As I follow the debate in Congress over what to do with the soon-to-expire Obamacare subsidies, it’s obvious to me that lawmakers waited too long to reach common ground. Now that the deadline is approaching, a wave of competing ideas has appeared, and none of them seem close to becoming law.
From the conversations and statements I’ve watched this week, Republicans are still trying to piece together something that enough of them can agree on. There are ongoing discussions with the White House, but even with constant talks, the party remains far from united.
Democrats have rolled out their own plan to extend the expanded subsidies for three more years. I don’t expect Republicans to support that approach. The GOP has opposed the Affordable Care Act since the moment it was created, and they did not back the subsidy increases that took effect in 2021. Nothing has changed on that front.
Inside the Republican conference, the divide is easy to see. Some want to let the enhanced subsidies expire and walk away. Others want to reshape Obamacare into a more conservative version of itself. And another group worries that allowing premiums to jump for millions of people will come back to haunt them politically.
Even if Republicans wanted to answer the Democratic proposal with a clear alternative, their internal disagreements make it unlikely they will rally behind a single plan. In the House, three committees are working on ideas to restructure premium rules, and Republican leaders say they hope to settle on something soon. But hope is not the same as agreement.
If Congress fails to act, the system will revert back to the original subsidy formula from 2010. That means many lower-income individuals who currently pay nothing for coverage will suddenly face costs. People earning above 400 percent of the poverty level will see especially sharp increases. The current rule that caps premiums at 8.5 percent of income will also disappear unless Congress steps in.
Here is how the most influential players are approaching the problem.
Donald Trump was initially preparing to announce a temporary extension of the subsidies, but he backed away after resistance from within his own party. Some Republicans wanted strict limits added, including restrictions related to abortion coverage, and others demanded broader conservative changes if subsidies were going to continue. The original idea would have limited subsidies to those earning under 700 percent of the poverty level and added a minimum premium requirement to address concerns about fraud. With growing disagreement, those plans were put aside.
Senator Chuck Schumer has taken the opposite route and is pushing for a simple extension of the current expanded subsidies without income caps. He has made it clear that his caucus will support the measure when it comes up for a vote. He wants Republicans to publicly choose whether they support extending the lower premiums or not.
Senator Bill Cassidy is working on a Republican alternative that redirects the enhanced subsidies into health savings accounts. His idea encourages people to switch to lower-premium, higher-deductible plans, with the belief that HSAs will help them manage increased out-of-pocket costs. The challenge is that HSA funds cannot be used to pay insurance premiums, which complicates the idea.
Senator Rick Scott has proposed transforming the subsidies into special health savings accounts that people could use to pay premiums. His plan also allows the purchase of insurance across state lines through an existing waiver system. With so many of his constituents enrolled in marketplace plans, Scott is under particular pressure to show he’s engaged on the issue.
Senator Josh Hawley has taken a more populist angle. He has expressed concerns about rising premiums and wants to allow people to deduct medical expenses up to $25,000 a year regardless of whether they itemize. It’s unlikely to move forward at the moment, but it may reappear during a future tax debate.
There is also a bipartisan effort driven by lawmakers in tight districts who understand the fallout if premiums spike sharply. Nearly three dozen members from both parties have urged leadership to reach a compromise. Their plan would extend the enhanced subsidies for one year for those earning up to 600 percent of the poverty level, and gradually scale them down for people earning more. They also propose new measures to prevent fraud.
Many of these lawmakers represent highly competitive districts heading into 2026, and they know the political consequences of rising health care costs better than anyone.
As I watch this unfold, it’s clear to me that Congress knows the stakes but remains paralyzed by internal divisions. Republicans cannot settle on one approach, Democrats do not want to compromise on theirs, and the clock continues to run down.
If nothing changes soon, millions of Americans will feel the impact before Congress can agree on any long-term solution.