Senate Blocks ACA Subsidy Bills; Premiums Expected to Rise 114% in 2026

Two Senate bills aimed at addressing the expiration of Affordable Care Act (ACA) subsidies both failed to pass, leading to anticipated significant premium increases for over 22 million Americans in 2026. One bill, proposed by Republicans, would have replaced enhanced ACA subsidies with health savings accounts for two years, targeting enrollee populations earning under 700% of the federal poverty level who select lower-cost plans with higher deductibles. These accounts would provide fixed annual payments to mitigate out-of-pocket healthcare costs but would not cover premium payments. Democrats proposed extending the enhanced ACA tax credits for an additional three years without modifications, emphasizing the need to maintain affordable coverage for a wide population. However, both legislative proposals lacked bipartisan support, with votes split 51-48 against passing either measure. The failure to extend subsidies is projected to raise average health insurance premiums by about 114%, according to data from the Kaiser Family Foundation (KFF). KFF also finds that roughly 25% of current ACA Marketplace enrollees might choose to go uninsured if the tax credits lapse, heightening concerns about coverage loss among lower-income individuals. The GOP's health savings account proposal faced criticism for potentially increasing costs for people who frequently use their insurance, as the savings account amounts would be insufficient to offset substantial deductibles, especially as the average bronze plan deductible is nearly $7,500. The subsidy expansion originally came under the American Rescue Plan Act of 2021, providing enhanced assistance amid the COVID-19 pandemic and was extended through the Inflation Reduction Act of 2022. These expanded tax credits are scheduled to expire at the end of 2025. The expiration was a central issue contributing to the recent prolonged government shutdown, which ended without resolving the subsidy extensions. House Republican leadership is preparing for a vote on ACA subsidies, with internal divisions emerging between moderates advocating for extension to protect competitive districts and conservatives seeking broader reforms. The unfolding legislative impasse has critical implications for healthcare affordability, insurance market stability, and regulatory compliance within the ACA framework as the 2026 plan year approaches.