CRFB Flags Unfunded Senate Plan to Extend ACA Subsidies, Warning of $300B Deficit Increase

The Committee for a Responsible Federal Budget (CRFB), a nonpartisan fiscal watchdog, has criticized a recent Senate Democratic proposal to extend enhanced Affordable Care Act (ACA) subsidies for three years without offsetting funding. These enhanced subsidies, initially enacted during the pandemic to help reduce premiums for middle- and lower-income Americans, are set to expire, prompting legislative efforts to prevent significant premium increases. The CRFB warns that extending these subsidies as proposed would add approximately $300 billion to the federal deficit over a decade, primarily due to increased government spending on premiums and sustained high enrollment levels. Additionally, the proposal would permanently repeal key program integrity measures implemented in a 2025 reconciliation law aimed at tightening oversight of ACA subsidies. These include eliminating restrictions on subsidies during special enrollment periods and loosening verification and tax reconciliation requirements. The Senate bill also reverses parts of a 2025 federal regulation adjusting subsidy calculations, potentially increasing subsidy generosity but also raising costs and undermining safeguards against misuse. The CRFB expressed concern that the measure lacks offsetting spending cuts or new revenue sources, thereby exacerbating the national debt, which currently matches the size of the economy with annual interest costs around $1 trillion. The watchdog emphasized that the bill is "far worse than even a debt-financed extension" due to these rollbacks in fiscal oversight, highlighting the need for any subsidy extension to be paired with broader health spending reforms to improve long-term budget sustainability. The debate over ACA subsidies recently contributed to a government funding impasse, reflecting the political sensitivity and fiscal complexity of balancing short-term affordability against long-term fiscal responsibility. Political dynamics surrounding ACA affordability have intensified ahead of the 2026 midterm elections, with lawmakers facing difficult policy decisions about whether to allow premiums to increase sharply or to approve a costly subsidy extension. This debate underscores the ongoing tension between managing federal deficits and ensuring health insurance affordability for millions of Americans.