Senate to Vote on Competing Health Plans as ACA Subsidies Set to Expire

The U.S. Senate is scheduled to vote on two competing health care bills aimed at extending COVID-era subsidies for Affordable Care Act (ACA) enrollees. These subsidies, which helped millions afford insurance premiums, are set to expire on January 1, 2026, potentially causing premiums to increase significantly. Nearly 24 million Americans currently benefit from ACA health insurance, including self-employed individuals and small business owners. Permanent subsidies apply to those with incomes below 400% of the federal poverty level, while enhanced premium tax credits introduced in 2021 provide additional support regardless of income. These expanded subsidies have reduced premiums drastically, with some lower-income enrollees paying no premiums and higher earners paying no more than 8.5% of their income. Without extension, the average premium for subsidized enrollees could rise by 114%, increasing from $888 in 2025 to approximately $1,904 in 2026, according to the Kaiser Family Foundation (KFF). This increase is expected to impact both higher earners who face substantial cost increases and lower earners who will see more moderate rises in premiums. Experts anticipate that some enrollees, particularly young and healthy individuals, may forgo coverage due to higher costs, with a recent KFF poll indicating that 25% of respondents might drop insurance if premiums double. Consumers may also shift to lower-cost plans with higher deductibles and reduced coverage. The Democratic Party proposal, led by Senate Majority Leader Chuck Schumer, seeks a three-year extension of enhanced subsidies to maintain affordability and coverage continuity. This plan is projected by the Congressional Budget Office to add nearly $83 billion to the federal deficit over ten years and does not address ongoing issues with program fraud, as noted by the Government Accountability Office. Conversely, the Republican proposal from Senators Bill Cassidy and Mike Crapo proposes replacing subsidies with health savings accounts (HSAs) funded for two years, targeting enrollees under 700% of the federal poverty level who select lower-cost bronze or catastrophic plans. HSAs would provide $1,000 annually for those aged 18 to 49 and $1,500 for those 50 and older, usable on qualified medical expenses excluding premiums. Critics of the GOP plan warn that withholding premium assistance could limit access to coverage for low-income enrollees and encourage enrollment in plans with inadequate benefits. Political considerations are intensifying as the 2026 midterm elections approach, with health care costs emerging as a critical voter issue. Democrats emphasize the need to extend subsidies, highlighting the potential for increased coverage gaps, while some Republicans advocate for reforming or replacing ACA provisions. The White House has proposed a two-year extension with eligibility reforms, but Republican opposition has stalled progress. Additional GOP proposals, including one endorsed by former President Donald Trump involving direct payments for insurance purchase, remain separate from the Senate votes. Health insurance enrollment under the ACA is currently open for coverage starting January 1, with a shopping window from November 1 to December 15 in most states. The outcome of the Senate votes and subsequent legislative actions will have significant implications for insurance affordability, market stability, and Federal health policy compliance.