WATCH LIVE: Senate rejects bills on ACA subsidies, ensuring premiums will rise in 2026

WASHINGTON (AP) — The Senate on Thursday rejected legislation to extend the Affordable Care Act’s tax credits, essentially ensuring that millions of Americans will see a sharp rise in costs at the start of the year.

Watch the Senate floor live in the video player above.

Senators rejected a Democratic bill to extend benefits for three years and a Republican alternative that would have created new health savings accounts — an unofficial end to a months-long effort by Democrats to prevent COVID-19-era benefits from expiring on Jan. 1.

Read more: Republicans are divided on health care. Here’s what we know

Before the vote, Senate Democratic Leader Chuck Schumer of New York warned Republicans that if they didn’t vote to extend the tax breaks, “there won’t be another chance to act,” before premiums rose for many people who buy insurance on the ACA’s marketplaces.

“Let’s avoid a disaster,” Schumer said. “The American people are watching.”

Republicans have argued that the Affordable Care Act plans are too expensive and need comprehensive reform. The health savings accounts in the GOP bill would provide funds directly to consumers rather than insurance companies, an idea echoed by President Donald Trump. But Democrats immediately rejected the plan, saying the accounts would not be enough to cover the costs for most consumers.

Some Republicans have pushed their colleagues to extend appropriations, including Sen. Thom Tillis of North Carolina, who said they should vote for a short-term extension so they can reach an agreement on the issue next year. “It is very complex and very difficult to accomplish in the limited time we have left,” Tillis said Wednesday.

He watches: The Senate meets before voting on health care proposals, each of which is likely to fail

But despite a bipartisan desire to continue the appropriations, Republicans and Democrats have never engaged in meaningful or high-level negotiations on a solution, even after a small group of centrist Democrats reached a deal with Republicans last month to end the 43-day government shutdown in exchange for a vote to extend Affordable Care Act subsidies. Most Democratic lawmakers opposed the move as many Republicans made clear they wanted the tax breaks to expire.

The agreement raised hopes of reaching a bipartisan settlement on health care. But that quickly fizzled out with no real talks between the two parties.

The competing votes in the Senate are the latest political messaging exercise in a Congress that has operated almost entirely on partisan terms, as Republicans pushed through a massive tax and spending cut bill this summer using budget maneuvers that eliminated the need for Democratic votes. They also amended Senate rules to bypass the Democratic blockade of all Trump nominees.

Intractable issue

The votes were also the latest failure in the debate over the Affordable Care Act, President Barack Obama’s signature law that Democrats passed along party lines in 2010 to expand access to insurance coverage.

Republicans have tried unsuccessfully since then to repeal or reform the law, arguing that health care is still too expensive. But they struggled to find an alternative. Democrats, meanwhile, have made the policy a central political issue in several elections, betting that millions of people who buy health care on government marketplaces will want to keep their coverage.

Read more: Republicans in the swing district are bracing for political fallout if health care subsidies end

“When people’s monthly payments go up next year, they’ll know that Republicans did it,” Schumer said in November, while making clear that Democrats would not seek compromise.

Even if they consider it a political win, the failed votes represent a loss for Democrats who demanded an extension of benefits as they were forced to shut down the government for six weeks in October and November — and for millions of people facing premium increases on Jan. 1.

Maine Sen. Angus King, an independent who caucuses with Democrats, said the group tried to negotiate with Republicans after the shutdown ended. But he said the talks became fruitless when Republicans demanded language adding new limits on abortion coverage that was a “red line” for Democrats. Republicans “will own these increases,” he said.

So many plans, but so little agreement

Republicans have used the approaching expiration of subsidies to renew their long-standing criticism of the Affordable Care Act, also known as Obamacare, and to try to agree again on what to do.

Thune announced earlier this week that the GOP conference decided to vote on the bill led by Louisiana Sen. Bill Cassidy, chairman of the Senate Health, Labor, Education and Pensions Committee, and Idaho Sen. Mike Crapo, chairman of the Senate Finance Committee, even as several Republican senators proposed alternative ideas.

In the House of Representatives, Speaker Mike Johnson, Republican of Los Angeles, promised a vote next week. Republicans considered various options at a meeting on Wednesday, without a clear consensus.

House Republican moderates, who may have competitive bids for re-election next year, are pushing Johnson to find a way to extend the benefits. But more conservative members want to see the law reformed.

Rep. Kevin Kelly, R-Calif., has pushed for a temporary extension, which he said could serve as an opportunity to take more steps on health care.

If they fail to act and health care costs rise, Kelly said, Congress’ approval rating “will decline even further.”

Associated Press writers Kevin Freking and Joey Cappelletti contributed to this report.