The US House of Representatives has failed to come up with a plan to extend the expiring Affordable Care Act (ACA) tax credits, which are set to lapse on December 31. The credits, which have been in place since 2014, help lower healthcare costs for millions of Americans who receive coverage through the ACA marketplace. During the COVID-19 pandemic, Congress expanded the credits, leading to a significant increase in ACA enrollment, including in Texas, where the number of enrollees jumped from 1.3 million in 2021 to 3.9 million this year.
Most Republicans in the House, including those from Texas, have opposed extending the subsidies, arguing that they are wasteful and prone to fraud. Instead, they have proposed alternative plans, such as expanding association health plans and increasing oversight of pharmacy benefit managers. However, these plans have not gained traction, and the House has not been able to coalesce around a single alternative plan.
The expiration of the subsidies is expected to have a significant impact on Texas, where nearly 4 million people could lose their coverage, according to an analysis by the health policy organization KFF. Insurers in the state have already requested premium hikes, which could lead to hundreds of thousands of people dropping their insurance coverage.
Despite the potential consequences, most Republican representatives from Texas have stood firm in their opposition to the subsidies. However, some Republicans, including U.S. Rep. Monica De La Cruz, have expressed support for a bipartisan plan that would extend the tax credits for a year, with new guardrails in place to prevent fraud.
The issue is expected to be a major point of contention in the 2024 midterms, with Democrats looking to capitalize on healthcare affordability issues. Four Republicans, all from vulnerable districts, have signed onto a Democratic-led discharge petition to force a vote on extending ACA subsidies for three years. The petition received enough signatures, compelling a floor vote in January.
The House has approved a narrow bill that would fund cost-sharing reduction payments and allow small businesses to join association health plans, but it does not address the expiring subsidies. The bill faces an uphill climb in the Senate, where a bipartisan group of members is working to craft a plan to address the issue. Ultimately, the fate of the ACA subsidies remains uncertain, with no clear solution in sight as the deadline for their expiration approaches.