimize confusion for consumers when they receive information about their 2026 premiums in October,” said Chris Bond, a spokesman for America’s Health Insurance Plans, the industry’s lobbying group.
Dr. Mehmet Oz, the chief of the Centers for Medicare & Medicaid Services (CMS), which oversees Obamacare, sided with Republicans on keeping the money out of a continuing resolution.
“There’s a lot of discussion right now around how to make the ACA work best for the American people,” Oz said last week. “I think the [continuing resolution] should be clean … and allow that process to continue. But rest assured, there’s a lot of discussion on this topic daily. It’s the topic that I personally think about the most.”
Pressed by NBC News about whether it would be helpful to CMS to extend the health care funds by Nov. 1, when open enrollment begins, Oz replied, “We can manage it either way.”
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