ACA subsidy deal further out of reach as bipartisan talks sputter
Bipartisan efforts to extend expiring Affordable Care Act (Obamacare) subsidies have stalled,with key disagreements delaying a deal before increased out-of-pocket costs take effect next month. A central sticking point is the Republican demand to include stricter abortion funding restrictions based on Hyde Amendment language, which limits federal funding for abortions to specific cases. Democrats oppose these additional restrictions, arguing current safeguards already prevent federal funds from covering abortions, while Republicans view current provisions as loopholes.
With a Senate vote on a healthcare bill looming next week as part of a recent government shutdown deal, it is uncertain whether an extension will pass in time. Democrats must decide whether to push for a short-term extension, a longer phaseout with income caps, or a multi-year extension, which could deepen partisan divides ahead of the 2026 midterms.
Senate leaders have expressed cautious optimism but acknowledge unresolved challenges. Meanwhile, former President Trump, who has largely stayed out of the debate, may soon engage and potentially support a temporary fix to avoid political fallout. The next significant deadline is January 30, when short-term government funding expires again, potentially providing new leverage to address the subsidy issue.
Obamacare subsidy deal further out of reach as bipartisan talks sputter
Once optimistic and bipartisan discussions to extend expiring Affordable Care Act subsidies have all but fizzled out, with senators on both sides of the aisle skeptical a deal can come together before higher out-of-pocket premiums kick in next month.
The inability to reach a compromise stems largely from a long-running impasse over GOP demands to expand abortion restrictions under Obamacare using so-called Hyde Amendment language, which bars federal funds for abortion except in cases of rape, incest, and life of the mother.
The bleak outlook for a compromise comes ahead of a Senate vote next week on a healthcare bill of Democrats’ choosing as part of the deal made to end the government shutdown. But without a bipartisan measure that can garner the 60 votes needed to pass, it is all but certain that millions of Americans with marketplace plans will no longer receive pandemic-era enhanced subsidies starting Jan. 1 and could lose their coverage.
“There’s some difficult issues that look like we’re not going to be able to resolve, although I’m going to still try,” Sen. Angus King (I-ME), a Democratic Caucus member who had been leading bipartisan talks, told the Washington Examiner.
Democrats will now be tasked with deciding what legislation they want to vote on by the end of next week, as part of a deal struck with Senate Majority Leader John Thune (R-SD) last month to end the nation’s longest-ever government shutdown.
A one-year extension or a longer-term proposal that includes a subsidy phaseout with stricter income caps could lay the groundwork for more negotiations in the new year. However, a multi-year extension that leaves the subsidies largely unchanged would draw a party-line breakdown that Democrats could use as a messaging tactic against GOP candidates heading into the midterm elections. It remained unclear as of Tuesday which avenue Democrats may take.
“Stay tuned,” Senate Minority Leader Chuck Schumer (D-NY) told reporters. “We will be focused like a laser on lowering people’s costs.” He also accused Republicans of being “in total disarray” with “no plan. We have a plan,” Schumer added, declining to offer details.
Majority Leader John Thune (R-SD) did not stake out a position on a possible alternative following a closed-door lunch with Senate Republicans, during which Finance Committee Chairman Mike Crapo (R-ID) and Health Committee Chairman Bill Cassidy (R-LA) walked GOP senators through their own healthcare policy proposals to address rising insurance costs.
“Democrats are going to get an opportunity to vote on a proposal of their choosing, and we will see where the Republicans come down,” Thune said. “We’ve got some members, as you know, who want to work with them in a constructive way on something that could be a bipartisan solution. But that hasn’t landed yet.”
President Donald Trump, who has largely steered clear of the healthcare debate that has raged in Congress, may soon be ready to come off the sidelines. Despite fierce GOP criticisms of Obamacare, four longtime Trumpworld figures told the Washington Examiner they expect the president to agree to a short-term fix rather than risk the political blowback ahead of the midterm elections. In the days before Thanksgiving, a widely expected plan from Trump to unveil a framework for extending subsidies was scrapped due to revolt from Republicans.
“It feels like a bit of a poison pill, but I think a temporary extension, which then allows time for the president to fully vet an alternative, is the least painful way forward here,” a former top Trump White House aide said.
Back on Capitol Hill, senators in both parties stood firm on what they called red lines over abortion access under Obamacare. Democrats say the Obama-era law already has existing guardrails to prevent federal money from funding abortions, similar to the Hyde Amendment. Abortion coverage can be included with an additional surcharge or through state funding, provisions that Republicans say are tantamount to Hyde Amendment loopholes.
The result is Democrats accusing Republicans of pursuing a back-door abortion ban, and Republicans accusing Democrats of using a back door to funnel federal funds to abortions. Both say that what the other side is asking for is a nonstarter.
“It’s a nonstarter for Republicans to allow for the use of taxpayer funding for abortions,” said Sen. Mike Rounds (R-SD), who supports a temporary, scaled-back extension of subsidies. “Some of the Democrats actually thought that that was already the case.… If that’s the case, why not clarify?”
Sen. Thom Tillis (R-NC), a centrist who is not seeking reelection and has also pushed for a similar form of extension, said it would be a “political advantage to Republicans” if Democrats rejected additional abortion restrictions.
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Sen. Gary Peters (D-MI), a centrist not seeking reelection who helped cut the shutdown deal with Republicans, said the Hyde provisions were among the issues presenting a “real challenge” to finding agreement.
Another possible deadline to address subsidies and health insurance costs is Jan. 30, when short-term government funding is again set to run out. Although higher out-of-pocket premiums will already be in effect, the funding cliff will offer Senate Democrats their latest leverage point.
Christian Datoc contributed to this report.
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