Republicans are pushing Obamacare tax credit alternatives as deadline approaches

With ObamaCare’s enhanced tax credits expiring at the end of the year, Republicans are proposing new alternatives aimed at lowering health care costs.

Their opportunity to do so is diminishing rapidly – ​​leaving middle-class Americans uncertain about the balance.

The White House is expected to make an announcement this week addressing efforts to either renew or replace the Affordable Care Act’s enhanced tax credits, according to Treasury Secretary Scott Besent.

“We think health care is going to go down,” Picent said during an interview on “Meet the Press” on Sunday. “We’ll see an announcement next week about that.”

The news can’t come fast enough for Shanna Verstegen and her husband. The couple buys insurance through the ACA exchange and faces a 50% premium increase for their family plan in 2026 if the enhanced tax credits are not renewed by Congress.

“We’ve been looking at our expenses, and it’s hard now because everything is already so expensive,” said Verstegen, a fitness trainer from Madison, Wisconsin, with little room to cut costs. “We look at some of the activities our kids are doing and things like that.”

Verstegen traveled to Washington during the government shutdown to call for expanding financial support for middle-class ACA enrollees like her family. Since reopening, the government has been warily monitoring debates on Capitol Hill over so-called Obamacare tax credits.

“I’m thrilled that lawmakers are finally sitting at the table and talking about ways to make health care more accessible to everyone,” she said. “What I’m frustrated about is that there’s less than a month to do something.”

Senate Majority Leader John Thune, RD promised Democrats the House would vote on extending enhanced tax breaks in mid-December as part of a deal to end the record-long government shutdown.

December 15 is the deadline for the majority of Americans to sign up for 2026 ACA coverage, and as Congress headed home for the Thanksgiving recess, there was no consensus on funding the Obamacare credit or what those subsidies would look like.

Some House Republicans signed a bipartisan letter urging Senate leadership to hold negotiations including members of both chambers to find a way to extend the enhanced tax breaks for a year.

The subsidies, passed during the Covid pandemic, provide assistance to middle-class enrollees by capping their share of premium payments at 8.5% of income.

The cost of extending the tax breaks is more than $30 billion annually, according to the nonpartisan Government Accountability Office.

President Donald Trump has opposed extending Obamacare tax credits that he says fund a “money-sucking” insurance industry, explaining in a post on his Truth Social platform, “The only health care I will support or approve of is sending money directly to people.”

Sen. Rick Scott, R-Fla., has introduced a bill that would give ACA enrollees cash through a health savings account called the Trump Health Freedom Account, which they can use to pay for insurance premiums and health expenses. According to the draft law, the payments will be effective from January 1.

Current ACA subsidies rely on mid-tier silver plans as the standard coverage option. The average deductible for these plans is just over $5,000, according to the health policy organization KFF.

Sen. Bill Cassidy, R-Los Angeles, has proposed making the lowest-tier bronze plan the standard for boosting benefits, with cash available to offset the higher deductible bronze plan. According to KFF, Bronze plan deductibles average more than $7,000.

Cassidy told CNBC’s “Squawk Box” on Monday that his proposal would provide lower-tier plan subsidies, capping out-of-pocket premium costs at levels similar to those set forth in the Biden-era proposal.

“But we use a cheaper policy so it’s easier to do,” he explained. “This gives us savings to put into a health savings account.”

Trading from a standard Silver plan to a Bronze plan without the enhanced tax credits will not save enrollees much money.

For example, a 60-year-old couple in Florida earning $86,000 would be eligible for a $0 premium on a Bronze plan in 2026 with an enhanced tax credit, according to a premium calculator from KFF. Without the credit, the same plan would cost $2,169 per month, or more than $26,000 per year.

With Congress on Thanksgiving recess, there is less than a month left on the legislative calendar.

Getting an HSA funding measure not only passed but implemented to begin coverage next year may not be possible, according to Sabrina Corlett, co-director of the Center for Health Insurance Reforms at Georgetown University.

“In theory, what they’re talking about is a radical restructuring of how the ACA marketplaces and tax credits work, and we’re literally days away from when people have to pay their January premiums in order for their coverage to take effect,” Corlett said.

Oscar’s health CEO Mark Bertolini said a national plan in which the government or employers give consumers cash to buy their own coverage in the marketplace is something he supports in the long term, but extending the enhanced tax credits makes more sense now.

“I think this is how they’re going to solve this problem, until they get past the midterms and have time to come up with a full plan,” Bertolini said.

Regardless of whether the tax credits are extended, the deadline to enroll in 2026 coverage remains fixed for now. For those registered on the healthcare.gov platform, this takes just three weeks. On some state-run exchanges such as those of California and Massachusetts, the deadline is January 31.

Obamacare premiums rose for 2026 as insurers expect some enrollees to exit the market, in part due to uncertainty over the extension of enhanced tax credits.

Oscar Health works with insurance brokers to connect with its members about affordable plans.

“We thought, among the people affected by the enhanced support, we could sell to 85% of them,” Bertolini said. “And now, what we’re seeing says maybe even more than that.”

Larry Levitt, executive vice president for health policy at KFF, said enrollees should consider enrolling by the Dec. 15 deadline even if Congress can’t pass a landmark relief measure before the end of the year, because the Trump administration has tightened enrollment rules outside of open enrollment.

“The installments are still monthly, so you’re committing to one month’s installment. If it’s not affordable, you can always drop out, but you can’t come back if you don’t enroll,” Leavitt said.