WASHINGTON — Expanded Affordable Care Act (ACA) tax credits that have helped millions of Americans afford health insurance are now set to expire at the end of the month after the Senate on Thursday failed to advance either of two competing proposals to extend or replace the subsidies.
Meanwhile, millions of Americans now face the prospect of significantly higher insurance costs in the new year with no legislative solution in sight.
In consecutive votes, senators rejected a Democratic bill that would have extended subsidies for three years and a Republican alternative focused on new health savings accounts and limited direct payments. Both proposals failed to reach the 60 votes needed to move forward, confirming a result that lawmakers in both parties had long anticipated.
The Democratic proposal was defeated 51 to 48, with four Republicans joining Democrats in support of debating the extension. The GOP plan failed by the same margin, with every Democrat and Senator Rand Paul, a Republican from Kentucky, voting against it.
With Congress scheduled to adjourn for the holidays next week and no bipartisan negotiations in progress, the lapse of the subsidies on January 1 is now nearly certain. The expiration is likely to cause sharp premium increases for millions of people who purchase coverage on the ACA marketplace, adding more volatility to an already strained healthcare system.
Democrats accused Republicans of refusing to prevent a preventable crisis.
“People will die,” said Senator Jon Ossoff, Democrat of Georgia, warning that rising premiums could push families off coverage altogether. Senate Majority Leader Chuck Schumer said the vote represented the final opportunity to avert “a disaster” for consumers.
Republicans argued that extending federal aid would entrench what they see as an unsustainable program, claiming the ACA itself is driving up costs.
“The Democrat proposal, which is a three-year extension of the status quo, is an attempt to disguise the real impact of Obamacare’s spiraling health care costs,” said Senator John Thune, Republican of South Dakota and the majority leader. GOP lawmakers said their proposal would redirect support to consumers instead of insurance companies through tax-advantaged accounts, an approach echoed by President Donald Trump.
Democrats dismissed the Republican plan as providing little more than a “coupon” for high-deductible plans that would leave families vulnerable to thousands of dollars in upfront medical expenses.
The defeat of both proposals highlights how deeply the partisan divide over the ACA remains more than a decade after its passage. Despite a brief window for compromise during the 43-day government shutdown, bipartisan negotiations never came together. Efforts by moderates in both chambers to bridge the gap also stalled, with Democrats opposing abortion-related restrictions sought by Republicans and GOP leaders unwilling to consider a temporary extension.
In the House, Speaker Mike Johnson, a Republican from Louisiana, has promised to tackle health care legislation next week. However, an extension of the ACA subsidies is not currently part of the plan, and disagreements within the GOP over health policy have reduced the chances for reaching an agreement.
As time runs out, both parties are preparing for the political consequences. Democrats aim to highlight the premium increases before next year’s congressional elections, while Republicans are ready with their own arguments for the need to revise the health law.
