Michael McAuliff of ModernHealthcare
September 11, 2025 05:00 AM
A path to extending enhanced health insurance exchange subsidies has emerged on Capitol Hill, but only a handful of Republicans have embraced the idea and Democrats are dubious the GOP majority will act.
The subsidies are a sensitive subject politically in addition to being a priority for health insurance companies, providers and insurance consumers. In part because they expect them to expire as scheduled at year-end, exchange insurers are seeking big rate hikes for 2026. Exchange enrollees face an average 75% increase in the cost of health insurance next year, according to the healthcare research organization KFF.
The Democratic Party, which authored the Affordable Care Act of 2010 and the laws that created and later renewed the enhanced subsidies, supports extending them and is trumpeting their looming disappearance ahead of next year’s congressional elections.
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Ten Republicans from swing districts where exchange plans are popular have offered a bill to extend the expiring exchange subsidies for one year. Nine of them voted for President Donald Trump’s tax law, which cut Medicaid and exchange spending by $1.1 trillion over 10 years. But Republicans opposed the ACA from the beginning and spent nearly a decade trying to undermine and repeal the law. This antipathy to the ACA and to federally funded healthcare programs is evident in the tax law, which takes $124 billion out of the exchanges. The GOP also declined to maintain the enhanced tax credits in that legislation.
These more generous premium tax credits for more enrollees debuted in 2021 as President Joe Biden and the then-Democratic congressional majority sought to blunt the economic effects of the COVID-19 pandemic. Since they, the enhanced subsidies are credited with driving exchange enrollment to record levels. The nonpartisan Congressional Budget Office predicts 4.2 million people would lose insurance if the subsidies expire at the end of 2025.
Two House Republicans who sponsored the measure to extend the subsidies — Reps. Brian Fitzpatrick (Pa.) and Juan Ciscomani (Ariz.) — said a one-year extension would buy time for Congress and Republican opponents to hash out a longer-term plan for the exchanges. “There’s a legitimate debate to be had about what the future looks like, right? So bring everybody’s ideas to the table,” Fitzpatrick said. “But doing nothing is not an option. Letting them expire is not an option,” he said.
“It’s a lot easier to bring those ideas together when premiums are not high on people, and we can have that time to settle in on that,” Ciscomani said.
Republican leaders have been noncommittal but have not entirely closed the door. House Speaker Mike Johnson (R-La.) told Punchbowl News last week that the issue is under discussion and that he understands the “political realities and the realities of people on the ground.” Johnson did not, however, pledge to take action.
“I don’t think the policy is great,” Johnson said. ”It was a COVID-era issue, and so that’d be a big thing for the Republican Party to continue or advance that. At the same time, we don’t want anyone to be adversely affected.”
Senate Majority Leader John Thune (R-S.C.) was perhaps less enthusiastic, telling reporters when Congress returned from recess last week that Democrats need to offer a solution because they created the problem by expanding the subsidies. “But, obviously, it’s something that, yeah, some of our members are paying attention to,” Thune said.
Not many Senate Republicans back extending the enhanced subsidies, however, beyond moderate Sens. Susan Collins (Maine) and Lisa Murkowski (Alaska), as well as Sen. Thom Tillis (N.C.), who is not seeking reelection next year. There is no Senate counterpart to the House GOP bill. Tillis, a member of the Senate Finance Committee, which would have jurisdiction, pointed to both the political considerations Johnson cited and the impacts on people who depend on the subsidies as reasons to extend them, but with tighter rules and other changes. “It’s bad policy, bad politics to let them lapse,” Tillis said.
Other Finance Committee Republicans were much less supportive. Sen. Chuck Grassley (R-Iowa) said he was not involved in any talks. Sen. Ron Johnson (R-Wis.) said he hopes his colleagues are not considering any extensions. Sen. James Lankford (R-Okla.), who had been open to discussing extending the tax credits in the past, said Democrats on the committee were talking about it, but not Republicans.
Sen. Bill Cassidy (R-La.), who also chairs the Senate Health, Education, Labor and Pensions Committee, suggested there could be talks.
“I know that there’s interest but I can’t tell you that it’s going to happen,” Cassidy said.
For their part, House Democrats said they were skeptical the GOP backers really believe they have a chance at a time when the White House is continuing to demand unilateral spending cuts and Republican leaders have floated a second partisan budget bill that conservatives view as a vehicle for more healthcare cuts.
“My feeling is that this isn’t about actual policy,” House Democratic Conference Chair Pete Aguilar (R-Calif.) said at a news conference Wednesday. “This is about them being able to defend terrible positions and saying, ‘Well, I told the speaker.’ Well, it’s not enough to do that. You’ve got to take action. Our votes matter in this place, and their votes attacking healthcare are hurting the American people.”
Fitzpatrick, who voted against the tax bill, acknowledged the lack of commitment from Republican leaders, but suggested that could change after Congress deals with funding the government before the fiscal year ends Sept. 30. “Honestly, right now their 1,000% focus is on the government shutdown issue,” Fitzpatrick said. “We have to keep this issue front and center.”
Some Democrats have said they may help Republicans avert a shutdown in return for extending the tax credits, but Democratic leaders have yet to endorse this tactic.