The Senate on Thursday blocked votes on two competing proposals aimed at addressing rising health care costs and expiring Affordable Care Act (ACA) subsidies. Senators may bring these bills for further debate and a final vote in the future; however, the ACA subsidies are set to expire at the end of the month.
The Senate goes into recess on Dec. 22.
The first bill, brought by Sens. Mike Crapo, RIdaho, and Bill Cassidy, R-La., proposed routing federal funds directly to Americans through health savings accounts, or HSAs, rather than through subsidies paid to health insurance companies.
ACA enrollees who earned less than 700% of the federal poverty level — roughly $110,000 a year for a single person or $220,000 for a family of four — would have received $1,000 if they’re 18 to 49 years old or $1,500 if they are 50 to 64.
These funds could have been used to cover the cost of eligible medical expenses — which would not have included health care for abortions or gender-affirming care — but not for monthly insurance premiums.
The bill did not reach the 60-vote threshold required to move to a full vote; 51 senators voted for, while 48 voted against.
The second bill, backed by Democrats, proposed to extend ACA subsidies for three years. Only 51 senators voted to advance the bill to a full vote.
The debate over health care subsidies
President Donald Trump previously voiced support for the Republican bill.
“I like the concept,” he told a reporter aboard Air Force One Tuesday. “I love the idea of money going directly to the people, not to the insurance companies.”
Democrats have shared concerns about the HSA solution, arguing it would be a “giveaway to banks and big insurance” and could further increase health care costs for older Americans and those with higher health needs. Moreover, the bill did not extend the ACA subsidies nor did it reduce health costs, Democrats argued.
“The Crapo-Cassidy bill would not extend the ACA tax credits for a single day. That’s what’s driving the price up, and they’re doing nothing about it,” Senate Minority Leader Chuck Schumer, D-NY, said during a press conference Tuesday.
“Their bill will absolutely not lower costs,” he said.
ACA subsidies were introduced in 2010 at the act’s original passage, and were expanded twice during the pandemic. Throughout October and early November, Republicans and Democrats remained deadlocked over again extending these enhanced subsidies, leading to the longest federal government shutdown in history. In a deal to reopen the government, Republicans agreed to bring the issue up for a vote in December.
Republicans have long scrutinized Obamacare and the ACA subsidy approach, in which the federal government pays monthly subsidies directly to health insurance companies to lower the cost for enrollees. From 2021 to present, with expanded subsidies, ACA enrollees paid no more than 8.5% of their household’s income for a basic health insurance plan.
Republicans have argued that rather than lower health costs or insurance premiums, the ACA tax credits promulgate “waste, fraud, and abuse” and direct billions of dollars to insurance companies.
“There is nothing in [Democrats’] bill that stops billions of dollars in fraudulent spending,” Cassidy said on the Senate floor Wednesday.
“Eighty-three billion dollars. That is how much Democrats want to send and will vote today to send to bail out a failed Obamacare health care system,” Sen. John Barrasso, R-Wyoming, the Senate majority whip and a former physician, said before Thursday’s vote.
“Obamacare has failed so badly that the Democrats continue to use taxpayer dollars to try to hide the failures,” he said. “That’s what this whole Biden-COVID scam is all about. These are juicy subsidies, extra subsidies on top of the regular Obamacare subsidies, and those are the ones that are expiring at the end of this month.”
However, without this federal assistance, health insurance premiums for the more than 20 million ACA recipients will increase by about 20% to 30%. For a household earning $85,000, the annual cost for health insurance premiums alone will increase by $22,000 in 2026.
This is on top of already increasing health care costs.
Between 2019 and 2020, health spending increased by 10.4%; it climbed by another 7.5% from 2022 to 2023 when total spending reached almost $5 trillion. Today, 20% of the country’s gross domestic product is spent on healthcare. That means that $1 out of every $5 spent in the U.S. goes toward health care.
Senate fails to pass alternative proposals
Since the government shutdown ended, several Republican senators drafted their own proposals to address rising health care costs. In addition to the Crapo-Cassidy bill, another pair of senators — Susan Collins, R-Maine, and Bernie Morena, R-Ohio — released the CARE Act. It proposed to extend the ACA subsidies for two years while introducing an income eligibility cap of $200,000 per household. The bill also eliminated zero-cost insurance plans, instead requiring all ACA enrollees to pay $25 per month for health insurance coverage.
It is unclear whether the Senate will vote on this bill.
Meanwhile, in the House, Reps. Jen Kiggans, R-Va., and Josh Gottheimer, D-N.J., on Wednesday introduced a bipartisan measure called the “CommonGround Bill,” which would extend the ACA subsidies for one year and introduce new income caps and measures to address fraud. The proposal mandates a vote on other policies to reduce health insurance premium costs by July 2026 and calls for expedited consideration of all future reform bills. Thirty-eight House members have backed the proposal.
“There is a runaway train barreling towards our country in the form of a massive increase in health care costs for millions of Americans that are tied to the tracks,” Sen. Ron Wyden, D-Ore., said Thursday morning before the Senate voted.
“Come Jan. 1, millions of Americans are going to have to figure out how they are going to pay for health care,” Wyden continued. “Families will be making a near torturous decision between paying their premiums and paying for rent and groceries. Millions will decide to forego coverage completely.”
