House GOP Proposes Employer Insurance Expansion, PBM Controls as ACA Subsidies Expire

The U.S. Senate recently failed to advance any healthcare legislation, leaving the House of Representatives as the next arena for potential action. House Speaker Mike Johnson introduced a Republican healthcare package focusing on expanding access to employer-sponsored insurance and implementing controls on pharmacy benefit managers (PBMs) to address drug cost concerns. The proposal includes plans to extend association health plans, allowing small businesses and self-employed individuals to collectively obtain insurance, potentially negotiating lower rates but with less comprehensive coverage compared to Affordable Care Act (ACA) plans. Notably, the GOP package does not include an extension of the enhanced ACA tax subsidies, which are set to expire on December 31, 2024. These subsidies have helped millions afford insurance during the COVID-19 pandemic, and their expiration may lead to significantly higher premiums for many beneficiaries. The Republican plan suggests future cost-sharing reductions effective only in 2027 and does not expand health savings accounts, contrasting with previous Senate GOP proposals. This stance has created tension within the Republican caucus, with some moderate GOP members collaborating with Democrats to extend ACA subsidies temporarily via bipartisan discharge petitions. These petitions aim to bypass leadership opposition to force House floor votes on subsidy extensions ranging from one to two years, including additional provisions to combat marketplace fraud and regulate PBMs. Democratic leadership remains opposed to the GOP package, promoting instead a three-year clean extension of ACA subsidies without program changes. However, such a measure lacks Republican support and faces challenges in the Senate. With the legislative session closing, there is uncertainty whether Congress will enact any healthcare subsidy measures before the current provisions lapse. The unfolding situation carries significant implications for insurance markets, policy pricing, and coverage affordability across the U.S. The debate highlights ongoing regulatory tensions over ACA subsidies, employer plan accessibility, drug cost management, and the future direction of healthcare policy reforms. Industry stakeholders should monitor developments closely, as these decisions will impact payer-provider dynamics, patient out-of-pocket costs, and compliance requirements for insurers and PBMs.