Bills to Address Expiring ACA Subsidies Fail to Pass Senate

The Senate will not be deciding on a health care plan easily, as both the Democratic and Republican plans failed to advance to the Senate floor on Thursday in 51-47 and 51-48 votes, respectively.^1,2 The votes come as a response to the Affordable Care Act (ACA) health care subsidies expiring in the new year, which would increase the premiums for health care for millions of Americans.

The health care subsidies were originally passed in the wake of the COVID-19 pandemic in 2021 as a means of making sure marketplace coverage was affordable based on a person’s income.³ The subsidies aim to cover the difference between the full premium and the affordable price that is based on a beneficiary’s income. They affect approximately 22 million people who use the ACA marketplace to cover their insurance.

Both Republican and Democratic lawmakers have proposed means of fixing the affordability of the ACA plans. Democrats proposed a 3-year extension of the enhanced subsidies.⁴ The minority party is allowed to vote on their health care plan as part of the deal struck by moderate Democrats to reopen the government after the shutdown earlier this year. Republicans have indicated that they are not going to approve this plan from the Democrats, claiming that the subsidies would bring on waste, fraud, and abuse as well as increase costs overall.

The Democrats’ plan would increase the federal deficit by approximately $89 billion but would also increase the number of people with health insurance by 8.5 million by 2029.

The Republicans, by contrast, have proposed using health savings accounts (HSAs), with senators Bill Cassidy (R, Louisiana) and Mike Crapo (R, Idaho) spearheading the plan. The proposal is to move the money from the tax credits and put that money into HSAs for individuals on “catastrophic” plans or bronze-level plans from the ACA. This would primarily affect those earning less than 700% of the federal poverty level, with those aged 18 to 49 years receiving $1000 in HSA funds and those aged 50 to 64 years receiving $1500 in HSA funds. Republicans claim that this would stop payments to insurance companies and reduce premiums due to cost sharing.

According to NPR, the Republican bill will not allow for the money to be used to pay for health care premiums, and those deductibles can average about $7000.⁵ The bill also failed to meet the voting requirements, as 60 senators would need to vote in the affirmative to get the bill to the Senate floor, a majority that the Republicans do not hold.

The failed votes represent the latest in the legislative quest to address health care costs in the US. The government shutdown, which began in October and ended in November, primarily came about due to disagreements surrounding funding the health care subsidies as part of the spending bill proposed by the Republicans.⁶ The fate of the subsidies was not agreed upon when the shutdown ended, leaving the possibility of premiums increasing by up to $794 per person due to the end of the subsidies and changes to tax credit calculations.

With neither health care plan receiving the required votes from the Senate today, there are only 3 weeks for Congress to come up with a solution to the ACA premiums expiring in the new year. Should no solution be brought to the table in time, millions of Americans will be seeing increased premiums as early as January 1, 2026.

References

1. Shabad R, Kapur S. Democratic proposal to extend Obamacare subsidies for 3 years fails to advance in Senate vote. NBC News. December 11, 2025. Accessed December 11, 2025. https://www.nbcnews.com/politics/trump-administration/live-blog/trump-administration-live-updates-senate-health-care-redistricting-rcna247875/rcrd94267?canonicalCard=true
2. Shabad R, Thorp V F, Kapur S. Senate GOP health care plan fails to advance in floor vote. NBC News. December 11, 2025. Accessed December 11, 2025. https://www.nbcnews.com/politics/trump-administration/live-blog/trump-administration-live-updates-senate-health-care-redistricting-rcna247875/rcrd94265?canonicalCard=true
3. The health insurance subsidies behind the government shutdown. Harvard Kennedy School. October 20, 2025. Accessed December 11, 2025. https://www.hks.harvard.edu/faculty-research/policy-topics/health/health-insurance-subsidies-behind-government-shutdown
4. Pecorin A. Senate poised to cast votes on competing health care proposals. ABC News. December 11, 2025. Accessed December 11, 2025. https://abcnews.go.com/Politics/senate-poised-cast-votes-competing-health-care-proposals/story?id=128290170
5. Miller S. Senate to vote on dueling health care proposals as ACA premium hikes loom. NPR. December 11, 2025. Accessed December 11, 2025. https://www.npr.org/2025/12/11/g-s1-101655/senate-aca-premium-vote
6. Bonavitacola J. Government shutdown concluded but ACA subsidies in limbo. AJMC^®. November 13, 2025. Accessed December 11, 2025. https://www.ajmc.com/view/government-shutdown-concluded-but-aca-subsidies-in-limbo