Where is Congress Headed on Healthcare?

Enhanced Affordable Care Act (ACA) premium tax credits are set to expire at the end of this month unless Congress takes action. These subsidies, first expanded under the American Rescue Plan and later extended by Congress, lowered monthly insurance premiums and pushed the so-called “subsidy cliff,” allowing many Americans to qualify for assistance for the first time. If the enhanced subsidies expire, premiums for marketplace plans will rise sharply in 2026, in many cases increasing by 75 percent or more, and millions of people could lose coverage or be priced out of the insurance market altogether.

The urgency stems from the real and immediate consequences of inaction. Without the enhanced subsidies, many ACA enrollees will face significantly higher premiums starting next year, and some will lose all financial assistance. Analysts project that millions could lose coverage, increasing the uninsured rate and undermining the stability of the individual insurance market. Insurers have already accounted for the expected expiration in their 2026 rate filings, meaning higher premiums are effectively locked in unless Congress acts quickly.

Senate Democrats have pushed for a multi-year extension, arguing that the credits are critical to maintaining affordable coverage and stabilizing insurance markets. Republicans have offered alternative proposals, such as redirecting funds toward health savings accounts or broader health policy reforms, and even a shorter subsidy extension with eligibility limitations. But all proposals failed to gain sufficient bipartisan support in the Senate last week.

In the House, Republican leadership is looking to advance a health care package through the Rules Committee later today to tee up a floor vote tomorrow. The Lower Health Care Premiums for All Americans Act includes a number of key reforms, including pharmacy benefit manager transparency, cost-sharing reduction payments, expanded Association Health Plans, and more. Because the bill notably does not include an extension of the ACA subsidies, a growing number of GOP lawmakers are pushing for an amendment to extend subsidies, though most expect the amendment to fail.

Unfortunately, expectations that Congress will enact anything to address the cliff by the end of the year are low. And there’s reasonable skepticism about how quickly we’ll see movement next year. Even if leadership does prioritize healthcare legislation early next year, the remaining FY26 appropriations bills are going to require a lot of Congress’s attention for most of January.

But with midterm elections creating a somewhat truncated legislative schedule next year, Republicans are going to feel pressure to produce results on healthcare as soon as they can. One possibility is that Republicans make healthcare the primary focus of a second reconciliation bill. Doing so would not only give them a legislative win going into what are expected to be contentious elections, but one that they could claim for the party alone.

On the other hand, there are real limitations to what can be accomplished through the reconciliation process. And bipartisan legislation could actually move faster depending on the scope of the package, which might be preferable given the urgency.