An Obamacare sign is displayed outside an insurance agency on Nov. 12, 2025 in Miami, Florida.
Joe Raedle | Getty Images
With enhanced Obamacare tax credits set to expire at the end of the year, Republicans are proposing new alternatives aimed at lowering the cost of health care.
Their window for doing so is rapidly closing — and leaving middle-class Americans uncertain in the balance.
The White House is expected to make an announcement this week addressing efforts to either renew or replace the Affordable Care Act enhanced premium tax credits, according to Treasury Secretary Scott Bessent. However, MS Now late reported an announcement has been delayed in part due to congressional backlash, according to two White House officials.
The news could not come soon enough for Shana Verstegen and her husband. The couple buys insurance through the ACA exchange and is facing a 50% premium increase for their family plan in 2026 if the enhanced tax credits are not renewed by Congress.
“We have been looking at our expenses, and it’s tough now because everything’s really expensive already,” with little room to cut costs,” said Verstegen, a fitness instructor from Madison, Wisconsin. “We’re looking at a few activities our kids do and things like that.”
Verstegen traveled to Washington during the government shutdown to advocate for extending financial support for middle-class ACA enrollees like her family. Since the government reopened, she’s been watching the discussions on Capitol Hill around so-called Obamacare tax credits warily.
“I’m thrilled that lawmakers are finally at the table and talking about ways to make health care more affordable. What I’m frustrated about is there is less than a month to do something,” she said.
Senate Majority Leader John Thune, R-S.D., promised Democrats the chamber 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 the majority of Americans to sign up for 2026 ACA coverage, and as Congress headed home for the Thanksgiving recess, there was no consensus on Obamacare credit funding or what those subsidies would look like.
GOP proposes cash payments
Some Republicans in the House signed a bipartisan letter urging Senate leadership to have negotiations that include members from both chambers to find a way to extend the enhanced tax credits for a year.
The subsidies, enacted during the Covid pandemic, provide aid for middle-class enrollees by capping their portion of premium payments at 8.5% of income.
The cost of extending the tax credits is more than $30 billion per year, according to the nonpartisan Government Accountability Office.
President Donald Trump has opposed an extension of the Obamacare tax credits that he says fund the “money sucking” insurance industry, stating in a post on his Truth Social platform, “The only healthcare I will support or approve is sending the money directly back to the people.”
Sen. Rick Scott, R-Fla., has introduced a bill that would give ACA enrollees cash through a Health Savings Account called a Trump Health Freedom Account, which they could use to pay for both premiums and health expenses. According to the bill, the payments would be effective starting Jan. 1.
The current ACA subsidies are based on mid-tier Silver plans as the benchmark coverage option. Those plans have an average deductible of just over $5,000, according to health policy organization KFF.
Sen. Bill Cassidy, R-La., has proposed making the lower-tier Bronze plan the benchmark for enhanced subsidies, while providing cash to offset the higher Bronze plan deductible. According to KFF, Bronze plan deductibles average more than $7,000.
Cassidy told CNBC’s “Squawk Box” on Monday his proposal would provide subsidies for the lower-tier plan, limiting out-of-pocket premium costs at levels similar to those under a Biden-era proposal.
“But we’re using a cheaper policy so it’s easier to do,” he explained. “That gives us savings to put into a Health Savings Account.”
Trading down from a benchmark Silver plan to a Bronze plan without the 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 2026 Bronze plan with an enhanced tax credit, according to a premium calculator from KFF. Without the credit, the same plan would cost $2,169 per month, or more than $26,000 per year.
Racing the clock
With Congress out for the Thanksgiving recess, there is less than a month left of the legislative calendar.
Getting an HSA funding measure not only passed but implemented for the start of coverage next year may not be possible, according to Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University.
“Conceptually, what they’re talking about is a radical restructuring of how the ACA marketplaces and tax credits work, and we literally are days away from when people have to pay their January premiums in order to effectuate their 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 in the marketplace is something he supports in the long run, but extending the enhanced tax credits makes the most sense now.
“I think that’s how they’re going to solve this problem, so they get past the midterms, and they have time to put together a fulsome plan,” Bertolini said.
Enrollees face Dec. 15 deadline
Regardless of whether the tax credits are extended, the deadline to sign up for 2026 coverage remains firm for now. For those enrolling on the healthcare.gov exchange, it is just three weeks away. On some state-run exchanges such as those for California and Massachusetts, the deadline is Jan. 31.
Obamacare premiums for 2026 have spiked as insurers expect some enrollees to drop of out of the market, in part because of the uncertainty over the extension of the enhanced premium tax credits.
Oscar Health has been working with insurance brokers to reach out to its members about more affordable plans.
“We believed, out of the people affected by enhanced subsidies, that we could sell to 85% of them. And right now, what we’re seeing says maybe more,” said Bertolini.
KFF’s executive vice president for health policy, Larry Levitt, said enrollees should consider signing up by the Dec. 15 deadline even if Congress does not manage to pass a premium relief measure before the end of the year, because the Trump administration has tightened rules for signing up outside of open enrollment.
“The premiums are still month-to-month, so you’re committing to one month’s premium. If it’s unaffordable, you can always drop out, but you can’t come back in if you don’t sign up,” Levitt said.
