An Obamacare sign is displayed outside an insurance agency on November 12, 2025 in Miami, Florida.
Joe Raedle | fake images
With Obamacare's enhanced tax credits set to expire at the end of the year, Republicans are proposing new alternatives aimed at reducing the cost of health care.
Their window to do so is rapidly closing, leaving middle-class Americans uncertain in the balance.
The White House is expected to make an announcement this week on efforts to renew or replace the Affordable Care Act's enhanced premium tax credits, according to Treasury Secretary Scott Bessent. However, MS Now late reported that an announcement had been delayed in part due to congressional backlash, according to two White House officials.
The news couldn't come soon enough for Shana Verstegen and her husband. The couple buys insurance through the ACA exchange and faces a 50% increase in their family plan premium in 2026 if Congress does not renew the enhanced tax credits.
“We've been looking at our spending, and it's hard now because everything is already so expensive,” with little room to cut costs,” said Verstegen, a fitness instructor in Madison, Wis. “We're looking at some activities our kids do and things like that.”
Verstegen traveled to Washington during the government shutdown to advocate for extending financial support to middle-class ACA enrollees, like his family. Since the government reopened, he has been warily watching discussions on Capitol Hill over so-called Obamacare tax credits.
“I'm thrilled that lawmakers are finally sitting at the table and talking about ways to make health care more affordable. What frustrates me is that there's less than a month left to do anything,” she said.
Senate Majority Leader John Thune, R.S.D., promised Democrats that the House would vote on extending the enhanced tax credits in mid-December as part of a deal to end a record-long government shutdown.
Dec. 15 is the deadline for most Americans to sign up for 2026 ACA coverage, and as Congress headed home for the Thanksgiving recess, there was no consensus on funding the Obamacare credit or what those subsidies would look like.
The Republican Party proposes cash payments
Some House Republicans signed a bipartisan letter urging Senate leaders to engage in negotiations that include members of both chambers to find a way to extend the enhanced tax credits for one year.
The subsidies, enacted during the Covid pandemic, provide help to middle-class enrollees by capping their share of premium payments at 8.5% of income.
The cost of expanding tax credits is more than $30 billion a year, according to the nonpartisan Government Accountability Office.
President Donald Trump has opposed an extension of Obamacare tax credits that he says fund the “money-sucking” insurance industry, stating in a post on his Truth Social platform: “The only health care I will support or approve of is sending the money directly to the people.”
Sen. Rick Scott, R-Fla., introduced a bill that would give ACA enrollees cash through a health savings account called the Trump Health Freedom Account, which they could use to pay premiums and health expenses. Under the bill, the payments would take effect on January 1.
Current ACA subsidies are based on mid-tier Silver plans as the baseline coverage option. Those plans have an average deductible of just over $5,000, according to health policy organization KFF.
Sen. Bill Cassidy, R-La., proposed making the lower-tier Bronze plan the benchmark for enhanced subsidies, while also providing cash to offset the Bronze plan's higher deductible. According to KFF, Bronze plan deductibles average more than $7,000.
Cassidy told CNBC's “Squawk Box” on Monday that his proposal would provide subsidies for the lower-tier plan, capping out-of-pocket premium costs at levels similar to a Biden-era proposal.
“But we are using a cheaper policy, so it is easier to do,” he explained. “That gives us savings to put into a Health Savings Account.”
Switching from a benchmark Silver plan to a Bronze plan without enhanced tax credits would not save enrollees much money.
A 60-year-old couple in Florida earning $86,000, for example, would qualify for a $0 premium on a Bronze 2026 plan with an enhanced tax credit, according to a KFF premium calculator. Without the credit, the same plan would cost $2,169 per month, or more than $26,000 per year.
running the clock
With Congress on Thanksgiving recess, less than a month remains on the legislative calendar.
According to Sabrina Corlette, co-director of Georgetown University's Center for Health Insurance Reform, an HSA funding measure may not only be approved but implemented for the start of coverage next year.
“Conceptually, what they're talking about is a radical restructuring of how the ACA and tax credit markets work, and we're literally days away from people having to pay their January premiums in order to get coverage,” Corlette said.
Oscar Health CEO Mark Bertolini said a national plan in which the government or employers give consumers cash to buy their own coverage on the marketplace is something he supports in the long term, but extending the enhanced tax credits makes more sense now.
“I think this is how they're going to solve this problem, so they get past the midterm elections and have time to come up with a full plan,” Bertolini said.
Those registered face the deadline of December 15
Regardless of whether tax credits are expanded, the deadline to sign up for 2026 coverage remains firm for now. For those who sign up for the Healthcare.gov exchange, it's just three weeks away. On some state exchanges, such as those in California and Massachusetts, the deadline is January 31.
Obamacare premiums for 2026 have soared as insurers expect some enrollees to leave the market, in part because of uncertainty over the extension of enhanced premium tax credits.
Oscar Health has been working with insurance brokers to reach out to their members about more affordable plans.
“We believed that, among the people affected by higher subsidies, we could sell to 85% of them. And right now, what we are seeing says perhaps more,” Bertolini said.
KFF Executive Vice President of Health Policy Larry Levitt said enrollees should consider enrolling before the Dec. 15 deadline, even if Congress fails to pass a premium relief measure before the end of the year, because the Trump administration has tightened the rules for enrolling outside of open enrollment.
“Premiums are still monthly, so you commit to paying one month's premium. If it's not affordable, you can always drop out, but you can't come back if you don't sign up,” Levitt said.
