Congress Faces Healthcare Deadlock as Obamacare Premium Subsidies Expire

The final week of the House and Senate session before the Christmas recess is marked by critical legislative activity, particularly related to health care policy and the National Defense Authorization Act (NDAA).

The Senate is set to pass the NDAA, a significant annual defense policy bill, which has already passed the House. Concurrently, the Senate will consider nearly 100 nominees. However, the primary legislative focus resides in the House, where Speaker Mike Johnson and GOP leaders are advancing the Lower Health Care Premiums for All Americans Act as a response to the imminent December 31 expiration of enhanced Obamacare premium tax credits.

This expiration, often referred to as the "Obamacare cliff," presents significant implications for millions of Americans who risk losing coverage or facing increased premiums. Despite the urgency, bipartisan consensus remains elusive as both Republicans and Democrats prefer no action over a potentially contentious compromise. The internal divisions among House Republicans, especially between moderates and hardliners, threaten the passage of Johnson's health care bill, underscoring GOP challenges in presenting a unified front on health care policy.

The GOP's proposed bill mainly entails modest reforms targeting pharmacy benefit manager transparency, reinstatement of cost-sharing reductions previously removed during legislative debates, and provisions codifying association health plans and clarifying stop-loss insurance. Notably, the bill omits expansion of health savings accounts, a long-standing GOP agenda item. Republican leadership believes that bundling these popular policies might garner bipartisan support, but skepticism remains regarding Democratic backing.

Moderate Republicans have sought to introduce an amendment extending the enhanced Obamacare subsidies for two years with income caps and anti-fraud measures. However, disagreements over amendment text between leadership and moderates have led to a breakdown in negotiations, leaving moderates to act independently. This fragmentation raises doubts about Speaker Johnson's ability to pass the health care package without moderate support and opens possibilities for Democratic advantage through a discharge petition seeking subsidy extensions.

Senate Republicans have shown some bipartisan inclination by advancing a three-year subsidy extension proposal, similar to a Congressional Black Caucus proposal, yet progress in the Senate remains stalled. Meanwhile, Democrats advocate for a clean, multi-year extension of subsidies and express reservations about shorter or conditional extensions advanced by GOP moderates.

In addition to health care challenges, Senate GOP leaders face conservative opposition impeding the approval of a minibus funding package, an issue compounded by the approaching January 30 government shutdown deadline. Legislative gridlock in this session highlights significant hurdles in enacting policy critical to health care affordability during a fragile economic period.