Politics

Senators pursue bipartisan ACA fix as expired subsidies drive up costs

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Jan 10, 2026

THE BARE STORY

A bipartisan group of senators is negotiating a compromise to restore enhanced Affordable Care Act (ACA) premium subsidies that expired on December 31, 2025. While the House of Representatives recently approved a three-year extension of the tax credits, the Senate working group, led by Senators Susan Collins and Bernie Moreno, has drafted an alternative two-year framework. However, a dispute over restrictions on taxpayer-funded abortions remains a primary obstacle to finalizing the deal.

Senator Moreno outlined the Senate proposal, which aims to extend subsidies in the first year while pushing the open enrollment deadline to March 1. The plan would institute an income cap at 700% of the federal poverty level and mandate minimum premiums to prevent fraud. For the second year, the framework proposes allowing individuals to choose between subsidies or a health savings account (HSA). Moreno stated that reinstating cost-sharing reduction payments under this plan is projected by the Congressional Budget Office to reduce premiums by 11% for exchange participants.

Negotiations have been complicated by disagreements regarding the Hyde Amendment. According to Moreno, Senate Republicans argue the ACA does not currently comply with laws prohibiting federal funding for abortions, while Democrats maintain that no changes are required. The dispute intensified after President Donald Trump urged House Republicans to be flexible on the amendment, a move that reportedly drew backlash from GOP senators.

The lapse in subsidies affects approximately 22 million Americans, with the enrollment deadline for marketplace plans in most states set for January 15. Research estimates indicate premiums for those losing subsidies could rise by an average of 114%. Without an extension, the Congressional Budget Office has projected a significant annual increase in the number of uninsured people. Facing rising costs, some individuals have reported switching to high-deductible plans or forgoing coverage entirely.

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Perspective by Claude

• Implementation of fiscal guardrails The Senate proposal includes specific measures designed to manage costs and prevent misuse of the system. The plan introduces an income cap set at 700% of the federal poverty level and mandates minimum premiums to specifically address and prevent fraud.

• Introduction of healthcare choice Negotiators aim to offer greater flexibility in the second year of the framework by allowing individuals to choose between subsidies or a health savings account (HSA). Senator Moreno noted that the Congressional Budget Office projects that reinstating cost-sharing reduction payments under this plan would reduce premiums by 11% for exchange participants.

• Enforcement of abortion funding bans Senate Republicans argue that the Affordable Care Act in its current form does not comply with laws prohibiting federal funding for abortions. Consequently, proponents of the Senate framework insist that stricter application of the Hyde Amendment is a necessary component of any deal to restore subsidies.

How it may affect me

As a U.S. reader:

• Without a legislative fix, approximately 22 million Americans face an average premium increase of 114%, leading some to switch to high-deductible plans or forgo coverage entirely.

• If the Senate framework is enacted, open enrollment would extend to March 1, though new income caps and mandatory minimum premiums would restrict subsidy eligibility for some.

• The proposed two-year deal would eventually allow enrollees to choose between subsidies or health savings accounts, with projected premium reductions of 11% for exchange participants.

• Finalizing aid is currently stalled by legislative disputes over abortion funding restrictions, leaving enrollees uncertain as the January 15 deadline in most states approaches.

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